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2012 DIGILAW 333 (CAL)

Punjab & Sind Bank v. Technoshop Private Limited

2012-04-19

J.N.PATEL, SAMBUDDHA CHAKRABARTI

body2012
Judgment : The Court, The moot question that falls for determination in this appeal is. even if whether the alleged overvaluation of a suit can be taken as a defence in an application under Chapter XIIIA of the Original Side Rules of this Court. A very brief resume of the facts necessary for appreciating the scope of the question is as follows: In the year 1987 by a registered lease of a premises located at the Lindsey Street, Kolkata, measuring about 3,265 square feet the defendant/ appellant became monthly tenant under the plaintiff/ respondent at a monthly rental of Rs.24,487.50. The lease deed which is annexed to the application for stay was for a period of for five years renewable at the option of the lessee-appellant upon notice to the lessor - plaintiff for a further period of five years on the same terms and conditions, except that the rent would be increased by 15 per cent. The lease deed also provided for a further extension of lease for another five years on the same terms and conditions. Upon the expiry of the first period of five years the appellant sought for an extension for five more years. The respondent declined to renew the same and issued a notice under Section 13(6) of the West Bengal Premises Tenancy Act, 1956 and Section 106 of the Transfer of Property Act. A suit for eviction was filed in the year 1992. In the year 2008 the suit was withdrawn with liberty to file another suit afresh and the present suit being C.S. No. 258 of 2008 was filed for recovery of vacant possession of the suit premises with mesne profits. Mesne profits were claimed for 110 days at the rate of Rs.10,884/-per day aggregating to Rs.11,97,240/-. The suit was valued at Rs.14,91,090. In the said suit an application under Chapter XIIIA of the Original Side Rules of this Court was taken out by the plaintiff praying for a decree of eviction of the defendant as stated in the Master Summons. The defendant contested the said application by filing an affidavit-in-opposition and the plaintiff filed an affidavit-in-reply thereto. Subsequently, the defendant filed a supplementary affidavit wherein for the first time the point of overvaluation of the suit property was taken as a defence by the defendant. The defendant contested the said application by filing an affidavit-in-opposition and the plaintiff filed an affidavit-in-reply thereto. Subsequently, the defendant filed a supplementary affidavit wherein for the first time the point of overvaluation of the suit property was taken as a defence by the defendant. The learned trial Judge passed a decree for eviction in terms of prayer (a) of the Master Summons. This judgment is the subject matter of the present appeal. Mr. Das, the learned Senior Counsel appearing for the appellant, submitted that this Court did not have the jurisdiction to try and entertain the suit as the same did not come within the pecuniary jurisdiction of this Court. Section 8 of the Suits Valuation Act, 1887 requires a suit to be valued in accordance with the Court Fees Act and section 7(xiii)(d) of the Court Fees Act provides that the court fee is to be adjudicated on the basis of twelve months’ rent which in the instant case comes to Rs.2,93,850/-.But the pecuniary jurisdiction of this Court is above Rs.10 lacs. Mr. Das has submitted that the plaintiff in order to bring the instant suit within the jurisdiction of this Court has included the mesne profits as a part of the valuation for suit. The plaintiff’s claim for the mesne profit have been absurd, fanciful and arbitrary. A further aspect of Mr. Das submission was that the respondent claimed payment at the rate of Rs.24,487.50 per month for a period when there was no contract between the parties and this claim was considered by the plaintiff to be unreasonable and arbitrary. According to the appellant the mesne profits as claimed is not borne out of the agreement as the lease deed provides for an increase of rent by 15 per cent every five years which rules out adopting any other methodology for calculating the valuation of the suit. The Advocate’s notice dated August 9, 2008 on behalf of the plaintiff claimed monthly rent at the rate of Rs.24,487.50 and in that case it cannot claim mesne profits on and from August 24, 2008 at the rate of Rs. 10,884/- per day. The appellant has drawn a comparison between the mesne profits claimed in the earlier suit of 1992 which was Rs. 3,000/- per day and submits that the same cannot be Rs. 10,884/- per day in the year 2008. 10,884/- per day. The appellant has drawn a comparison between the mesne profits claimed in the earlier suit of 1992 which was Rs. 3,000/- per day and submits that the same cannot be Rs. 10,884/- per day in the year 2008. Another limb of the appellant’s submission is that a plaintiff is entitled to a decree under Chapter XIIIA of the Original Side Rules only when the defendant has no defence or that the defence is illusory or sham or the defence is moonshine. But so long as the defendant raises a triable issue the plaintiff is not entitled to a decree. In the present case the issue of jurisdiction went to the root of the matter which required to be adjudicated and this disentitled the plaintiff to a decree by a summary trial under Chapter XIIIA of the Original Side Rules. The appellant in support of its contentions relied upon the case of Nellimarla Jute Mills Company Limited –Vs.- Rampuria Industries and Investments Limited, reported in 2000 (2) CLJ 70 for a proposition that for the purpose of court fees the plaintiff who claims himself to be a former landlord has to value the suit under Clause (xiii) of Section 7 of the Court Fees Act. The Case of Abdul Hamid Shamai –Vs.- Abdul Majid and Others, reported in AIR 1988 SC 1150 was relied upon for a proposition that ordinarily a court shall not examine the correctness of the valuation chosen but the plaintiff cannot act arbitrarily in the matter. Supreme Court in that case held that if a plaintiff chooses a ridiculous figure it tantamounts to not exercising his right in this regard and in such a situation it is not only upon to the Court but it is its duty to reject such overvaluation. The appellant has also relied on the case of M/s. Mechalec Engineers & Manufacturers –Vs.- M/s. Basic Equipment Corporation, reported in AIR 1977 SC 577 . This is a case under O. 37 R. 3 of the Code of Civil Procedure where the Supreme Court laid down the principles to be followed while considering the question of granting leave to defend. Relying on the same Mr. This is a case under O. 37 R. 3 of the Code of Civil Procedure where the Supreme Court laid down the principles to be followed while considering the question of granting leave to defend. Relying on the same Mr. Das submitted that if the defendant has no defence or the defence set up is illusory or sham or practically moonshine it is only then that the plaintiff is entitled to a judgment under Chapter XIIIA of the Original Side Rules. The last judgment cited by the appellant is the case of M/s. Commercial Aviation and Travel Company and Others –Vs.- Vimla Pannalal, reported in AIR 1988 SC 1636 . There the Supreme Court had held that when there is objective standard of valuation to put a valuation on the relief ignoring such objective standard might be a demonstratively, arbitrary and unreasonable valuation and the Court would be entitled to interfere in the matter. The appellant thus submits that in view of the principles so laid down in different cases the judgment of the learned trial Judge is liable to be set aside and the matter is required to be remanded to trial. The respondent on the other hand asserted that the mesne profits claimed by it was not a fanciful one and even if it had been claimed at the rate of Rs.60/- per square feet per month the valuation of the suit would have been in excess of Rs.10 lacs. The respondent has submitted that no suit can ever be dismissed for overvaluation. Even if a suit is overvalued High Court has jurisdiction to dismiss the suit or to pass a decree for less than Rs.10 lacs. With reference to the judgments cited by the appellant, Mr. Mitra, the learned Senior Counsel appearing for the respondent, has submitted that the appellant has not cited even a single judgment where the suit was dismissed or the plaint was returned by a Court of unlimited jurisdiction for overvaluation. The respondent has very heavily relied on the judgment in the case of J. Thomas & Co. Pvt. Ltd. & Another –Vs.- Pawan Kumar Tebriwala, reported in 1998 (2) CHN 502 . Mr. Mitra has further submitted that the judgments cited by the appellant have no application to the facts of the present case. The respondent has very heavily relied on the judgment in the case of J. Thomas & Co. Pvt. Ltd. & Another –Vs.- Pawan Kumar Tebriwala, reported in 1998 (2) CHN 502 . Mr. Mitra has further submitted that the judgments cited by the appellant have no application to the facts of the present case. According to him the case of Nellimarla Jute Mills Company Limited (Supra) was a suit for eviction governed by the West Bengal Premises Tenancy Act and in a case of tenancy governed by the West Bengal Premises Tenancy Act a landlord is not entitled to mesne profits for the period between the termination of tenancy and the passing of the decree for eviction. But the present suit is governed by the Transfer of Property Act. The case of Abdul Hamid Shamai (Supra) is a case where the challenge was to the jurisdiction of the City Civil Court, Calcutta on the ground of overvaluation. The judgment in the case of Mechalec Engineers & Manufacturers (Supra) has again been distinguished on the ground that it was not a decision on the valuation of a suit but it dealt with the law relating to passing of a summary decree. Mr. Mitra has submitted that in the particular facts of that case where the defendant had denied any privity of contract in response to the plaintiff’s allegation that a dishonoured cheque was drawn by the defendant and was given as a price of the goods supplied that the Supreme Court granted leave to defend. The stand of the respondent is that overvaluation of a suit is not a defence available to a defendant in an application filed under Chapter XIIIA of the Original Side Rules. In the case of Kiran Singh and Others –Vs.- Chaman Paswan and Others, reported in AIR 1954 SC 340 the Supreme Court held that when a case had been tried by a Court on the merits and judgment rendered, it should not be liable to be reversed purely on technical grounds unless it had resulted in failure of justice and the policy of the legislature has been to treat objections to jurisdiction, both territorial and pecuniary, as technical and should not be open to consideration by an appellate court unless there has been a prejudice on the merits. Referring to Section 11 of the Suits valuation Act it further held that the prejudice contemplated by the Section is something different from the fact of the appeal having been heard in a forum which would not have been competent to hear it on a correct valuation of the suit as ultimately determined. A similar question cropped up for consideration in the case of Nandita Bose –Vs.-Ratanlal Nahata, reported in AIR 1987 SC 1947 . In that case the Supreme Court held that when the suit is filed for the recovery of money the amount claimed has to be included in determining the value of the suit. The Supreme Court was of the view that the question was to be decided at the conclusion of the trial along with other issues arising in the suit. The Court held that the claim for mesne profit/ damages was neither palpably absurd nor imaginary. The Court went on to observe that the acceptance of the view put forward by the tenant may lead to encourage him who has forfeited his right to tenancy to carry on a dilatory litigation without compensating a landlord suitably for the loss suffered by him on account of the unreasonable deprivation of the possession of his premises over a long period until he is able to get possession of the premises through Court. The facts in the case of J. Thomas & Co. Pvt. Ltd. & Another (Supra) have a good degree of resemblance with the facts involved in this case. The tenant in that case came into possession under a registered indenture of lease for a period of 21 years with an option to renew for a further period of five years given to the lessee. The initial period of 21 years ended in the year 1986. Rent at the rate of Rs.950/- per month was thereafter paid and accepted for five years. There also a summary decree for eviction under Chapter XIIIA of the Original Side Rules was passed by the learned Trial Judge which was challenged in appeal. In appeal two points were taken by the appellant of which we are here concerned only with the first one for our present purpose, i.e., fraudulent pecuniary valuation of suit seeking to invoke the pecuniary jurisdiction of the Court wrongfully. In appeal two points were taken by the appellant of which we are here concerned only with the first one for our present purpose, i.e., fraudulent pecuniary valuation of suit seeking to invoke the pecuniary jurisdiction of the Court wrongfully. A Division Bench of our Court negatived the contention holding that a summary decree passed by the learned trial Judge cannot be upset on the ground of fraudulent inflation of the pecuniary claim of the plaintiff. It has been held that if the Court is of an opinion that the claim of the plaintiff is absurd and has been made absurdly high to deprive the proper lower court of its jurisdiction then and in that event the suit can be dismissed on that ground. Their Lordships were of the view that for success of such a plea the plaintiff’s case had to be very bad. Reference may also be made to the case of In re: Smt. Dalia Ghosh, reported in 1991(2) CLJ 226 wherein a Division Bench of this Court relying on the case of Nandita Bose (Supra) and a few others had held that the valuation put in by the plaintiff to be demonstratively arbitrary and unreasonable the same has to be established patently to be arbitrary and unreasonable. In the present case there is no sufficient material placed before us to satisfy the above test and as such we hold that the contentions of the appellant must fail. If the suit is filed in High Court parties do not stand to lose a forum because from a decree passed by the City Civil Court also an appeal lies to a Division Bench of this Court. If a suit is overvalued High Court still has the jurisdiction to dismiss the same or pass a decree for less than rupees ten lacs. But if on the contrary the plaint is directed to be presented before the City Civil Court that Court will lack jurisdiction to entertain the suit being valued more than rupees ten lacs. On that ground also the decree is liable to be upheld. In the present case the premises under occupation of the appellant is the first floor of a building at Lindsey Street measuring 3,265 square feet carpet area and it is overlooking Lindsey Street on the front. On that ground also the decree is liable to be upheld. In the present case the premises under occupation of the appellant is the first floor of a building at Lindsey Street measuring 3,265 square feet carpet area and it is overlooking Lindsey Street on the front. A flat located in a commercially viable area and that too at such a prime location of the city of Kolkata as the Lindsey Street the mesne profits claimed by the plaintiff does not appear to be a fraudulent one. The appellant’s case is that if the plaintiff was willing to accept Rs.24,487.50 per month, as claimed through its learned advocate, in the month of August, 2008 it cannot claim the mesne profit at the rate at which it has been claimed. This does not seem to be a very valid defence. The respondent had merely asked at an old rate as the lease was executed as early as in 1987. Certainly the premises in question is not commercially obtainable today at the rate at which the rent was paid. Following the principles laid down in the case of J. Thomas & Co. Pvt. Ltd. & Another (Supra) we are of the view that the mesne profit claimed cannot be called to be a fraudulent one. Their Lordships had held that allowing the whole suit to go to trial on an issue of this nature would be improper and unjust. We respectfully agree with the view expressed by Their Lordships and find no merit in the appeal. The appeal, therefore, is dismissed. There shall, however, no order as to costs. Urgent photostat certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities. SAMBUDDHA CHAKRABARTI, J I agree. J. N. PATEL, CJ. Later: After the judgment and order in the case has been delivered, Mr. Sabyasachi Sen, learned Advocate appearing for the respondent, prays that all interim orders granted earlier may be vacated. With the dismissal of the appeal, all interim orders granted earlier are hereby vacated. On the prayer of Mr. Amitesh Banerjee, learned Advocate for the appellant, we stay the effect and operation of the judgment and order for a period of 4 (four) weeks. SAMBUDDHA CHAKRABARTI, J. I agree. J.N. PATEL, CJ.