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Vikas Kendra Private Ltd. v/s Shri Laxmi Oil Mills Company Ltd.

Company & Directors' Information:- N K OIL MILLS PVT LTD [Active] CIN = U15201GJ1994PTC022669

Company & Directors' Information:- B P OIL MILLS LIMITED [Active] CIN = U15142UP1965PLC003232

Company & Directors' Information:- K P L OIL MILLS PRIVATE LIMITED [Active] CIN = U15142KL1983PTC003685

Company & Directors' Information:- N K B OIL MILLS PRIVATE LIMITED [Active] CIN = U15142KL1999PTC013095

Company & Directors' Information:- K K K OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15142KL2000PTC013621

Company & Directors' Information:- LAXMI OIL COMPANY PVT. LTD. [Active] CIN = U23201WB1993PTC059878

Company & Directors' Information:- S N OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15142HR1986PTC025702

Company & Directors' Information:- G. B. OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15326HR1985PTC019817

Company & Directors' Information:- R. OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15141DL1992PTC047883

Company & Directors' Information:- VIKAS OIL PRIVATE LIMITED [Strike Off] CIN = U15326UP1989PTC011445

Company & Directors' Information:- J K OIL MILLS COMPANY LIMITED [Strike Off] CIN = U15143UP1955PLC002570

Company & Directors' Information:- LAXMI OIL MILLS PVT LTD [Active] CIN = U15142PY1978PTC000159

Company & Directors' Information:- N N OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15147MH1999PTC117989

Company & Directors' Information:- VIKAS KENDRA PRIVATE LIMITED [Active] CIN = U55200MH1968PTC014100

Company & Directors' Information:- J & T OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15141KL2006PTC019754

Company & Directors' Information:- A AND R OIL MILLS PVT LTD [Strike Off] CIN = U15315CH1994PTC014265

Company & Directors' Information:- SHRI OIL MILLS COMPANY LIMITED [Dissolved] CIN = U99999MH1946PTC005426


    Decided On, 26 September 2003

    At, In the High Court of Bombay at Nagpur


    Mrs. V.A. Naik, Advocate for the Appellant. Mr. C.A. Joshi, Adv. for the Respondent.

Judgment Text

Heard Mrs. Naik, the learned counsel for the Petitioner, and Shri Joshi, the learned counsel for the respondent.

2.These second appeals arise out of the same sort of claims made by the defendant against two judgments dated 23-12-1983 of the First Appellate Court decreeing the suits filed by the respondent.

3.The substantial question of law that arises for consideration is that the appellant was liable to pay Municipal taxes found in Clause 10 of lease deed. The respondent Laxmi Oil Mills executed a Rental Deed in favour of the appellant in respect of an open plot of land at Akola. The respondent agreed that the appellant would be entitled to make a construction thereon for carrying out a scheme of building, theatre, hotel or factory. The rent was stipulated under Clause 10 of the deed, provided as follows :

"The lessee shall be liable to bear the ground rent proportionately payable amounting to Rs.160/- per year, for the leased out plot and the lessee shall further be liable to pay other dues payable to local authorities or the State in respect of the premises."

4.The respondent Company was charged with property cess in respect of suit property. The respondent Company paid the property cess for the period from 1981 to 1984. In pursuance of the aforesaid Clause 10, the company demanded from the appellant the amount paid by it to the Municipal Corporation on account of the property cess, from the appellant. On refusal, the respondent filed two suits i.e Civil Suit No.588/ 1983 for the period 1981 to 1983 and Suit No.173/1984 for the period 1983 and 1984 respectively. The Trial Court dismissed the suit holding that the appellant was not liable to pay property cess since it was liable to pay only such dues in respect of "the premises". According to the Trial Court the word premises has been used differently from the words "leased out plot" in clause 10. The word "premises" refers to the plot after the construction is made thereon and not to the open plot. Thus, according to Trial Court since there was no construction on the plot, there were no premises and therefore, the appellant was not bound to pay property cess in respect of the open plot.

5. The Appellate Court, however, reversed the judgment of the Trial Court and decreed the respondent's suit. These second appeals have been admitted on the question of construction of Clauses 10.

6.Mrs. Naik, the learned Counsel for the appellant submitted that in Clause 10 itself, the land has been described as "leased out plot" and "premises" and therefore, they must be given different meaning. According to learned counsel, Clause 10, the appellant has agreed to bear only ground rent in respect of leased out plot. The dues other such as property cess were eligible only in respect of the premises. The appellant has agreed to be liable to pay other dues such as property cess only in respect of the premises, which have not yet come into existence since no construction has been admittedly carried out by the appellant. In other words, according to the learned counsel for the word "leased out plot" are intended to refer to the original piece of land leased out to the appellant and in respect of which the appellant has agreed to bear the ground rent and word 'premises" are intended to refer to the same plot of land, however, after it is built up or after construction thereon. Since no construction has been made, there are no premises as contemplated by Clause 10 and therefore, the agreement to pay other dues including the property cess cannot be enforced. This submission does not appear to be correct. There is no doubt that the land which was "leased out" has been referred to as "leased out plot" and "premises" in the same clause. However, merely because two words have been used for the same piece of land, it does not mean that it is intended to be used for the same piece of land in different conditions i.e. one without construction and the other clauses of the lease deed, where the word "premises" is used. Obviously, if the word "premises" is used to refer to the open piece of land, which is leased out when the argument on behalf of the appellant is not sustainable. Clause 6 reads as follows:

"That the lessee shall make arrangement for diversion of the H.T. line which is at present carried over the land in question. Further, the lessee shall make his own arrangement with the Maharashtra State Electricity Board for securing electric energy. Party No.1 has no objection to endorse its consent as owner of the premises, if so required under the rules."

7.In the same clause the piece of land is referred to as "land" in question and premises. Obviously, it is contemplated that the electric energy would be required even before the construction since it is well known that it is required for construction.

8.Clause 7 reads as follows :

"There is a well situate on the premises let out. The lessee is at liberty to make use of its water from free of charge. However, if electricity pump is utilised for lifting water, the lessee shall arrange at its costs for the same." Obviously the well is situated on the open piece of land and which has been referred to "premises let out".

9.Clause 8 reads as follows :

"That the lessee shall permit the lessor the use of the road shown by letters N, O in the map as existing. This right of user shall be available over the road, constructed by the lessee on its premises in place of the same or in substitution thereof. Part No.1 shall have a right to make use of this road for approach to the west through the leased out premises as indicated on the map."

Here, it is clear by the word "premises" refers to open piece of land which has leased out clearly right to make use of the road was in existence and construction made on the open piece of land.

10.It is, therefore, clear that word "premises" is not intended to refer to piece of land after construction since that word is used to refer to "piece of land" even in condition in which it was let out.

11.The learned lower appellate Court has relied on the word "premises" on page 80, 12th Edition by P.St.J. Langam Tripathi. The word "premises" has been dealt with as follows :

"'Premises' is another word the meaning of which is governed by the context in which it appears. Sometimes it bears its strict legal

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meaning of the subject matter of a lease and so covers any sort or property in respect of which lease was granted. At other times, it carries its popular meaning as buildings." 12.I, therefore, find that the word "premises" as used in clause 10 does not refer to the plot of land after construction thereon and therefore, the appellant was liable to pay Municipal Taxes thereunder. 13.The Trial Court has granted interest @ 18% per annum on the amount recoverable by the respondent from the plaintiff, I am of view that since admittedly, there is no agreement stipulating any interest. The interest awarded is excessive an therefore, hereby modified the interest and reduced it to @ Rs.6% per annum.