GULAB CHAND BHORA Vs PUNJAB NATIONAL BANK
Bench: H.L. GOKHALE,RANJAN GOGOI
Case number: C.A. No.-009677-009678 / 2011
Diary number: 14315 / 2008
Advocates: TATINI BASU Vs
MITTER & MITTER CO.
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NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 9677-9678 OF 2011
GULAB CHAND BHORA & ORS. ... APPELLANT (S)
VERSUS
PUNJAB NATIONAL BANK & ANR. ... RESPONDENT (S)
J U D G M E N T
RANJAN GOGOI, J.
1. Delay in filing the application for substitution is
condoned.
2. Application for substitution is allowed.
3. Aggrieved by the reversal of the decree passed in their
favour by the learned Trial Court and the dismissal of the
cross objection filed, the plaintiffs have filed the present
appeals.
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4. The appellants-plaintiffs are the owners of the premises
which were let out to the respondent-bank. The area of the
tenanted premises measures 7565 square feet located on
the ground, first and second floor of a building situated in
Ward No.13 of Kharagpur Town in the State of West Bengal.
The aforesaid tenancy was on the basis of an unregistered
agreement between the parties effective from 01.06.1978
for a period of 6 years with the option of continuance of the
tenancy for a further period of 5 years. The monthly rent
was agreed between the parties at Rs.2200/-. By mutual
agreement, the tenancy continued on expiry of the initial 5
years thereof until 30.06.1989. Thereafter, the appellants-
plaintiffs claimed enhanced rent at the rate of Rs.3/- per
square feet. It appears that the Senior Manager of the
defendant Bank and the plaintiffs arrived at a mutual
settlement for enhancement of the rent to Rs.2/- per square
feet. This was on 12.11.1990. However, the higher authority
in the Bank disowned the authority of the Senior Manager to
take such a decision. Thereafter, the regional building
committee of the bank in its meeting held on 05.07.1993
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also recommended renewal of the lease agreement at the
enhanced rent of Rs.2/- per square feet for a period of 5
years with effect from the date of expiry of the earlier
agreement i.e. 01.07.1989 and, thereafter, further
enhancement of rent at the rate of 45% for an additional
period of 5 years. The aforesaid recommendation of the
regional building committee was signed by the Manager
(GAD), Senior Manager as well as the Regional Manager of
the defendant-bank.
5. It appears that notwithstanding the above, the
defendant-bank continued to occupy the premises on
payment of rent at the old rate. This led the appellants to
institute Money Suit No.143 of 1994 claiming a decree of
Rs.9,46,892.50/- being the balance of the arrears of rent
calculated at the rate of Rs.2/- per square feet for the period
from 01.07.1989 to 30.06.1994 and, thereafter, for the
period from 01.07.1994 upto the end of the month of
November, 1994 (suit was filed on 23.11.1994) at the rate of
Rs.2.90/- per square feet. Along with the aforesaid amount,
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the appellants-plaintiffs had also prayed for grant of interest
at the rate of 12% per annum.
6. The claim in the suit was resisted by the defendant-
bank contending that there was no fresh agreement
between the parties on expiry of the earlier tenancy on
30.06.1989. According to the defendants, the demand for
enhanced rate raised by the appellants-plaintiffs; the
decision dated 12.11.1990 and the recommendations of the
regional building committee dated 05.07.1993 did not give
rise to any concluded agreement between the parties in
order to entitle the appellants-plaintiffs to the reliefs claimed
in the suit.
7. The learned Trial Court, after noticing the respective
stand of the parties; the evidence brought on record and
after specifically taking note of the stand taken before it on
behalf of the defendant-bank that the bank was ready to pay
the rent as per the recommendations dated 05.07.1993 of
the regional building committee, by its judgment dated
11.02.1999 thought it fit to decree the suit for enhanced rent
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at the rate of Rs.2/- per square feet for the period from
01.07.1989 to 30.06.1994 and further at the rate of Rs.2.90/-
from 01.07.1994 to 30.06.1999. However, for the reasons
assigned by the learned Trial Court, the claim of interest was
declined. It may be specifically noticed that the learned Trial
Court while decreeing the suit as aforesaid took into account
the recommendation of the regional building committee
which document was duly exhibited in the suit (Exbt.20).
8. Aggrieved by the decree of the learned Trial Court
dated 11.02.1999 the Bank filed an appeal before the High
Court. In the said appeal the appellants filed their cross-
objections as against the refusal of interest. The High Court
by its impugned judgment and decree dated 08.02.2008 and
28.01.2008 respectively set aside the decree passed by the
learned Trial Court leaving it open to the appellants-plaintiffs
to move the Rent Controller for fixation of fair rent for the
premises in question. Consequently, the cross-objection
filed by the appellants was dismissed. In doing so, the High
Court came to the conclusion that as there was no concluded
contract between the parties with regard to enhanced rent
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on expiry of the period of the lease, it is only the Rent
Controller under the Tenancy Act who could have
determined the fair rent of the premises. The High Court,
therefore, left it open to the appellants-plaintiffs to move to
the Rent Controller. Aggrieved by the aforesaid reversal of
the decree passed in their favour and the dismissal of the
cross-objection, the present appeals have been filed.
9. We have heard learned counsel for both the parties.
10. From the several documents exhibited in the suit by
the appellants-plaintiffs, it is clear that prior to the expiry of
the lease the appellants-plaintiffs had given notice(s) for
continuance of the tenancy at the enhanced rate(s) claimed
therein. The rent, as claimed, was on the basis of the rent
prevailing in the locality where the premises was located. Of
particular significance would be the minutes of the meeting
held between the Senior Manager of the bank and the
appellants-plaintiffs on 12.11.1990 wherein the rent of
premises was agreed at the rate of Rs.2/- per square feet
with effect from 01.07.1989. Though the Bank appears to
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have denied the authority of the Senior Manager to sign the
said minutes, as already noticed, the regional building
committee of the Bank in its meeting held on 05.07.1993
had, once again, favoured renewal of the tenancy at the rate
of Rs.2/- per square feet for the initial period of 5 years and
thereafter at an enhanced rate of 45% for an additional
period of 5 years. The aforesaid admitted documents proved
in the course of trial of suit were relied upon by the learned
Trial Court to come to the finding that the appellants-
plaintiffs were entitled to enhanced rent in terms of the
recommendation of the regional building committee dated
05.07.1993. Accordingly, the suit was decreed, however,
without any interest.
11. The demand raised by the appellants-plaintiffs for
enhanced rent and acceptance thereof by the bank
authorities as evident from the documents dated 12.11.1990
and 05.07.1993, in our considered view, reflects a clear
understanding between the parties that the tenancy
agreement would continue at an enhanced rent of Rs.2/- per
square feet for the period from 01.07.1989 to 30.06.1994
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and thereafter at further enhanced rent of 45% for the next
5 years. Abundant materials had been brought on record by
the appellants-plaintiffs to show that the claim for enhanced
rent for the premises and the understanding reached was in
tune with or even less than the prevailing market rate of rent
in respect of similar premises. If the above is the basis on
which the Trial Court had thought it fit to decree the suit of
the appellants-plaintiffs we do not see how the High Court
can be found to be justified in reversing the said decree and
requiring the appellants-plaintiffs to move the Rent
Controller for fixing the fair rent of the premises. The
exercise directed by the High Court was, therefore, wholly
unnecessary besides being inequitable and litigious. It
should have been best avoided. We, therefore, consider it
proper to set aside the judgment dated 08.02.2008 and the
decree dated 28.01.2008 passed by the High Court of
Calcutta and restore the decree dated 11.02.1999 of the
learned Trial Court. The appellants-plaintiffs would now be
entitled to the amount decreed by the learned Trial Court
and also rent at the enhanced rate of Rs.2.90/- with effect
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from 01.07.1999 till the present date and until mutually
altered. In so far as the claim of interest is concerned, in the
peculiar facts of the case, we decline the same.
12. Before parting, we would like to observe that during the
course of hearing of the appeals it became known that the
bank has no further need to retain the second floor of the
tenanted premises in view of certain subsequent facts and
events that have occurred during the pendency of present
appeals. In the above situation we do not consider it
necessary to require the appellants-plaintiffs to approach the
court, once again, to recover possession of the second floor
of the tenanted premises which the bank admittedly is ready
and willing to surrender. We, therefore, direct the
respondent-bank to act accordingly in so far as the second
floor of the tenanted premises is concerned within a period
of three months from the date of receipt of this order.
13. With the above observations, both the appeals shall
stand disposed of in the manner indicated above.
…………..………………………J.
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[H.L. GOKHALE]
…………..………………………J. [RANJAN GOGOI] NEW DELHI NOVEMBER 11, 2013.
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