^•s^ ^ '^•-•>"" THE HIGH COURT OF JUDICATURE CHHATTISGARH AT BILASPUR SECOND APPEAL N0. c ? 1200J Appellant Plaintiff "M/s Vasudha Udyog - Through its Proprietor Shri 'T'iirmal Mahawar, S/o Umraolal Mahawar, Aged about 51 years, Plot No.5, Industrial Area, Bhanpuri, Raipur, Tahsil & Disst. Raipur (C.G.) (Wrongly mentioned as Nirmal Mahawar, S/o Umraolal Mahawar in cause title of impugned judgment of appellate court) Versus Respondent Defendants 5 ^ ^-ehhattisgarh State Industrial Development Corporation Limited - Through its Managing Director, C.G./M.P. State Industrial Development Corporation, B-4, M.R. Colony, Shailendra Nagar, Raipur. At present office at - LIC Commereial premises, Pandri, Raipur (CG) SECOND APPEAL U/S 100 OF THE CODE OF CIVIL PROCEDURE ^ Jt^oi- ^^£_^^3. ^ M7l^ f{ HIGH COURT OF CHHATTISeARH AT BU-ASPUR IS? Sinal^BencJi: Hpn'ble Shri JusticePrashant Kumar Mishra Second Appeal No.1 of 2006 M/s Vasudha Udyog versus Chhattisgarh State Industrial Development Corporation Limited JUDGIVIENT & Postfor 28-9-2010 Sd//- Prashant Kumar Mishra Judge 1 >^A ~''st''. ' -1 "^ § .-?? '^^l-.y^' HlGHCOiJRTL. CHHATTISGARH AT BILASPUR Sinale Bench: Hon'ble Shrijystice Prashant Kumar Mishra Second Appeal No.1 of 2006 Appellant Respondent versus M/s Vasudha Udyog Chhattisgarh State Industrial Development Corporation Limited * Present: Shri Anup Majumdar, counsel for theappellant. Shri Sanjay S. Agrawal, counsel for the respondent. SecondAp^eaLunderSection IQO^fthe^Code ofCivil Procedure JUDGMENT (Delivered on ^?*kSeptember, 2010) The instant second appeal has been preferred by the plaintiff whose suit for declaration and permanent injunction has been dismissed by the Courts below. 2. The case of the plaintiff was that a lease of 2.41 acres of land bearing plot No.5 situated at industrial area Bhanpuri, Raipur was granted and registered in favour of the plaintiff for a period of 99 years on 3-1-1975 and possession was delivered. The plaintiff has established an industry in the name of Vasudha Udyog and raised construction on a part of the leased premises. The plaintiff is engaged in the business of pharsi-patthar, marble-slab, tiles and other decorative stone slabs.. The defendant issued a notice on 5-4- 1998 alleging violation of the terms of the tease, whereas it has 'hever violated any terms of the lease. The plaintiff's proprietor had sf""^. '^^SS^t^'^ water to other persons, which is illegal and in violation of the conditions of the lease. 5. The trial Court decided the main issue No.1 regarding the validity of the cancellation of lease against the plaintiff and in favour of the defendant to hold that the lease-deed has rightly been cancelled because the plaintiff has violated the terms of the lease. The appellate Court has affirmed the finding recorded by the trial Court and the first appeal preferred by the plaintiff/appellant has been dismissed by the impugned judgment and decree. 6. The instant second appeal has been admitted for hearing on the following substantial questions of law: "(1) Whether cancellation of deed for want of notice to remove the breach within six months as required under Clause 16 ofthe Lease deed, is illegal? (2) Whether the lease cancelled by the Managing Director was without jurisdiction?" 7. On substantial question of law No.1, learned counsel for the appellant has argued that the cancellation of the lease is illegal, firstly because conditions of the lease have not been violated and secondly on the ground that six months' notice as required under clause 16 of the lease-deed has not been issued. Learned counsel has argued that in any case, the respondent cannot be allowed to take forcible possession. 8. On the other hand, learned counsel for the respondent has "argued that the wordings of substantial question of law No.1 would .•;?5a" '^t:.. ^'^•f—A^. L- ''aasfc ^, %. t^ ai% I1 'B S .•^f & suggest that this Court has accepted that breachof terms of the lease was committed and that the requirement under clause 16 oi the lease-deed is to give.notice in writing about the breach and not notice of six months. He would further argued that once the lessee has been allowed six months' time to remedy after service of notice, condition No.16 of the lease has been fully complied with. Learned counsel for the respondent would further submit that the rights and liabilities of the parties are embodied in the lease and the order of cancellation was, in fact, not necessary as the cancellation is automatic by operation of the terms of the lease. Drawing attention ofthis Court to paragraph 19 ofthe impugned decree, wherein it has been held that arrears are still remaining against the lessee, he woutd further submit that the piaintiff has violated clauses 6 and 7 of the tease. 9. Ex.P-1 is the registered lease-deed dated 3-1-1975. Clauses 2, 4, 5, 6, 7 and 16 of the lease-deed read thus: "2. The lesseeshalipay to the lessor for the said land a premium of Rs.964/- (Rupees Nine Hundred Sixty Four) only, within 30 days of the execution of this deed. During the terms of the lease; the lessee shall further pay to the lessor an annual ground rent of Rs.96-40 (Rupees Ninety Six and Paise Forty) only, and such other sum as may be determined in accordance with clause 3 hereunder on or before 10 day ofApril/ofeach year. 4. The lessee shall pay and discharge during the term of lease all assessment rates, taxes and charges of every description whatsoever, now or hereinafter to -V. <i ^. be assessed, imposed or charged upon the said land. 5. The lessee hereby agrees that the shall within a period of one year from the date of execution of this deed:- (i) Construct and establish on the said land a factory for the manufacture of Marble slab, Tiles Chips, Decorative stone slab allied product as well as other buildings and structures required for the efficient running of the said business at his own cost and, (ii) start manufacture of Marble slab, Tiles, chips, Decorative stone slab and other allied products in an skillful and workman like manner. 6. The lessee shall submit to the lessor or any officer authorized by him in writing from time to time the plans and specifications for the said constructions for approval of the lessors and the constructions shall be in accordance with the plans and specifications as may be approved by lessor. 7. The lessee shall use the said land and building, structures and works erected or constructed thereon only for the purpose of the said business of manufacturing marble slab, Tiles, chips, Decorative stare slab, and for construction of offices, administrative bujlding, godowns and shall not use the same for or any part thereof or permit it to be used for any other purpose without the previous permission in writing of thp lessor. 16. If the rent hereby reserved or any part thereof shall at any time in arrears and unpaid for 6 calendar months next after the date whereon the same shall \^ have become due whether the same shall here been lawfully demanded on or not or there is a breach or nonobservance by the lessee of any of the conditions and covenants therein contained and the lessee fails to je the breach within 6 months of the notice in writing given by the lessor or become insolvent or enters into an agreement with his creditors for composition of the industry this lessor will be deemed to have been terminated and lessor may not withstanding the vaiver of any <. previous cause or right or re-entry and without prejudice toanyright or or the lessor for recovery of rent remaining due under the lease enter upon the said land and re-possess the same as if this demise had not been made." 10. Ex. P-2 is the notice dated 5-4-1998 by which the defendant informed the plaintiff that by digging a tube-well/bore, clause 6D of the lease-deed has been violated and by not raising construction on 31,800 Sq.Ft., the plaintiff has violated clauses 6 and 7 ofthe lease- deed inasmuch as construction on only 7,904 Sq.Ft. has been made. It is further mentioned in the notice that as per conditions No.2 and 4 of the lease-deed, the plaintiff was required to make advance payment of lease rent, maintenance charges and street light charges by 10 of April every year, which has not been complied with and thus the conditions of the lease have been violated. It was also mentioned in the notice that the lessee is in arrears of Rs.11,311/- for the period April, 1985 to March, 1999 and that the unit is closed for a period more than six months prior to the date of notice, whereas condition No.5 of the lease stipulates that ^ "^.. ssi^. '"^•^. '^ass-?"'1 is. ^ 7 the unit should be in continuous production. Thus, this condition has also been violated. Ex. P-3 is the reply dated 5-6-1998 sent by the plaintiff to the defendant. In this reply, it was mentioned that the lease-deed does not contain any condition as 6D and, therefore, there is no question of violation of the said condition. It was stated in the reply that due to financial constraints, the construction could not be made on the entire area and that the plaintiff is regularly paying the lease rent. It was mentioned in the reply that the lessee is not bound to deposit maintenance charge as there is no stipulation to this effect in conditions No.2 and 4 of the lease. With regard to condition No.5, it was stated that the unit was earlier in operation and that condition No.5 does not stipulate that if subsequently the unit remains inoperative, there would beviolation, thus, violation of condition No.5 was denied. 11. Ex.P-4 is the order dated 15-7-1998/16-7-1998, by which the defendant conduded thatthe plaintiff is in arrears of Rs.11 ,311/- and has not raised construction as required in the lease and is also not in continuous production for a continuous period of more than six months, therefore, conditions No.2, 4, 5(1), 6 and 7 of the lease- deed have been violated and consequently the lease is cancelled. 12. Both the Courts below have found that the terms of the lease have been violated. The said finding is a pure finding of fact. The substantial question of law No.1 is not to the effect as to whether the finding that the plaintiff has committed breach of the conditions of the lease is perverse. Thus, while framing the substantial question "M yfls ••- of law No.1, this Court has treatgd thesaid finding as conclusive, however, the substantial question of law is about the fulfillment of the requirement of six months' notice as required under clause 16 of the lease-deed. 13. When the plaintiff has admittedly committed breach of the conditions of the lease by admitting in its reply that as against the requirement of construction of 31,800 Sq.Ft., it has not raised construction on the entire area due to financial constraints and that the deposit of Rs.11,311/- was made on 27-7-1998 vide Ex.P-5, whereas the lease was already cancelled on 16-7-1998, the question is whether the plaintiff has proper notice as required under clause 16 ofthe lease-deed. 14. Under clause 16 ofthe lease-deed, the lessor is obliged to call upon the lessee to remedy the breach within six months of the notice in writing. The notice Ex.P-2 was issued on 5-4-1998 and the cancellation of the lease-deed was made on 16-7-1998 (Ex.P-4). DW-1 Umesh Pandey is the General Manager of the respondent. He has stated in his examination-in-chief that on violation of the conditions of the lease, the plaintiff was issued a notice in the year 1983 and the plaintiff sought ,six months' time on 25-6-1983. The plaintiff was allowed six months' time on 5-7-1983, however, when the breach was not remedied, notiee was again issued and spot inspection was carried out. Another notice was issued to the plaintiff on 13-2-1992 and thereafter notice was issued on 5-5-1998. This notice dated 5-5-1998 mentioned in the statement of DW-1 Umesh nPandey is referred in the plaint as notice dated 5-4-1998. On 1 perusal of the original document, it appears that the notice is dated 5-5-1998. Thus, the statement made by the DW-1 is to the effect that several notices were issued to the plaintiff and he has failed to remedy the breach. In the cross-examination of this witness of the defendant, nothing has been put forth to him by the plaintiff that notices were never issued in the year 1983 or in the year 1992. There is no whisper in the cross-examination that the statement made by this witness in his examination-in-chief regarding issuance of notices in the years 1983 and 1992 are not correct. Thus, it is established by the statement of DW-1 that notices were issued to the plaintiff for the first time in 1983 and thereafter in 1992 and there is compliance ofclause 16 ofthe lease-deed. The substantial question of law No.1 is thus answered against the appellant and in favour of the respondent. 15. Learned counsel for the appellant has placed reliance on several judgments of the Hon'ble Supreme Court in Munshi Ram and others vs. Delhi Administration, MR 1968 SC 702, Stefe of U.P. and others vs. Maharaja Dharmander Prasad Singh etc., AIR 1989 SC 997, Bondar Singh and others vs. Mihal Singh and others, AIR 2003 SC 1905, M/s Timber KashmirPvt. Ltd. vs. The Conservafor of Forests, Jammu, AIR 1977 SC 151, Bhagwati Prasad vs. Chandramaul, AIR 1966 SC 735 and Ram Sarup Gupta (dead) by L.Rs. vs. Bishun Narain Inter College and others, AIR 1987 SC 1242 to argue ttiat forcible possession cannot be recovered from the appellant/plaintiff even after cancellation of the lease. Learned counsel would submit that the 10 respondent/defendant is obliged to take recourse to law to recover possession and that the plaintiff cannot be evicted forcefully. 16. To examine theabove contention, this Court has perused the statements made in the plaint. The only statement about the defendant's intention of recovering possession is made in paragraph 5 of the plaint. In this paragraph, it is mentioned that the defendant should be restrained from seeking recovery of possession otherwise the plaintiff shall suffer irreparable loss. It has not been mentioned in the plaint that the defendant is proceeding ahead to recover possession in a forcible manner without taking recourse to law. Thus, in the absence of averment in the plaint, the argument raised by the learned counsel for the appellant/plaintiff is not to be considered as the suit has not been submitted alleging forcible recovery of possession. The judgments rendered by the Hon'ble Supreme Court relied by learned counsel for the appellant have thus no application in the facts ofthe case. 17. The second substantial question of law is about the competency of the Managing Director to issue the letter of cancellation. Under clause 16 of the lease-deed, the cancellation is automatic on commission of breach of the terms of the lease by the lessee. It is mentioned in the clause 16 of the lease-deed that on commission of default this lease wil1 be deemed to have been terminated and the lessor shall have the right to re-enter the land and repossess the same as if this demise has not been made. The effect of this recital is that when the breach is established, it is not necessary for the lessor to issue a formal order, however, since in .-fl" VFSSS.':'- 11 the present case a formal order has been issued, it has given rise to the second substantial question of law. In the letter of cancellation (Ex. P-4), it is mentioned that by a notification issued by the Department of Law and Legislative Affairs, Government of Madhya Pradesh (now Government of Ghhattisgarh), on 6-10-1982, the power to take all action with regard to leases of land has been delegated/conferred to the Managing Director and the letter of cancellation is issued in exercise of the powers conferred on the Managing Director by the State Government. The plaintiff has not placed anything on record to contradict or repel the said statement made in the letter of cancellation. In fact, there is no plea in the plaint that the Managing Director was not competent to cancel the lease. In course of argument, learned counsel for the respondent has placed on record a copy of the notification dated 6-10-1982, which finds mention in Ex.P-4. Thus, it is held that the Managing Director of the respondent/defendant was competent to cancel the lease. The second substantial question of law is also decided against the appellant. 18. Consequently, the second appeal fails and is hereby dismissed. There shall be no order as to costs. 19. A decree be drawn up accordingly. Gopa! Sd//- Prashant Kumar Mishra Judge