Case: Spun Casting &amp; Engg. Co. Pvt. Ltd Vs. Dwijendra Lal Sinha &amp; Ors(Dead)Thr.Lrs

One Hangeswar alias Narendra Nath Singha on 4th February, 1936 obtainedinterest for "A" Schedule property, i.e. premises no.77. Benaras Road, Howrah admeasuring 3 Bighas including a tank from Sear Sole Raj Estate. He raised certain constructions including sheds on "B" Schedule property, a part of "A" Schedule property and set up an iron casting foundry under the name and style of D.L. Singha and Company, which was run by him till his death. After his death on 31st May, 1954, his legal heirs, original respondent nos.1 and 2 settled the whole karbar (business) of iron casting foundry along with land and all fittings and fixtures in favour of one Kalipada Mondal and Bahar Bala Dassi on 27th July, 1954, for a period of five years starting with the month of Baisakha 1361 B.S. Bangabda Samvat (for short "B.S.") (Bangla year) to Chaitra 1365 B.S. at a monthly rent of Rs.466/3 annas. By successive transfers, interest of original lessees/settlees came to be acquired by the appellant on 18th January, 1956 (A.D.) Settlement in favour of the appellant came to an end by efflux of time in Chaitra 1365 B.S., equivalent to, 13th April, 1959. Appellant failed to vacate the "B" Schedule property as well as to pay the rent after 1363 B.S.3. Original plaintiff nos.1 and 2 instituted suit no.11/1959 against the appellant but the same was withdrawn due to some formal defects with liberty to file a fresh suit. After the withdrawal of said suit, appellant trespassed over "C" Schedule property, i.e. remaining "A" Schedule property consisting of a tank and its three banks. Appellant filled up the tank, raised certain structures thereon and extended its work over the said property.4. Plaintiff respondent nos.1 and 2, feeling aggrieved by the conduct of the appellant, instituted the present suit no.65/1965 for recovery of possession of "B" and "C" Schedule properties and for mesne profits. Appellant in the written statement, interalia denied the title of the plaintiffs to the suit property as well as existence of relationship of landlord and tenant between them. The allegation that the appellant had trespassed over "C" Schedule property was denied.5. Subordinate Court decreed the suit with respect to both "B" and "C" Schedule properties. It was held that "C" Schedule property was not let out to the appellant and the appellant had taken possession of the same by committing trespass.Appellant being aggrieved preferred Title Appeal no.52/1976 challenging the judgment and decree passed by the Subordinate Court in favour of theAppellate Court partly allowed the appeal, affirming the decision of the Subordinate Court that "C" Schedule property was not covered by the settlement dated 27th July, 1954 and was trespassed upon by the appellant.Feeling aggrieved by the findings of the Appellate Court with respect to the trespasser over "C" Schedule property, appellant preferred Second Appeal no.646/1977 and being aggrieved by the setting aside of the decree with respect to "B" Schedule property,filed cross objections in the High Court. High Court heard the second appeal and cross objections together and disposed them of by passing a common judgment.

Court's reasoning:
10. Finding recorded by the High Court with regard to the requirement of issuance of notice under Section 106 of the Transfer of Property Act and the maintainability of the suit by the respondents in their individual capacity after the dissolution of the partnership firm has not been challenged before us. These two findings are also affirmed.11. With regard to "B" Schedule property the High Court set aside the finding of the First Appellate Court on two counts. Firstly, that the appellant had committed a default in payment of the rent after 1363 B.S. and secondly, on the ground that what was let out to the appellant was not the premises within the meaning of Section 2(f) of the Act but the business housed in a building along with machinery which was not covered under the provision of the Act.12. Learned counsel for the appellant is right in submitting that the High Court has erred in holding that the appellant had committed a default in payment of the rent.in their plaint did not take the plea that the appellant had committed a default in the payment of the rent or seek his eviction on the ground of failure to pay the rent. No issue had been framed on this point. There is no material on the record to show that the appellant did not deposit the alleged arrears of rent as required by Section 17 (i) of the West Bengal Premises Tenancy Act, 1956, and as such a decree on the ground of default in payment of rent could not be passed. In the absence of any pleadings and evidence on record that the appellant had committed a default in the payment of rent, the High Court has erred in passing a decree for eviction on that ground.13. This Court in Uttam Chand vs. S.M. Lalwani, AIR 1965 SC 716  drawing a distinction between the lease of a building and the lease of a business held that what was protected under the Act was the lease of the building and not the lease of the business. The question before the Court was as to whether the lease created of Dal Mill building with fixed machinery in sound working condition was an "accommodation" within the meaning of Section 3A of the Madhya Pradesh Accommodation Control Act, 1955. For determining the nature of lease created the Court laid the rest of dominant intention of the parties while creating the lease which is to be gathered in each case by construing the terms of the lease deed. Construing the terms of the lease in the said case this Court came to the conclusion that the dominant intention of the parties was to create the lease of the business and not that of the building. It was held that since the lease created was of running the business, the same was not protected under the Act.In the present case according to thewhat was settled was the business of iron casting foundry along with building and the machinery therein and not the premises within the meaning of West Bengal Premises Tenancy Act, 1956. In order to determine the true character of the settlement, it would be necessary to refer to the deed itself and construe the terms thereof.16. The deed has not been described as the lease but as "an agreement for five years." In the first paragraph of the deed, the settlers recite how the first party having taken settlement of the land at premises no.77, Benaras Road along with a tank had set up an iron casting foundry valued approximately at Rs.It then goes on to recite that it is the said karkhana or in other words the business which is being settled with the second party i.e. the appellants on terms and conditions set out therein. Clause (i) of the terms provides that the second party is taking settlement of the business along with all its fixtures and appliances and the interest of the settles in the land on an annual rent of Rs.5,594.4 annas payable on a monthly instalment of Rs.466.3 annas.Under Clause (ii) the settlers undertake to pay the rent to the landlord as also to the municipality. Clause (iii) provides for forfeiture of the settlement forof rent for four consecutive months. Clause (iv) provides that on the expiry of the agreement the "fittings and fixtures of the said karbar (business) which the second party is now receiving from the first party (the second party) shall return the same on the expiry of the period of agreement. If there be any loss or damage to the same the same shall be made good by the second party." Clause (v) provides that if necessary, second party can bring in new fixtures and appliances with prior notice to the settlers and on the expiry of the agreement the second party shall be entitled to remove the fixtures and appliances brought by them. Clause (vi) provides that settlers will be entitled to carry on the business in their own firms name but they shall have to bear all the expenses for electricity and telephone. Clause (vii) provides that after the expiry of first term if the second party desires to carry on the said karkhana (business) the first party shall enter into a separate agreement for a stipulated period. Clause (ix) expressly excludes the tank and its three banks from the settlement so made.18. The High Court after referring to the above quoted terms of the settlement came to the conclusion that the dominant intention of the parties who entered into the settlement was to effect a settlement in respect of the business of iron casting factory. The structures and sheds formed a part of the settlement only because the foundry was set up therein. The parties had never intended to settle or grant lease of the structure and the sheds as such. The High Court concluded that what was let out to the appellant was the business of running a iron casting foundry along with the building and the machinery and not a premises constituting a "premises tenancy" within the meaning of Section 2 (f) of the West Bengal Premises Tenancy Act, 1956.Reading the terms of the settlement as aforesaid and construing the same we are of the view that the dominant intention of the settlers was to effect the settlement in respect of the karbar (business) of iron casting foundry set up by them along with machinery housed in a building. "Premises" in the Act are defined to mean a building or a part of a building which includes gardens, grounds andif any, appertaining to the building. It also include the furniture supplied or any fittings or fixtures in a building or a part of the building but would not include a room in a hotel or a lodging house. It does not include the lease of a business along with machinery in a building. The intention of the parties was not to settle or grant lease of the structures and sheds as such. Structures and sheds did not constitute the dominant part of the settlement in favour of the appellant. It is evident from the terms of the settlement that the dominant intention of the parties was to create a lease for running the business of an iron casting foundry. It cannot be said that the settlement was in respect of the premises constituting "premises tenancy" within the meaning of the Act. Tenancy was not being created of the premised to run a business it was to the contrary.21. In Naraj Studios (P) Ltd. Navrang Studios and another, AIR 1981 SC 537  though this Court took the same view but keeping in view the peculiar provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, it was held the principle laid down in the earlier two judgments would not be applicable to the case. Referring to the amended provisions of the said Act it was held that the tenancy created was of the premises within the meaning of Section 5(8) and 5 (8A) to which Part II of the Act has been made applicable by Section 6(1) notwithstanding the fact that the building was not let our as such. We do not agree with the learned counsel for the appellant that this Court in Natraj Studios (P) Ltd. (supra) had revised its earlier view. The provisions of West Bengal Premises Tenancy Act, 1956 are altogether different from the provisions of the Bombay Rents. Hotel and Lodging House Rates Control Act, 1947. The West Bengal Premises Tenancy Act, 1956 can have application only if what is settled by way of lease is a premises and in order to decide whether the settlement is such or not, we are governed by the well settled principle laid down byBench of this Court in Uttamchand vs. S.M. Lalwani, AIR 1965 SC 716  followed by a later Bench of four Honble Judges in Dwarka Prasad vs. Dwarka Das Saraf, AIR 1975 SC 1758 . In our view, what was settled in the present case was not the premises for carrying on a particular business but the businesses itself and therefore, it cannot come within the purview of West Bengal Premises Tenancy Act, 1956.