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M/s. United Engineering (Eastern) Corporation & Others v/s Kaustab Ghosh & Others


Company & Directors' Information:- EASTERN ENGINEERING COMPANY PRIVATE LIMITED [Active] CIN = U29299KA2001PTC029952

Company & Directors' Information:- UNITED ENGINEERING COMPANY PVT LTD [Active] CIN = U34201WB1985PTC038966

Company & Directors' Information:- G. GHOSH ENGINEERING COMPANY PVT. LTD. [Strike Off] CIN = U27109WB1991PTC053965

Company & Directors' Information:- THE EASTERN ENGINEERING PVT LTD [Strike Off] CIN = U74200WB1940PTC010078

Company & Directors' Information:- THE UNITED ENGINEERING CORPORATION PRIVATE LIMITED [Strike Off] CIN = U00349KA1946PTC000438

    SAT No. 539 of 2009 with C.A.N. No. 3384 of 2010

    Decided On, 21 July 2011

    At, High Court of Judicature at Calcutta

    By, THE HONOURABLE MR. JUSTICE TAPAN KUMAR DUTT

    For the Appellant: Ashok Banerjee, Sr. Advocate, Saikat Basu, A. Haldar, Miss. Soumya Samanta, Advocates. For the Respondents: Bidyut Kuamr Banerjee, Sr. Advocate, Sila Sarkar, Arnab Roy, Advocates.



Judgment Text

Tapan Kumar Dutt, J.

1. This Court has heard the learned Advocates for the respective parties in respect of the application for stay being CAN 3384 of 2010.

2. The present second appeal arises out of a suit for eviction. The plaintiffs/respondents have obtained a decree for eviction against the defendant/appellant/petitioner. The present second appeal has been filed by the defendant/appellant challenging a decree for eviction and the second appeal has been admitted for hearing. With regard to the application for stay there is an interim order that till the disposal of the application the respondents have been restrained from executing the decree impugned in this appeal. The application for stay came up for final hearing and the parties have filed their respective affidavits.

3. It appears from the certified copy of the decree that the "schedule of the suit tenancy" is the entire ground floor flat exclusive of Eastern garage and inclusive of mezzanine room on the garage, a servant's quarter and a lawn on backside all in the ground floor of premises No. 4/1, Orient Row, P.S. Beniapukur, Calcutta-17. In view of the pendency of the present appeal the appellant/petitioner has prayed for stay of execution case No. 2 of 2001 pending before the learned Civil Judge (Senior Division) Sealdah. The plaintiffs/opposite parties have filed an affidavit-in-opposition wherein they have stated that the property is situated in a prime location in Kolkata and the total area under occupation of the defendant/appellant is about 2200 square-feet the current rate of rent which would not be less than Rs. 30/- per square feet and the suit flat is capable of fetching Rs. 66,000/- per month at the present market rate and the plaintiffs/respondents are entitled to such occupation charges. The plaintiffs/respondents by way of supplementary affidavit has brought on record a valuation report in respect of the suit premises prepared by M/s. Talbot & Company. From the said valuation report it appears that the accommodation on the ground floor is three bed rooms, three toilets, living room, dining room, kitchen and verandah and the carpet area of such accommodation is 1900 square feet more or less. The area of the other portions, as indicated in the said report, are Garage- 174 square feet, Mezzanine room 338 square feet, Servant's room 77 square feet and Lawn 1800 square feet more or less. The report says that the building is in good state of repairs and the property is situated in a good residential area, over-looking Park Circus Maidan. It further appears that in the opinion of the said valuer the fair market rental value per month of the aforesaid property on the ground floor are as follows: as in November, 2000 Rs. 28,500/-, as in November, 2005 Rs. 40,500/- and as in June, 2010 Rs. 57,500/-. The appellant has in its affidavit-in-reply denied and disputed the report of the said M/s. Talbot & Company and has relied upon a letter dated 9th December, 2010 written by one Sri Grish Chopra wherefrom it appears that it has been stated that the rent for residential flats in and around Orient Row for approximately 2000 square feet would be maximum Rs. 25000/- per month and for commercial purposes it would be Rs. 30/- per square feet. It appears from the said letter the said Sri Chopra is not a valuer as such but he represents one M/s. Exclusive Real Estate Services. In the said letter Sri Chopra has also mentioned that a flat in 'Srijan Heritage' of 2000 square feet could fetch rent at the rate of Rs. 20000/- per month plus the amount required for maintenance. It appears that even though the appellant/petitioner has denied and disputed the Talbot & Company's valuation report it has not specifically denied the measurements contained in the said report and has also not placed on record the measurements in details of the suit property which according to the appellant/petitioner would be the correct measurements. Thus, the measurements of the ground floor in question as indicated by M/s. Talbot & Company can be taken into consideration.

4. The question that has arisen in the present application is what should be the condition to be imposed upon the appellant/petitioner for the purpose of extending the interim order of injunction till the disposal of the appeal. It appears that the contractual rent was Rs. 1300/- per month which was later enhanced to Rs. 1600/- per month.

5. The learned Advocate for the plaintiff/respondents has submitted that the appellant/petitioner should be directed to pay occupation charges at the rate of Rs. 66,000/- per month or at least at the rate of Rs. 57,500/- per month as indicated in the Talbot & Company's report. The learned Advocate for the appellant/petitioner has strongly opposed such claim of the plaintiffs/respondents.

6. The learned Advocate for the appellant/petitioner submitted that when the learned Lower Appellate Court had granted an interim order of stay no prayer was made on behalf of the plaintiffs/respondents for imposing any condition for stay. He also submitted that when an interim order of stay was passed by this Court while admitting the appeal no prayer for imposing any condition was made on behalf of the plaintiff/respondents. According to the said learned Counsel, the plaintiffs/respondents have waived their right to pray for imposition of any condition. Such argument of the learned Counsel for the appellant/petitioner cannot be accepted. When the interim order was granted by this Court directions for filing of the affidavits were given and it obviously implied that the plaintiffs/respondents could express their say in the matter through the said affidavit. The plaintiffs/respondents have filed their affidavit-in-opposition wherein they have stated that they are entitled to the occupation charges in respect of the suit flat at the present market rate. Even if they did not make a prayer for occupation charges at the market rate in the learned First Appellate Court, they are not estopped from making such prayer before the Second Appellate Court as the condition for grant of stay. Thus, the point of waiver of right raised on behalf of the appellant/petitioner is unacceptable.

7. The learned Counsel for the appellant/petitioner cited a decision reported at 1982(3) SCC 484 (Mool Chand Yadav & Another v. Raza Buland Sugar Company Limited, Rampur & Another) in support of his contention that during the pendency of the appeal the operation of the impugned judgment and decree having serious civil consequences must be suspended particularly when the appeal has been admitted. It is true that during the pendency of an appeal the operation of the order that might be challenged in such appeal may be required to be stayed particularly if the order that is challenged in the appeal has serious civil consequences but it does not mean that an order of stay of such impugned order has to be passed without imposing any condition. The Appellate Court is free to impose appropriate condition or conditions while granting an interim order of stay of operation of the order that might be under challenge before such Appellate Court.

8. The said learned Counsel cited another decision reported at AIR 1955 Madras 491( Batcha Saheb v. Nariman K. Irani & Another) and referred to Paragraph 15 of the said reports wherein it has been observed, inter alia, that a Court in granting a temporary injunction has undoubtedly powers to impose terms as a condition to the granting of the injunction but the imposition of such terms must be reasonable and such as not to make it impossible for the plaintiff to comply with the terms thereby virtually denying the relief which he would otherwise be ordinarily entitled to. There cannot be any dispute that a reasonable approach has to be made and if the party seeking injunction and/or stay fails to pass the test of reasonableness in so far as the imposition of terms are concerned or in other words such party fails to comply with reasonable terms then in that event such a party cannot be said to be entitled to any interim order of stay.

9. The learned Counsel for the appellant/petitioner has raised a question as to how one can ascertain the occupation charges in respect of the suit premises which can be described as reasonable. The answer to this question is simple. The rent which the suit property can fetch in the present market conditions can be said to be reasonable occupation charges which can be fixed for the suit property and this principle can be applied even in a case where the tenant has well-maintained the suit property.

10. The learned Counsel for the appellant/petitioner has submitted that the occupation charges can be fixed on the basis of fair rent and for such purpose this Court can send the matter to the Controller for ascertaining as to what should be the fair rent of the suit premises on the basis of the calculations to be made in terms of the provisions for fixation of fair rent in the West Bengal Premises Tenancy Act concerned. He has cited a decision reported at AIR 1980 Calcutta 108, (Sudhir Kr. Chakraborty v. Ashutosh Bhattacharya) wherein it was held that the statutory tenant does not enjoy the same position as that of a contractual tenant and after the determination of tenancy a statutory tenant cannot make an application under Section 8 of the West Bengal Premises Tenancy Act for determination of fair rent by the Controller. He cited a subsequent decision of this Court reported at 86 CWN 976, (Narendra Lal Dutta Banik v. Sarojendra Nath Ghosh) wherein it was held that a tenant whose tenancy has been determined by a notice to quit can apply for fixation of fair rent of the disputed premises. He cited another decision reported at AIR 1976 Supreme Court 2229, (Damadilal & Others v. Parashram & Others) and referred to Paragraph 12 of the said reports. It appears that in the said reports the Hon'ble Court was pleased to consider M.P. Accommodation Control Act and the Hon'ble Court was pleased to observe that the definition of a tenant in the said Act made a person continuing in possession after the determination of his tenancy a tenant unless a decree or order for eviction has been made against him. In the instant case, the appellant/petitioner has lost the case in both the learned Courts below and the eviction decree passed by the learned Trial Court in favour of the plaintiffs has stood affirmed by the learned Lower Appellate Court. The learned Counsel for the appellant/petitioner referred to a decision reported at AIR 1984 Calcutta 371 (Nishit Kumar Sikdar Gobinda Saraya v. Sunil Kumar Bose) and also to a decision reported at 88 CWN 971 (Nisit Kumar Sarkar v. Sunil Kumar Bose) in support of his contention that even after the determination of the contractual tenancy a statutory tenant can apply for fixation of fair rent. He also cited the decision reported at 55 CWN 509 (Satyanarayan Prosad Gooptu v. Diana Engineering Company) in support of his contention that once an appeal was preferred from an order, the order loses its finality and what was once res judicata again becomes res sub-judice. There is no dispute with regard to the principle that once an appeal is preferred against an order such order loses its finality and it becomes a matter under judicial inquiry but the question which is required to be decided in the instant application is as to what should be the terms to be imposed as a condition for extending the interim order of injunction till the disposal of the appeal.

11. In the instant case, the appellant/petitioner has suffered a decree for eviction in the learned Courts below and it is not merely a case of determination of the contractual tenancy. The judgments and decrees of the learned Courts below have not been upset as yet by this Court. The appeal has been admitted for hearing. The legal principle which is required to be taken into consideration for deciding the question which has been raised in the instant proceeding at present has been laid down in the decision reported at 2005(1) SCC 705, (Atma Ram Properties (P) Ltd. v. Federal Motors(P) Ltd.). In the said reports the Hon'ble Supreme Court was pleased to hold that mere preferring of the appeal does not operate as stay on the decree or order appealed against nor on the proceedings in the Court below and the Appellate Court has discretion to grant an order of stay or to refuse the same.

The Hon'ble Supreme Court was pleased to observe that experience shows that the principal consideration which prevails with the Appellate Court is that in spite of the appeal having been entertained for hearing by the Appellate Court, the appellant may not be deprived of the fruits of his success in the event of the appeal being allowed but this consideration is pitted and weighed against the other paramount consideration: why should a party having succeeded from the Court below be deprived of the fruits of the decree or order in his hands merely because the defeated party has chosen to invoke the jurisdiction of a superior forum. The Hon'ble Supreme Court was pleased to observe that the power to grant the stay is discretionary and flows from the jurisdiction conferred on an Appellate Court which is equitable in nature and to secure an order of stay merely by preferring an appeal is not a statutory right conferred on the appellant and an Appellate Court is not ordained to grant an order of stay merely because an appeal has been preferred and an application for an order of stay has been made. The Hon'ble Supreme Court was further pleased to observe by approving a decision of the Nagpur High Court (Paragraph 13 of the reports) that the Rent Control Order governing the relationship of landlord and tenant has no relevance for determining the question of what should be the measure of damages which a successful landlord should get from the tenant for being kept out of the possession and enjoyment of the property. It was further observed that after determination of the tenancy, the position of the tenant is akin to that of a trespasser and such tenant cannot claim that the measure of damages awardable to the landlord should be kept tagged to the rate of rent payable under the provisions of the Rent Control Order. In paragraph 6 of the said reports the Hon'ble Supreme Court was pleased to observe that a tenant having suffered a decree or order for eviction may continue his fight before the superior forum but, on the termination of the proceedings and the decree or order of eviction first passed having been maintained, the tenancy would stand terminated with effect from the date of the decree passed by the Lower Forum. In the case of premises governed by rent control legislation, the decree of eviction on being affirmed would be determinative of the date of termination of tenancy and the decree of affirmation passed by the superior forum at any subsequent stage or date, would not, by reference to the doctrine of merger have the effect of postponing the date of termination of tenancy. In Paragraph 18 of the said reports the Hon'ble Supreme Court was pleased to observe that while ordering stay the Appellate Court has to be alive to the fact that it is depriving the successful landlord of the fruits of the decree and is postponing the execution of the order for eviction and there is every justification for the Appellate Court to put the appellant on the terms and direct the appellant to compensate the landlord by payment of a reasonable amount which is not necessarily the same as the contractual rate of rent. The Hon'ble Supreme Court was further pleased to observe in agreement with another decision passed by the said Hon'ble Court (Paragraph 18 of the reports) that once a decree for possession has been passed and execution is delayed depriving the judgment-creditor of the fruits of the decree, it is necessary for the Court to pass appropriate orders so that reasonable mense profits which may be equivalent to the market rent is paid by a person who is holding over the property. The Hon'ble Supreme Court was pleased to observe that with effect from the date of passing of decree for eviction the tenant is liable to pay mense profits or compensation at the same rate at which the landlord would have been able to let out the premises, and earn rent if the tenant would vacate the premises and the landlord is not bound by the contractual rate of rent effective for the period preceding the date of the decree.

12. Thus, the concept of fair rent as indicated in the rent control legislation cannot be invoked while deciding the question as to what should be the terms on which a stay may be granted in a second appeal after the tenant has suffered an eviction decree in the learned Courts below. The concept of market rate of rent is applicable in such a case. The question as to what would be the reasonable amount of occupation charges which the tenant may be required to pay while enjoying stay in the suit premises during the pendency of the appeal should be answered by applying the concept of market rate of rent. The learned Senior Advocate for the respondents heavily relied upon the decision reported in Atma Ram Property's case (supra). He referred to the affidavit-in-opposition wherein it has been stated that the suit premises is capable of fetching a rent in the present market conditions at the rate of Rs. 66,000/- per month. The said learned Senior Advocate referred to Paragraph 10 of the affidavit-in-reply which deals with Paragraph 12 of the affidavit-in-opposition and submitted that even though a bald denial has been made with regard to the capability of the suit premises to fetch rent at the rate of Rs. 66,000/- per month in present market conditions yet the appellant/petitioner has not specifically stated as to what the suit premises can fetch by way of rent in the present market conditions. The said learned Senior Advocate has relied upon the valuation report of Talbot & Company as aforesaid. He also submitted that according to the petitioner's own annexure to their affidavit-in-reply a 2000 square feet flat for residential purpose can fetch Rs. 25000/- per month. The Talbot & Company's report has disclosed that the suit premises has a carpet area of 1900 square feet plus area of the other portions as shown in the said report. If a rough calculation is made on a conservative basis by taking an overall view of the situation the suit premises can easily fetch Rs. 40,000/- per month as rent. The Talbot & Company's report shows that the lawn itself (in the suit premises) is 1800 square feet more or less.

13. The learned Senior Advocate for the plaintiffs/respondents cited a decision reported at 2009(3) Cal LT 395 (Sri Pratul Saha & Ors. v. Sri Purnabrata Dutta) in support of his contention that the occupation charges should be fixed on the basis of the market rate of rent in the present day conditions. He cited another decision reported at 2009(9) SCC 772 (State of Maharashtra & Another v. Super Max International Private Limited & Others) in support of his contention that it is open to 14 the Appellate Court to stay the execution of the decree for eviction on proper terms, including a direction to pay monthly occupation charges at a rate higher than the contractual rate of rent. In the said reported case the contractual rate of rent was Rs. 5236.58 per month besides the water charges at the rate of Rs. 515.35. The Hon'ble High Court concerned stayed the execution of the eviction decree in its revisional jurisdiction subject to the condition that a tenant who had suffered a decree for eviction was required to deposit Rs. 540,000/- every month commencing from the date of the decree passed by the learned Trial Court. The Hon'ble Supreme Court was pleased not to interfere with the High Court's order and was also pleased to observe that the High Court had fixed the amount of Rs. 540000/- per month with reference to Stamp Duty Ready Reckner and its reasonableness cannot be doubted. The Hon'ble Supreme Court in the said reports also approved the decision in Atma Ram Property's case. The said learned Advocate cited another decision reported at 2006(11) SCC 498 (Achal Mishra(2) v. Rama Shanker Singh & Others). In the paragraph 6 of the said reports the Hon'ble Supreme Court was pleased to consider the said Atma Ram Property's case and observe that the occupants would be liable to pay the rent equivalent to mesne profits with effect from the date from which they are found to have ceased to be entitled to retain possession of the premises as tenants and for such period the landlord's entitlement cannot be pegged down to the standard rent. The learned Senior Advocate for the plaintiffs/respondents submitted that the concept of fair rent under the rent control legislation is not applicable once eviction decree is passed but the concept of mesne profits on the basis of the market rate of rent is applicable in such situations.

14. The learned Senior Advocate for the appellant/petitioner has submitted that no reliance can be placed on Talbot & Company's report as no prior notice was served upon the appellant/petitioner before the inspection of the suit premises was held by the said valuer. It appears that even though a general challenge has been made against the valuation report of Talbot & Company yet the appellant/petitioner has not specifically stated as to what according to it is the actual area of the suit premises. There is nothing to suggest that the area of the suit property as described by the said Talbot & Company's report is a faulty one, and the said report cannot be discarded as an hear say report as the learned Senior Advocate for the appellant/petitioner tried to contend. Reference was made by the said learned Senior Advocate to a decision reported at 2008(7) SCC 539 (Niyas Ahmad Khan v. Mahmood Rahmat Ullah Khan) in support of his contention that certain relevant considerations are required to be taken into account while fixing the occupation charges during the pendency of the appeal and he referred to Paragraphs 7 and 9 of the said reports. He submitted that this Court should not impose conditions which are ex-facie arbitrary and oppressive.

15. In the instant case, the plaintiffs/respondents have filed their affidavits and have also brought on record a copy of the valuation report submitted by M/s. Talbot & Company and it appears from the said report the said M/s. Talbot & Company is a chartered valuation surveyor. The question of fixing the occupation charges in an arbitrary or oppressive manner does not arise. It may be noted here that in Max International's case a three-judge bench of the Hon'ble Supreme Court had considered the decision rendered in Niyas Ahmad Khan's case. In view of the discussions made above and taking a modest view of the matter this Court finds that the occupation charges in respect of the suit premises, taking into consideration the present day market conditions, should be at least Rs. 40,000/- per month but since the appellant/petitioner would be liable to pay such occupation charges with effect from the date of the eviction decree passed by the learned Trial Court such occupation charges is being fixed at Rs. 30,000/- per month even though a much higher figure has been mentioned in the report of the Talbot &

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Company for the subsequent period of time. The learned Trial Court had passed the eviction decree on 28th November, 2000. Thus, the arrear occupation charges should be calculated for the period December, 2000 up to June, 2011. The application for stay is disposed of in the following manner: 1) The interim order that was granted by the Hon'ble Division Bench on 21.4.2010 shall continue unconditionally for a period till 31st August, 2011 and within such date the appellant/petitioner shall deposit the decreetal costs, if any, and also the first deposit of current occupation charges in respect of the month of July, 2011 and such deposit shall be made before the learned Executing Court concerned. Thereafter, the appellant/petitioner shall go on depositing the current occupation charges of the rate of Rs. 30000.00 per month before the learned Executing Court concerned month by month by the end of the month succeeding the month for which the occupation charges become due. 2) The arrear occupation charges for the period December, 2000 to June 2011 at the rate of Rs. 30,000/- per month shall be deposited by the appellant/petitioner before the learned Executing Court concerned by way of 12 equal monthly instalments and the first of such deposits shall be made by 31st August, 2011. The subsequent instalments shall be deposited by the appellant/petitioner by the end of the subsequent months till the entire arrear amount of occupation charges is liquidated. 3) The appellant/petitioner shall prepare the requisite number of paper books out of Court and file the same in the department concerned within four weeks from the date of receipt of notice of arrival of the Lower Courts records. 16. If the appellant/petitioner defaults in complying with any of the conditions mentioned above, the interim order shall stand vacated. In the event, the appellant/petitioner makes the deposits, as indicated above, the Plaintiffs/respondents shall be entitled to withdraw the amount equivalent to the contractual rate of rent. If the appellant/petitioner complies with all the conditions indicated above, the interim order will continue and if any title execution case is pending for execution of the impugned decree of eviction then in that event such title execution case shall remain stayed till the disposal of the appeal or until further order, whichever is earlier. The application is thus disposed of. Urgent certified Xerox copy of this order, if applied for, shall be given to the parties as early as possible upon compliance of all necessary formalities.
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