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2013 DIGILAW 66 (CAL)

K. C. Nath & Co. v. Ananda Mohan Bose

2013-02-05

TARUN KUMAR GUPTA

body2013
JUDGMENT Tarun Kumar Gupta, J. This is directed against judgment and decree dated 30th March, 1992 passed by learned Assistant District Judge, Second Court, Howrah in Title Appeal No.107 of 1989 reversing the judgment and decree dated 15th April, 1989 passed by learned Munsif, First Court, Howrah in Title Suit No.297 of 1997. One Lalit Mohan Bose, the predecessor-in-interest of respondent Nos. 1 to 5 filed said suit for eviction alleging that M/s. K. C. Nath and Company (defendant No.1) through his proprietor Krishna Chandra Nath (defendant No.2) was the monthly tenant under the plaintiff in respect of the suit premises comprising of three rooms at a rental of Rs.80/-per month payable according to English calendar month. The tenant defendant No.1 Company defaulted in payment of rent since July, 1976. Though the defendant No.1 Company was permitted to run business in the suit premises setting up only two turning machines but in violation of the agreement nine said machines were set up causing nuisance as well as damage to the suit property. The suit premises was also sublet to defendant No.3 (A. T. Nath alias Ausotosh Nath) without previous knowledge and written consent of the landlord. The plaintiff terminated tenancy of the defendant tenant in the suit premises by notice dated 7th July, 1997 which was duly received by K. C. Nath as proprietor of defendant No.1 Company. As the suit premises was not vacated, the suit for eviction was filed on the grounds of default, nuisance and annoyance, damages as well as for subletting. The defendant No.3 Ausotosh Nath was permitted to be added as a party. He filed a written statement denying material allegations of the plaint and contending inter alia that he as proprietor of the defendant No.1 Company was first inducted in the suit premises in one room at a rental of Rs.20/-per month and thereafter all three rooms of the suit premises were taken at a monthly rent of Rs.55/-per month from August, 1956 and thereafter on mutual agreement his cousin brother K. C. Nath started to run said business. It is further alleged that K. C. Nath defendant No.2 proprietor of M/s. K. C. Nath and Company sold the said business with all its assets and goodwill to this defendant under registered sale deed dated 08.11.1962 on receipt of valuable consideration, and that to the knowledge of the plaintiff landlord, present defendant ran said business by taking trade licence and electric energy. It is further case that plaintiff also accepted rent from this defendant as proprietor of M/s. K. C. Nath and Company but in spite of that the suit of eviction was filed without impleading the present defendant being the real tenant and that the suit was liable to be dismissed for want of notice. The defendant No.2 later filed a written statement alleging that he was never a tenant in respect of the suit premises and that defendant Ausotosh Nath defendant No.3) was rather the recorded tenant. It is his further case that he with partnership of Ausotosh Nath (defendant No.3) started a business under the name and style K. C. Nath and Company in the suit premises and that for convenience the rent receipts were issued in the name of said company. It is further case that he sold away all assets and goods of said company to said Ausotosh Nath who is running said business since then as proprietor within the knowledge of the plaintiff. It is his further case that since selling out the said business he had no connection whatsoever with said business which is being run by Ausotosh Nath (defendant No.3). Learned Trial Court framed several issues on the basis of the pleadings of the parties including the issue as to whether the defendant sublet the suit property o A. T. Nath (defendant No.3). Learned Trial Court dismissed the suit for eviction on all grounds including the ground of subletting. However, learned Lower Appellate Court was pleased to decree the suit on the ground of subletting in the appeal preferred by the plaintiff landlord. This second appeal filed at the instance of the defendant No.3 Ausotosh Nath was heard on the following substantial questions of law. (1) Whether the learned Lower Appellate Court substantially erred in law by declaring defendant No.3 as a sub-tenant without applying correct legal test. This second appeal filed at the instance of the defendant No.3 Ausotosh Nath was heard on the following substantial questions of law. (1) Whether the learned Lower Appellate Court substantially erred in law by declaring defendant No.3 as a sub-tenant without applying correct legal test. (2) Whether the learned Lower Appellate Court substantially erred in law by holding that the suit was maintainable though no notice of ejectment was served upon the defendant No.3 who claimed to be the tenant of the suit premises and produced sufficient documents in support of the same. Mr. Halder, learned counsel for the appellants, submits that Ausotosh Nath (defendant No.3) after appearance in the Court as an added defendant filed application under Section 17 of the West Bengal Premises Tenancy Act, 1956 and that the same was disposed of by learned Trial Court. According to him, though plaintiff moved Hon’ble High Court against said order but Hon’ble High Court disposed of the matter ex parte vide order dated 26.02.1988 keeping the question regarding relationship of landlord and tenant open. He submits that though said question was kept open but learned Trial Court did not make any observation on this regard as the order of the Hon’ble Court was not placed before learned Trial Court during trial. He further submits that no specific issue regarding landlord tenant relationship was also framed and that learned Lower Appellate Court should have remanded the matter to the learned Trial Court on that score. Mr. Halder next submits that Ausotosh Nath (defendant No.3) admittedly took the tenancy of the suit premises in his own name and that though his cousin K. C. Nath (defendant No.2) started a business under name and style K. C. Nath and Company in the suit premises but the earlier tenancy continued though landlord issued rent receipts in the name of the company. He next submits that K. C. Nath (defendant No.2) sold away said business to this appellant defendant Ausotosh Nath (defendant No.3) under a deed dated 08.11.1962 and that since then this appellant defendant continued to run said business in the suit premises as the sole proprietor by taking trade licence and electricity and also by making payments to the plaintiff landlord within his knowledge. According to him, learned Lower Appellate Court failed to note all these facts in their proper perspective and accordingly came to a wrong finding that K. C. Nath being owner of K. C. Nath and Company was the tenant or that by sale of the Company by K. C. Nath to Ausotosh Nath sub-tenancy was created or that sub-tenancy was created without knowledge of the plaintiff landlord and that on that score a decree of eviction was to be passed. He further submits that if it is admitted that a new tenancy was created in the name of the defendant No.1 Company then also there was no question of sub-letting as defendant No.1 Company is continuing to be in possession of the suit premises as a tenant on payment of rents. According to him, in that case there was no bearing on the tenancy of the defendant No.1 Company even if there was change of ownership. Mr. Rakshit, learned counsel for the respondents, on the other hand, submits that the question of remand by learned Lower Appellate Court to the Trial Court for the purpose of deciding landlord tenant’s relationship did not arise as learned Lower Appellate Court must adjudicate the same on the basis of materials on record. In this connection he further submits that absence of any specific issue on that score did not matter as both the parties led evidence on that point knowing well that it was the main issue of the dispute between the parties. Admittedly, the main question in the suit was who was the tenant under the plaintiff landlord in the suit premises and whether there was any act of illegal subletting. Both the parties led evidence on that score. As such, it mattered little whether any specific issue as to landlord and tenant was framed or not as it did not cause any prejudice to either of the parties. In this connection I rely on the case law reported in AIR 1966 Supreme Court page 735 (Bhagabati Prosad vs. Chandramaul). It appears from the impugned judgment of learned Lower Appellate Court that he meticulously examined the relevant documents namely exhibits B, C, D and 11 series being rent receipts and counterfoils for long period to decide the most important issue namely who was the tenant under the plaintiff landlord in the suit premises. It appears from the impugned judgment of learned Lower Appellate Court that he meticulously examined the relevant documents namely exhibits B, C, D and 11 series being rent receipts and counterfoils for long period to decide the most important issue namely who was the tenant under the plaintiff landlord in the suit premises. It appears from these documents that upto December, 1957 the defendant No.3 Ausotosh Nath was a tenant in respect of the suit premises at a rental of Rs.55/- per month. It further appears that before 1957 Sri Ausotosh Nath was a tenant at a rental of Rs.20/- per month. However, it appears that since January, 1958 the rent receipts stood in the name of defendant No.1 K. C. Nath and Company. From January, 1958 to April, 1961 it was at the rate of Rs.60/- per month. Thereafter, it was enhanced to Rs.65/- per month, then to Rs.72/- per month and then Rs.80/- per month – all in the name of defendant No.1 Company. Though defendant No.2 K. C. Nath tried to make out a case in a written statement that he along with Ausotosh Nath defendant No.3, his cousin brother, started said business K. C. Nath and Company in partnership but there was no evidence either oral or documentary in this regard. Rather it came out from the oral evidence of both Ausotosh Nath (D.W.1) and K. C. Nath (D.W.2) that K. C. Nath was the sole proprietor of said K. C. Nath and Company when it was started on and from January, 1958 and that he sold out the same including all its assets and goodwill to Ausotosh Nath (defendant No.3) under a deed dated 8th of November, 1962 and that since then K. C. Nath (D.W.2) had no connection whatsoever with said business or the suit property. It appears from the evidence on record, both oral and documentary, that rent receipt was issued in the name of Ausotosh Nath (defendant No.3) in respect of the said premises till December, 1957 and on and from January, 1958 the rent receipts were issued in the name of K. C. Nath and Company being a proprietorship firm of defendant No.2 K. C. Nath. It also came out that the rate of rent was also enhanced from Rs.55/- to Rs.60/-per month. It also came out that the rate of rent was also enhanced from Rs.55/- to Rs.60/-per month. As such, learned Lower Appellate Court rightly held that since January, 1958 a new tenancy was created by the plaintiff landlord in favour of defendant No.1 K. C. Nath and Company. Admittedly, it came out from the admission of the defendants (D.W.1 and D.W.2) that K. C. Nath (defendant No.2) was the sole proprietor of said K.C. Nath and Company (defendant No.1). As such, defendant No.1 K. C. Nath and Company became the tenant under the plaintiff landlord since January, 1958 to be represented by its sole proprietor K. C. Nath. In view of the said evidence on record learned Lower Appellate Court rightly held that defendant K. C. Nath and Company being represented by its sole proprietor K. C. Nath became the tenant of the suit premises with effect from January, 1958 resulting extinguishing the tenancy right of Ausotosh Nath (defendant No.3) in the suit premises. It came out from the evidence on record that the rent receipts were issued all along in the name of defendant Company and rent was enhanced from time to time. Admittedly, K. C. Nath (defendant No.2) being the sole proprietor of defendant No.1 Company sold away its assets including goodwill to Ausotosh Nath (defendant No.3) through a registered deed dated 08.11.1962 (Ext.F). The exhibit F coupled with other evidence on record clearly showed that K. C. Nath (defendant No.2) was the sole owner of defendant No.1 Company since its inception when new tenancy was effected with effect from January, 1958 and that on selling of the assets and goodwill of said Company to Ausotosh Nath (defendant No.3) by said deed dated 08.11.1962 he divested himself from the ownership of said company. He also categorically deposed that since said selling out of the Company he had no connection whatsoever with said company and never visited said Company. Admittedly, after said sale Ausotosh Nath (defendant No.3) became the new sole owner of defendant No.1 Company. There is no dispute that defendant No.1 K. C. Nath and Company was the tenant under the plaintiff landlord since January, 1958. Admittedly, after said sale Ausotosh Nath (defendant No.3) became the new sole owner of defendant No.1 Company. There is no dispute that defendant No.1 K. C. Nath and Company was the tenant under the plaintiff landlord since January, 1958. It is true that defendant No.2 K. C. Nath was the original proprietor of said defendant No.1 tenant Company and after the sale of the assets of said company by defendant No.2 K. C. Nath to the defendant No.3 Ausotosh Nath, defendant No.3 became the sole owner of defendant No.1 Company. But fact remains that tenancy was in the name of the defendant No.1 Company and in spite of sale of the assets by defendant No.1 Company by its erstwhile owner defendant No.2 to the new owner defendant No.3 the tenancy continued in the name of defendant No.1 Company. As defendant No.1 Company continued to remain the tenant of the suit premises under the plaintiff landlord there was no change of tenancy and / or creation of sub-tenancy even if there was change of ownership of said company. In this connection a reference may be made to the case law reported in {(1999) 7 SCC page 431 (Labanya Neogi Vs. W. B. Engineering Company}. In that case tenancy was taken in favour of a partnership firm for residential use of the firm personnels. During continuation of the tenancy agreement the firm dissolved and turned into sole proprietorship concern and one of the employees of said partnership firm who used to stay in the tenanted premises in connection with running of said partnership firm continued to use the same even after his purchase of the partnership firm. The High Court as well as the Hon’ble Apex Court held that there was no sub-letting in terms of Section 14 of the West Bengal Premises Tenancy Act, 1956 even if there was change of ownership. Said principle is squarely applicable in the facts and circumstances of the present case also. Here the tenancy was taken in the name of the defendant No.1 Company for running business. Even after change of ownership defendant No.1 Company is still being run from the suit premises. There was only change of ownership of defendant No.1 Company from defendant No.2 to defendant No.3. Here the tenancy was taken in the name of the defendant No.1 Company for running business. Even after change of ownership defendant No.1 Company is still being run from the suit premises. There was only change of ownership of defendant No.1 Company from defendant No.2 to defendant No.3. As such, there was no case of sub-letting within the meaning of Section 14 of the West Bengal Premises Tenancy Act, 1956 (henceforth to be described as Act of 1956). Learned Lower Appellate Court was wrongly swayed by the incident of change of ownership and has treated the same as creation of sub-tenancy. Accordingly, I find and hold that learned Lower Appellate Court has wrongly held that there was creation of sub-tenancy on account of sale of the assets of defendant No.1 tenant Company by defendant No.2 to defendant No.3. If that be the position then defendant No.3 being the owner of defendant No.1 Company was entitled to get the notice of eviction under Section 13(6) of the Act of 1956 as owner of the defendant No.1 tenant Company. Admittedly, no notice was served upon defendant No.3 under Section 13(6) of the Act of 1956 before filing of the suit for eviction. As such, the suit was also not maintainable for want of proper notice upon the defendant No.1 Company to be represented by its owner, defendant No.3. As a result, the appeal is hereby allowed on contest. The impugned judgment and decree of learned Lower Appellate Court are hereby set aside by restoring the judgment and decree of learned Trial Court though on other grounds. However, I pass no order as to costs. Send down the Lower Court records along with a copy of this judgment to the Lower Court at the earliest. Urgent photostat certified copy of this judgment be supplied to learned counsels of the parties, if applied for.