BENGAL CHEMICALS AND PHARMACEUTICALS LIMITED AND versus AJIT NAIN AND ANOTHER
[2019] 8 S.C.R. 1207, Supreme Court of India, 2019
Outcome: Disposed off
Segment: Facts
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BENGAL CHEMICALS AND PHARMACEUTICALS LIMITED
AND OTHERS
v.
AJIT NAIN AND ANOTHER
(Civil Appeal Nos. 5314-5315 of 2019)
JULY 09, 2019
[R. BANUMATHI AND A. S. BOPANNA, JJ.]
Public Premises (Eviction of Unauthorized Occupants) Act,
1971: ss. 2(e), 5(1), 7(2) and (2A) – Eviction of unauthorized
occupants – On facts, lease between the parties came to an end on
31.05.2014 by efflux of time – Terms proposed by appellant for
renewal of lease not agreeable to respondent No.1 – Respondent
No.1 enjoying the property for commercial purpose without payment
of rent since 01.06.2014 – Respondent No.1 declared an
unauthorized occupant by the Estate officer and order passed u/ss.
5(1), 7(2) and (2A) – Said order quashed by the High Court and
the matter remitted to the Estate Officer for consideration afresh –
On appeal, held: From 01.06.2014, respondent No.1 has not paid
the rent except the amount of Rs.25,00,000/- which he has deposited
in compliance with the order of the High Court – In the proceeding
before the Estate Officer, respondent No.1 has not put forth his
defence; he was only taking adjournments on the ground of
pendency of the appeal before the High Court – Sufficient
opportunity has to be given to respondent No.1 – Thus, the order of
the High Court remitting the matter to the Estate Officer is maintained,
however, subject to respondent No.1 paying the reasonable amount
as damages by way of interim measure for use and occupation of
the premises.
Disposing of
the appeals, the Court
HELD : 1.1 The lease came to an end on 31.05.2014 by
efflux of time. According to respondent No.1, the meeting was
held on 20.05.2014 in the office of appellant No.1 and there was
discussion on the question of renewal of lease. It is stated that
appellant No.1 has forwarded a letter on 30.05.2014 to respondent
No.1 for further renewal of lease subject to the acceptance of the
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terms, from June 20, 2014, the rent of the covered space as well
as the open space shall be at Rs.50/- per sq. ft. subject to increase
of 10% for every two years; and the tenure of the agreement will
be three years and thereafter, the agreement may be renewed
for further period upon mutual discussion between the parties.
The terms proposed by appellant No.1 in the said letter dated
30.05.2014 was not agreeable to respondent No.1. According to
respondent No.1, as per the terms of the lease, the rent payable
was only Rs.1,42,656/- per month. [Para 15] [1212-D-F]
1.2 From 01.06.2014, respondent No.1 has not paid the rent
except the amount of Rs.25,00,000/–  which he has deposited in
compliance with the order of the High Court dated 17.01.2018.
In the proceeding before the Estate Officer, respondent No.1
has not put forth his defence; respondent No.1 was only taking
adjournments on the ground of pendency of the appeal before
the High Court. Sufficient opportunity has to be given to
respondent No.1 and the order of the High Court remitting the
matter to the Estate Officer therefore, is maintained, however,
subject to respondent No.1 paying the reasonable amount as
damages by way of interim measure for use and occupation.
Respondent No.1 is in occupation of land and building measuring
6500 sq. ft. consisting of three storied building plus open space
of 2575.13 sq. ft. Without prejudice to the contentions of both
the
parties, respondent No.1 is directed to pay an amount of
Rs.2,50,000/- per month as damages for use and occupation from
June, 2014 till May, 2018. From June, 2018, respondent No.1
shall pay an amount of Rs.3,00,000/- per month as damages and
continue to pay the same till consideration and disposal of the
matter afresh by the Estate Officer. The arrears payable by
respondent No.1 (after deducting Rs.25,00,000/- already
deposited by respondent No.1 in the High Court) shall be paid to
appellant No.1 in three equal installments. [Para 16, 17]
[1213-A-E]
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 5314-
5315 of 2019.
From the Judgment and Order dated  10.12.2018 and 19.12.2018
of the High Court at Calcutta in M.A.T. No. 586 of 2018.
Sarad Kumar Singhania, Ms. Supriya R. Saha, Ms. Rashmi
Singhania, Advs. for the Appellants.
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Biswaroop Bhattacharya, Lokenath Chatterjee, Jaydeb Ghorai,
Jeetender Gupta, Advs. for the Respondents.
The Judgment of the Court was delivered by
R. BANUMATHI, J. 1. Leave granted.
2. These appeals arise out of the orders of the High Court of
Calcutta in MAT No.586 of 2018 dated 10.12.2018 and 19.12.2018 in
and by which the High Court has quashed the order dated 01.10.2018
passed by the Estate Officer under sub-section (1) of Section 5 and sub-
sections (2) & (2A) of Section 7 of the Act, 1971 in the application
bearing CAN 9489 of 2018 and remitted the matter to the concerned
Estate Officer for consideration of the matter afresh.
3. Brief facts which led to filing of these appeals are as follows:-
Appellant No.1 is the owner of a limited Company, Government
of India Enterprises known as Bengal Chemicals and Pharmaceuticals
Ltd. situated at No.168, Maniktala Main Road, PS Phoolbagan,
Kolkata – 700 054.  The property in question is a public premises
within the meaning of premises as contemplated under the provisions of
Section 2(e) of the Public Premises (Eviction of Unauthorized Occupants)
Act, 1971 (Act No.40 of 1971).
4. Respondent No.1 was a lessee under appellant No.1 in respect
of 6500 sq. ft., a three storied building along with an open space
measuring 2575.13 sq. ft. in the said premises at No.168, Maniktala
Main Road in terms of the lease agreement dated 21.08.1995 commencing
on and from 01.06.1993 at the initial lease rent of Rs.55,000/- per
month.
Respondent No.1 has been running a Montessori School in the said
building known as Harvard House and the entire schedule premises was
leased out to respondent No.1-Ajit Nain in terms of the aforesaid lease
agreement for 21 years.
5. As per terms of the lease dated 21.08.1995, it was specifically
laid down that the lease rent will be enhanced at the rate of 10% every
two years until expiry of the period of the lease.  The aforesaid period of
lease expired by efflux of time on 31.05.2014.  Before expiry of lease
period at the request of the respondent, a meeting was held on 20.5.2014
in the office of the appellant at Calcutta to consider the renewal of
lease.
6. In response to letter dated 28.05.2014 of respondent No.1,
appellant No.1 issued a letter dated 30.05.2014 proposing new terms
BENGAL CHEMICALS AND PHARMACEUTICALS LIMITED
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and conditions for the extension of lease period.  The communication
between the parties led to the earlier round of litigation in WP
No.28002(W) of 2017 before the High Court of Calcutta and the same
was dismissed vide order dated 22.11.2017 by the Single Judge.
7. Respondent No.1 challenged the order dated 22.11.2017 in MAT
No.2023 of 2017 before the High Court of Calcutta.  The Division
Bench disposed of the appeal by order dated 17.01.2018 with the direction
that Union of India will appoint other person as the Estate Officer in
place of the present Estate Officer and respondent No.1 to deposit
Rs.25,00,000/- towards damages with appellant No.1 within five weeks.
The court also directed respondent No.1 to pay the electricity charges.
In compliance of the order of the High Court, respondent No.1 has
deposited Rs.25,00,000/- and also arrears of electricity charges. In
pursuance of the order of the Division Bench dated 17.01.2018, Shri
Manotosh Bandhopadhaya, Assistant General Manager (QA) of appellant
No.1 was appointed as new Estate Officer vide Gazette Notification
No.58017/01/2018-PSU dated 09.03.2018 of Government of India.
8. The Estate Officer issued show cause notice to respondent
No.1 on 23.05.2018 in pursuance of clause (b)(ii) of sub-section (2) of
Section 4 of the Public Premises (Eviction of Unauthorized Occupants)
Act, 1971 calling upon him to appear before the Estate Officer and also
called upon
respondent No.1 to pay the damages with interest. The Estate
Officer granted number of hearings to respondent No.1 viz. 04.06.2018,
15.06.2018.
9. Being aggrieved, respondent No.1 challenged the notice dated
23.05.2018 and filed a second writ petition being WP No.7934(W) of
2018 before the High Court of Calcutta. The Single Judge of the High
Court vide order dated 19.06.2018 dismissed the writ petition by extending
the time to file the show cause to the notices.
10. Being aggrieved by the dismissal of the writ petition, respondent
No.1 filed an appeal in MAT No.586 of 2018.  No stay was granted by
the Division Bench in the said appeal nor any direction was issued by
the High Court not to proceed with the hearing of the eviction proceedings.
As there was no stay granted by the Division Bench in MAT No.586 of
2018, the Estate Officer proceeded with the eviction proceedings.  The
Estate Officer granted as much as five further hearings dated 29.06.2018,
17.07.2018, 27.07.2018, 07.08.2018 and 21.08.2018.  The Estate Officer
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vide order dated 01.10.2018 passed the eviction order directing respondent
No.1 to vacate the premises within a week from the date of the eviction
order.  By the said order dated 01.10.2018, the Estate Officer assessed
the damages and interest at Rs.4,61,63,624/- payable by respondent No.1
(Damages Rs.3,30,33,000/- plus interest at Rs.1,31,30,624/-).
11. Being aggrieved by the order of eviction, respondent No.1
filed an application being CAN No.9489 of 2018. The High Court vide
impugned order set aside the order dated 01.10.2018 passed by the Estate
Officer and remitted the matter to the Estate Officer to consider the
matter afresh in accordance with law.  Being aggrieved, appellant No.1-
Bengal Chemicals and Pharmaceuticals Limited has filed these appeals.
Respondent No.1 entered appearance and filed a detailed counter
affidavit.
12. We have heard Mr. Sarad Kumar Singhania, learned counsel
appearing for the appellants and Mr. Biswaroop Bhattacharya, learned
counsel appearing for respondent No.1.   We have perused the impugned
judgment and other materials on record and carefully considered the
matter.
13. The learned counsel appearing for the appellants has submitted
that respondent No.1 is running a school in the premises comprising of
6500 sq. ft. with open space measuring 2575.13 sq. ft. and respondent
No.1 is enjoying the property for commercial purpose of running the
school since 01.06.2014 without payment of any rent which is calculated
approximately Rs.4.61 crores as assessed by the Estate Officer which
is payable to appellant No.1.  It was submitted that since respondent
No.1 has not paid the rent, the Estate Officer rightly concluded that
respondent No.1 is an unauthorized occupant and passed the order under
Section 5(1) and sub-section (2) and (2A) of Section 7 of the Act.  It
was further urged that respondent No.1 has the right to file an appeal
against the order dated 01.10.2018 passed by the Estate Officer under
the provisions of Section 9 of the Act only before the Appellate Court
that is the District Judge of the district and the writ petition filed is not
maintainable.
14. The learned counsel appearing for respondent No.1 has
submitted that by taking judicial notice of the fact of involvement of the
previous Estate Officer in the eviction proceedings, the High Court has
rightly set aside the order of eviction dated 01.10.2018 passed by the
BENGAL CHEMICALS AND PHARMACEUTICALS LIMITED
v. AJIT NAIN [R. BANUMATHI, J.]
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Estate Officer.  It was submitted that no sufficient opportunity was
afforded to respondent No.1 and the quantum of damages fixed by the
Estate Officer is arbitrary and therefore, respondent No.1 is justified in
challenging the order of the Estate Officer before the High Court in the
pending appeal.  The learned counsel further submitted that a rent of
Rs.21/- per sq. ft. cannot all of a sudden become Rs.50/- per sq. ft.
without any rhyme or reason and respondent No.1 has always been
ready to pay a reasonable rent and not a rent which is unilaterally imposed
on him.  It was further submitted that in compliance with the order of the
High Court dated 17.01.2018, respondent No.1 has deposited
Rs.25,00,000/- and also paid the electricity charges which shows the
bona fide of respondent-tenant.
15. In the nature of the order which we propose to pass, we are
not inclined to go into the merits of the rival contentions of the parties.
Admittedly, the lease has come to an end on 31.05.2014 by efflux of
time.  According to respondent No.1, the meeting was held on 20.05.2014
in the office of appellant No.1 and there was discussion on the question
of renewal of lease.  It is stated that appellant No.1 has forwarded a
letter on 30.05.2014 to respondent No.1 for further renewal of lease
subject to the acceptance of the terms:- (i) from June 20, 2014, the rent
of the covered space as well as the open space shall be at Rs.50/- per
sq. ft. subject to increase of 10% for every two years; (ii) the tenure of
the agreement will be three years and thereafter, the agreement may be
renewed for further period upon mutual discussion between the parties.
The terms proposed by appellant No.1 in the said letter dated 30.05.2014
was not agreeable to respondent No.1.  According to respondent No.1,
as per the terms of the lease, the rent payable was only Rs.1,42,656/-
per month.
16. Be that as it may, admittedly, from 01.06.2014, respondent
No.1 has not paid the rent except the amount of Rs.25,00,000/- which
he has deposited in compliance with the order of the High Court dated
17.01.2018.  In the proceeding before the Estate Officer, respondent
No.1 has not put forth his defence; respondent No.1 was only taking
adjournments on the ground of pendency of the appeal before the High
Court in MAT No.586 of 2018.  In our view, sufficient opportunity has to
be given to respondent No.1 and the order of the High Court remitting
the matter to the Estate Officer therefore, has to be maintained, however,
subject to respondent No.1 paying the reasonable amount as damages
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by way of interim measure for use and occupation.  As pointed out
earlier, respondent No.1 is in occupation of land and building measuring
6500 sq. ft. consisting of three storied building plus open space of 2575.13
sq. ft. in Maniktala Main Road, Kolkata.  Without prejudice to the
contentions of both the parties, we direct respondent No.1 to pay an
amount of Rs.2,50,000/- per month as damages for use and occupation
from June, 2014 till May, 2018.  From June, 2018, respondent No.1 shall
pay an amount of Rs.3,00,000/- per month.
17. The order of the High Court dated 10.12.2018 corrected by
the order dated 19.12.2018 passed in MAT No.586 of 2018 remitting the
matter to the Estate Officer for consideration of the matter afresh in
accordance with law is affirmed.  These appeals are disposed of with
the following directions and observations:-
(i)
Respondent No.1 shall pay the amount of Rs.2,50,000/- per
month as damages for use and occupation of the premises
from June, 2014 till May, 2018.  From June, 2018, respondent
No.1 shall pay the amount of Rs.3,00,000/- per month as
damages and continue to pay the same till consideration and
disposal of the matter afresh by the Estate Officer;
(ii)
The arrears payable by respondent No.1 (after deducting
Rs.25,00,000/- already deposited by respondent No.1 in the
High Court) shall be paid to appellant No.1 in three equal
installments. The first installment is payable on or before
31st August, 2019.  The next two
installments are payable by
the end of October, 2019 and December, 2019 respectively;
(iii) The damages stated above is tentative.  The Estate Officer
after providing opportunity to both the parties shall determine
the appropriate quantum of damages and the payment
presently made shall remain adjustable either way, dependent
on the quantum to be decided;
(iv) After respondent No.1 deposits the entire arrears, the Estate
Officer shall take up the matter and afford sufficient
opportunity to both the parties and determine the quantum of
damages payable and pass appropriate orders in accordance
with law.
(v)
The appellant is permitted to withdraw the amount of
Rs.25,00,000/- (Rupees Twenty Five Lakhs Only) deposited
BENGAL CHEMICALS AND PHARMACEUTICALS LIMITED
v. AJIT NAIN [R. BANUMATHI, J.]
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by respondent No.1 forthwith. Appellant No.1 is also
permitted to withdraw the electricity charges deposited by
respondent No.1, if not already withdrawn.
(vi) On deposit of the first installment of arrears, appellant No.1
shall ensure supply of water if it has been disconnected as
alleged by respondent No.1.
(vii) On failure to deposit any one of the installments of arrears
or the damages payable for use and occupation for every
month, respondent No.1 shall forfeit the right of his defence
and consideration. In such an event, the Estate Officer shall
restore the proceedings and shall pass an order of eviction in
accordance with law. Respondent No.1 shall in such event
not be heard to make out any grievance relating to the eviction
order; and
(viii) Parties shall bear their respective costs.
Nidhi Jain
Appeals disposed of.