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2024 DIGILAW 1333 (CAL)

Maharshi Commerce Limited v. Sunanda Das

2024-07-25

KRISHNA RAO

body2024
JUDGMENT : Krishna Rao, J. 1. The plaintiff has filed the present suit under Chapter XXXVIII, Rule 1(A) of the Original Side Rules of this Court praying for decree for eviction and recovery of vacant and peaceful possession of the suit premises along with arrears of rent for a sum of Rs.5,48,903/- from November 2018 till September 2021. Further decree of Rs.14,40,000/- and a decree for mesne profit at the rate of Rs.300/-per sq. ft. per month on and from 1st October, 2021 till handing over the vacant possession of the suit property to the plaintiff and interest at the rate of 18% per annum. 2. The plaintiff has also filed an application being G.A. No. 1 of 2023 praying for final judgment and decree. 3. Since 10th June, 1998, the plaintiff has been the owner of the part of the premises no.18, Rabindra Sarani, Kolkata-700001 (Commonly known as “Poddar Court”). In the month of September, 2003, the defendant no.1 was inducted as a tenant in a portion of the ground floor, which is an area comprising of 200 sq.ft. in respect of room no.12 of premises. no.18, Rabindra Sarani, Kolkata – 700001, by entering into an agreement in writing dated 1st September, 2003. 4. The defendant no.2 is the son of the defendant no.1, who by a Deed of Partnership dated 1st April, 2013, with the defendant no.1 joined the business and is also in occupation and possession of the suit premises. 5. It was expressly agreed between the plaintiff and the defendant no.1 that the monthly rent would be Rs.13.30p on gross covered area basis, which will subsequently be increasing at a rate of 8% after every year. 6. It is submitted by the plaintiff that the defendant no.1 has paid the rent to the plaintiff from September, 2003 till October, 2018. 7. The last payment made by the defendant no.1 was on 1st October, 2018, by way of a cheque being No. 813242, for Rs.14,363/- including Corporation rates and taxes at the rate of Rs.3,416/-, maintenance charges at the rate of Rs.843/-, Goods and Services Tax at the rate of Rs.1,670/- and the basic rent of the defendant no.1 without the Corporation rates and taxes and Goods and Service Tax was Rs.9277/-per month. 8. 8. The particulars of rent payable by the defendant no.1, excluding all rates and taxes from September, 2017 till September, 2021, as per the revised terms of the agreement between the plaintiff and defendant no.1. are as follows : Month & Year Rent in Rupees Maintenance in Rupees Total Rent in Rupees September - 2017 7810.00/- 781.00/- 8591.00/- September - 2018 8434.00/- 843.00/- 9277.00/- September - 2019 9109.00/- 911.00/- 10020.00/- September - 2020 9837.00/- 984.00/- 10821.00/- September - 2021 10624.00/- 1062.00/- 11686.00/- 9. The plaintiff submits that the rent of the defendant no.1 as on September, 2021 was Rs.10,624/-. 10. It is the submission of the plaintiff that in view of alleged overdue rents, the plaintiff by a letter dated 12th December, 2019, called upon defendant no.1 to pay the arrears of rent, to which the defendant no.2 replied by a letter dated 18th December, 2019, stating that defendant no.2 is also a tenant of the suit premises and also claimed to be a partner of the purported partnership firm M/s. Diamond Electrical Agencies. 11. Again, by a letter dated 18th March, 2021, the plaintiff called upon the defendant no.1 to pay the arear of rent of Rs.4,47,045/-. The defendant no.2 through his Learned Advocate sent a reply dated 24th March, 2021, claimed to be a tenant of the suit premises and also claimed to be a partner of the purported partnership firm M/s. Diamond Electrical Agencies. 12. Upon receipt of reply dated 24th March, 2021, the plaintiff called upon the defendant no.2, by its letter dated 5th April, 2021 to provide the purported Partnership Deed. By a letter dated 8th April, 2021, the defendant no.2 through his Learned Advocate provided the purported Partnership Deed dated 1st April, 2013. 13. On 27th September, 2021, the plaintiff sent a notice to the defendant no.1 under Section 106 of the Transfer of Property Act, 1882 and determined and terminated the tenancy of the defendant no.1 in respect of the suit premises. The notice was duly received by the defendant no.1 on 30th September, 2021 but neither the defendant no.1 has vacated the premises nor had sent any reply to the said notice. 14. The plaintiff says that by way of notice under Section 106 of the Transfer of Property Act, 1882, the tenancy of the defendant no.1 was determined and thus the defendants are occupying the suit premises as trespassers. 15. 14. The plaintiff says that by way of notice under Section 106 of the Transfer of Property Act, 1882, the tenancy of the defendant no.1 was determined and thus the defendants are occupying the suit premises as trespassers. 15. The plaintiff submits that the defendants have received or might have received a sum of Rs.300/-per sq.ft. per month from the suit premises which is also the reasonable letting out commercial value in that locality. The suit premises herein is located at the business hub of Kolkata, in these circumstances, the plaintiff claims mesne profits @Rs.300/-per sq.ft. per month which amounts to a total sum of Rs.14,40,000/- on and from 1st October, 2021, till September, 2023. 16. The plaintiff says that the defendants have filed written statement but have not denied the fact that at the time when the agreement was entered between the plaintiff and the defendant no.1, the defendant no.1 was the sole proprietor of ‘Diamond Electrical Agencies’. He submits that the defendants have denied to give details and particulars of formation and existence of the purported partnership deed between the defendants. 17. Learned Counsel for the plaintiff says that till the determination of tenancy by the plaintiff, the defendant no.1 was the sole tenant with respect to the suit premises. He submits that the defendant no.2 has not disclosed any document authorising the defendant no.2 by the defendant no.1 to represent the defendant no.1 in the present proceedings and the plaintiff disputes the competence and authority of the defendant no.2 to make averments and file pleadings on behalf of the defendant no.1 18. Mr. Shuvasish Sengupta, Learned Advocate, appearing for the defendants submits that the proprietorship firm namely, Diamond Electrical Agencies was the tenant by virtue of the agreement dated 1st September, 2003. 19. Learned Counsel for the defendants submits that the proprietorship firm was converted into a partnership firm consisting of Smt. Sunanda Das, who was the proprietor of the firm and her son, Sri Ashok Das and the said firm thereafter continued to pay the monthly rent to the plaintiff and the same was accepted without any objection and/or demur. 20. 19. Learned Counsel for the defendants submits that the proprietorship firm was converted into a partnership firm consisting of Smt. Sunanda Das, who was the proprietor of the firm and her son, Sri Ashok Das and the said firm thereafter continued to pay the monthly rent to the plaintiff and the same was accepted without any objection and/or demur. 20. The defendants submit that vide a letter dated 8th April, 2021, the defendant no.2, had produced the partnership deed dated 1st April, 2013, which was executed between the defendant no.1 and defendant no.2, therefore, it is evident from the communications that the plaintiff had knowledge regarding the existence of the partnership firm and the defendant no.2 being one of its partners. 21. It is the submissions of the defendants that the plaint does not disclose any cause of action as against the defendants initially as per the terms and conditions of the communication dated 1st September, 2003, M/s. Diamond Electrical Agencies, as a proprietorship firm was inducted as tenant and subsequently the proprietorship converted to partnership firm but no notice is given to the firm namely M/s. Diamond Electrical Agencies. 22. The defendants submits that the notice dated 27th September, 2021, was issued to Ms. Sunanda Das in person and not either on the proprietor or the partnership firm, therefore, the notice is bad in law and cannot be the basis for evicting the said tenant, namely M/s. Diamond Electrical Agencies from the said premises. 23. It is the submission of the defendants that on and from October, 2018, the plaintiff started refusing to accept the rent from the said Diamond Electrical Agencies. By a letter dated 3rd January, 2019, the said Diamond Electrical Agencies furnished the rent to the plaintiff which were first refused but later on it was accepted by the plaintiff by issuing a letter dated 7th January, 2019. 24. The Learned Counsel for the defendants submits that the plaintiff has supressed the said acceptance of rent and has misrepresented before this court and has also made false claims. 25. Heard the Learned Counsel for the respective parties and perused the materials on record. On 1st September, 2003, the plaintiff had let out the suit premises to M/s Diamond Electrical Agencies wherein the defendant no.1 was the sole proprietor of the suit premises. 25. Heard the Learned Counsel for the respective parties and perused the materials on record. On 1st September, 2003, the plaintiff had let out the suit premises to M/s Diamond Electrical Agencies wherein the defendant no.1 was the sole proprietor of the suit premises. In Clause 7 of the said agreement, it is mentioned that the defendant no.1 who was the sole proprietor will not transfer. “You will not transfer, assign, sublet and shall not also grant any license or agency in favour of anybody in any manner whatsoever or part with possession of the said shop space or any part thereof and shall use the same for the exclusive purpose of storing.” 26. Plaintiff has received monthly rent along with all taxes of the suit premises till the month of October, 2018. On 12th December, 2019, the plaintiff has sent a notice to the defendant no.1 calling upon the defendant no.1 for payment of arrears of rent along with all taxes amounting to Rs.1,90,166/- from September, 2019 to November, 2019. The defendant no. 2 as a partner of M/s Diamond Electrical Agencies through his Advocate sent a reply informing the plaintiff that the plaintiff all of a sudden from the month of November, 2018 refused to accept the rent but the defendants are ready and willing to pay rent provided the plaintiff issued letters in the name of Diamond Electrical Agencies and not to its partners by name as the defendant no.1 is not a tenant but she is one of the partner along with defendant no.2 of Diamond Electrical Agencies. Several correspondences were made by the plaintiff with the defendant no.1 but all replies were sent by the defendant no. 2 as partner of the firm. As per request of the plaintiff, the defendant no.2 by a letter dated 8th April, 2021 through his Learned Advocate has forwarded Partnership Deed dated 1st April, 2013 to the plaintiff. In the said reply also, the defendant no.2 has informed the plaintiff that the defendants are is ready to pay arrears as well as monthly rent of the premises subject to providing rent receipt in the name of firm. 27. In the said reply also, the defendant no.2 has informed the plaintiff that the defendants are is ready to pay arrears as well as monthly rent of the premises subject to providing rent receipt in the name of firm. 27. By a notice under Section 106 of the Transfer of Property Act, 1882 dated 27th September, 2021, addressed to defendant no.1, the plaintiff has determined and terminated the tenancy and directed called upon the defendant no.1 to quit and vacate the premises and to handover the possession of the premises within 15 days from the date of receipt of the notice. Though the defendant no.1 has received the notice under Section 106 of the Transfer of Property Act, 1882 but has not sent any reply to the said notice nor the defendants have vacated the said premises. 28. Defendants have raised the defense that the notice issued by the plaintiff is bad in law as the plaintiff has neither issued the notice of termination to the firm nor to the defendant no.2 who is also the partner of the firm. As per the case of the plaintiff, the plaintiff has inducted the defendant no.1 as tenant being the proprietor of M/s Diamond Electrical Agencies and the plaintiff did not recognized the defendant no.2 as a partner of the firm and no information was given to the plaintiff about the transfer of proprietorship company to partnership company by inducting the defendant no.2 as partner of the said firm and when the plaintiff came to know about the same, the plaintiff has terminated tenancy with the defendant no.1. The plaintiff has relied upon Section 24 of the Partnership Act, 1932, which reads as follows : “24. Effect of notice to acting partner.— Notice to a partner, who habitually acts in the business of the firm of any matter relating to the affairs of the firm operates as notice to the firm, except in the case of a fraud on the firm committed by or with the consent of that partner.” 29. Initially an agreement was entered between the plaintiff and M/s Diamond Electrical Agencies on 1st September, 2003, at that point of time, the defendant no.1 was the sole proprietor of the said firm. Now the said firm is a partnership firm consisting of two partners, defendant no.1 and 2. Initially an agreement was entered between the plaintiff and M/s Diamond Electrical Agencies on 1st September, 2003, at that point of time, the defendant no.1 was the sole proprietor of the said firm. Now the said firm is a partnership firm consisting of two partners, defendant no.1 and 2. The plaintiff has issued notice under Section 106 of the Transfer of Property Act, 1882 only to the defendant no.1 on 27th September, 2021. No notice is issued either to the firm or to the defendant no.2, now the question is whether the notice issued by the plaintiff to the defendant no.1 is valid or not. The question raised by the defendants with regard to the notice that there is no tenancy in the name of the defendant no.1. Admittedly, the defendant no.1 is the partner of the firm with the defendant no.2 and service of notice upon defendant no.2 is not denied. In the case of APOLLO ZIPPER INDIA LTD. Vs. W. NEWMAN & CO. LTD. reported in (2018) 6 SCC 744 , the Hon’ble Supreme Court held that if the defendant does not raise any objection to the validity of quit notice at the first available opportunity, the objection will be deemed to have been denied. In the instant case also the defendant no.1 received notice but has did not give any reply to the said notice, thus the defendants deemed to waived their right to raise objection to the notice issued by the plaintiff under Section 106 of the Transfer of Property Act, 1882 to defendant no.1. In the present case, the plaintiff has issued notice to defendant no.1 under Section 106 of the Transfer of Property Act, 1882 and the defendant no.1 has received the said notice but inspite of receipt of the notice, the defendant no.1 has not sent any reply by raising objection to the notice, thus this Court hold that now in the present application the defendants cannot raise any objection to the said notice as the defendants lost their chance to raised objection to the notice. Section 24 of the Partnership Act, 1932 deals with the effect of notice to a partner. Such notice may be binding if the following conditions are satisfied : (a) The notice must be given to the partner. (b) The notice must be a notice of any matter relating to the affairs of the firm. Section 24 of the Partnership Act, 1932 deals with the effect of notice to a partner. Such notice may be binding if the following conditions are satisfied : (a) The notice must be given to the partner. (b) The notice must be a notice of any matter relating to the affairs of the firm. (c) Fraud should not have been committed with the consent of such partner on the firm. Section 24 is based on the principle that as a partner stands as an agent in relation to the firm, a notice to the agent is tantamount to the principal and vice versa. As a general rule, notice to a principal is notice to all his agent, and notice to an agent of matters connected with his agency is notice to his principal. In the case of Manohar Lal & Co. Vs. Axis Bank Ltd. reported in 2018 SCC OnLine Cal 16868, the Hon’ble Division Bench of this Court held that Section 24 of the Partnership Act, 1932, which recognizes that the receipt of any notice by a partner is deemed to be good service of such notice on the firm, unless the interest of the receiving partner is contrary to the interest of the firm. In the case of Ramesh Chand Gupta Vs. Pawan Kumar Jain reported in 2017 Supreme (All) 826, the Allahabad High Court held that in view of the provisions of Section 24 and Section 25 of the Partnership Act, 1932, one partner is the agent of the other, Section 24 of the Partnership Act, 1932 deals with the effect of the notice to a partner. Such notice may be binding if the notice is given to a partner, the notice must be a notice of any matter relating to the affairs of the firm and fraud should not have been committed with the consent of such partner on the firm. The partner stands as an agent in relation to the firm, a notice to the agent is tantamount to the principal and vice versa. Notice to a principal is notice to all his agents and notice to agent of the matters concern connected with his agency is notice to the principal. 30. The next question raised by the defendants that the plaintiff has filed the suit in the name of the defendant no. 1 in individual capacity though the firm is a partnership firm. Notice to a principal is notice to all his agents and notice to agent of the matters concern connected with his agency is notice to the principal. 30. The next question raised by the defendants that the plaintiff has filed the suit in the name of the defendant no. 1 in individual capacity though the firm is a partnership firm. “Order XXX. Rule 1.-Suing of partners in name of firm.—(1) Any two or more persons claiming or being liable as partners and carrying on business in, 1 [India] may sue or be sued in the name of the firm (if any) of which such persons were partners at the time of the accruing of the cause of action, and any party to a suit may in such case apply to the Court for a statement of the names and addresses of the persons who were, at the time of the accruing of the cause of action, partners in such firm, to be furnished and verified in such manner as the Court may direct. (2) Where persons sue or are sued partners in the name of their firm under sub-rule (1), it shall, in the case of any pleading or other document required by or under this Code to be signed, verified or certified by the plaintiff of the defendant, suffice such pleading or other document is signed, verified or certified by any one of such persons.” Learned Counsel for the plaintiff has relied upon the judgment in the case of Ashok Transport Agency Vs. Awadhesh Kumar and Another reported in (1998) 5 SCC 567 wherein the Hon’ble Supreme Court held that a partnership is govern by the provisions of Indian Partnership Act, 1932. Though a partnership is not a juristic person but Order XXX, Rule 1 CPC, 1908 enables the partner of a partnership firm to sue or to be sued in the name of the firm. 31. The Code of Civil Procedure has provided in Order XXX, the procedure for suits by and against firms. Rule 1 provides that such persons may sue or be sued in the name of the firm. It is significant that the Code does not recognise the legal existence of a firm as such. It enables persons constituting a firm to sue in an assumed name, i.e., the name of the firm. Rule 1 provides that such persons may sue or be sued in the name of the firm. It is significant that the Code does not recognise the legal existence of a firm as such. It enables persons constituting a firm to sue in an assumed name, i.e., the name of the firm. The right is not given to the firm itself but to the individual partners who constitute the firm. The next relevant rule is Rule 3 in that Order which provides that where persons are sued as partners in the name of their firm, summons shall be served either on any one or more of the partners or upon any person having the control and management of the business. This is a special provision in respect of service of summons in such suits. The only other provision of law contained in Order XXX which is relevant in this connection is Rule 10 which provides that (sic ‘any person carrying on business in a name or style other’) than his own may be sued in such name or style as if it were a firm name; and so far as the nature of the case will permit, all rules contained in Order XXX will apply. It will thus appear that Order XXX, provides for suits by or against two or more persons carrying on business as a firm as also in respect of a suit against a person carrying on business in an assumed name. It will thus appear that where one person is carrying on business in an assumed name, he cannot bring a suit in such an assumed name but he can be sued in such a name as if it were a firm name. In the case of a firm, however, the persons carrying on business in the firm name can sue or be sued in such name. The effect of these provisions in law is that the suit against a firm is really a suit against the partners in an assumed name and even in the case of a suit against a person instituted under Order XXX, Rule 10 of the Code of Civil Procedure, 1908, the suit is really against that person although he has been sued in the assumed name as if it were a firm name. The suit, is thus against partners themselves under Rule 1 and against the particular person himself under Rule 10. 32. The next argument made by the defendants that the application filed by the plaintiff under Chapter XIIIA is not maintainable against any trespasser or an unlawful occupant and have relied upon the judgment in the case of Nandlal Rathi Vs. A.T. Gooyee Enterprises reported in (2012) 1 CHN 409 wherein the Hon’ble Division Bench of this Court held that if a suit is brought by an owner against a trespasser not arising out of rank trespasser provisions of this Rule not have any application for writing final judgment. In the present case, it is the specific case of the plaintiff that the defendants failed to pay the monthly rent from the month of November 2018 and even after receipt of the notice under Section 106 of the Transfer of Property Act, 1882, the defendants fail to vacate the premises and hand over the premises to the plaintiff and thus the argument of the defendants is negated. The defendants have also relied upon the judgement in the case of IDBI Trusteeship Services Limited Vs. Hubtown Limited reported in (2017) 1 SCC 568 wherein the Hon’ble Supreme Court by relying upon the principles stated in paragraph 8 of Machelec Case reported in (1976) 4 SCC 687 and the binding decision of four judges in the case of Milkhiram reported in AIR 1965 SC 1698 , held that : “17. Accordingly, the principles stated in paragraph 8 of Mechelec’s case will now stand superseded, given the amendment of O.XXXVII R.3, and the binding decision of four judges in Milkhiram’s case, as follows: 17.1. If the defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit; 17.2. If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend; 17.3. If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend; 17.3. Even if the defendant raises triable issues, if a doubt is left with the trial judge about the defendant’s good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security; 17.4. If the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires. 17.5. If the Defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgment forthwith; 17.6. If any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant in court.” Considering the above facts and circumstances, this Court finds that there is remote chance of the defendant to succeed in the suit but only for giving an opportunity to the defendants as the defendants averred that the defendants are ready and willing to pay rent, this Court allow the defendants to proceed with the suit subject to secure the amount of Rs.11,00,000/-(Rupees Eleven Lacs Only) with the Registrar, Original Side of this Court with in four weeks from date. If the defendants secure the said amount with the Registrar, the Registrar shall invest the said amount in the interest bearing auto renewal fixed deposit with any Nationalized Bank. In case, the defendants fail to secure the amount within the aforesaid period, the defendants shall vacate the premises and hand over the possession of the suit premises to the plaintiff. 33. In view of the above, G.A. No. 1 of 2023 is disposed of.