APOLLO ZIPPER INDIA LIMITED Vs W. NEWMAN AND CO. LTD.
Bench: HON'BLE MR. JUSTICE R.K. AGRAWAL, HON'BLE MR. JUSTICE ABHAY MANOHAR SAPRE
Judgment by: HON'BLE MR. JUSTICE ABHAY MANOHAR SAPRE
Case number: C.A. No.-004249-004249 / 2018
Diary number: 29117 / 2017
Advocates: TAMALI WAD Vs
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1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.4249 OF 2018 (Arising out of S.L.P.(c) No. 27775 of 2017)
Apollo Zipper India Limited ….Appellant(s)
VERSUS
W. Newman And Co. Ltd. ….Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. Leave granted.
2. This appeal is directed against the final
judgment and decree dated 13.06.2017 passed by
the High Court at Calcutta in APD No. 510 of 2015
whereby the Division Bench of the High Court
allowed the appeal filed by the respondent herein
2
and set aside the order dated 14.10.2015 passed by
the Single Judge of the High Court and granted
unconditional leave to the respondent to defend the
suit and remanded the suit for its trial on merits.
3. The short issue involved in this appeal relates
to grant of leave to the respondent (defendant) to
defend the summary eviction suit filed by the
appellant against them in relation to the suit
premises.
4. In order to appreciate the issue involved, it is
necessary to set out the background facts which led
to filing of the summary eviction suit leading to
passing of the impugned order.
5. The background facts of the case are as
follows:
6. The appellant is the plaintiff whereas the
respondent is the defendant in a summary suit out
of which this appeal arises.
3
7. There is a Hotel in the city of Kolkata called
“Great Eastern Hotel” (hereinafter referred to as
“GEH”). It is situated in Old Court House Street
(Hemanta Basu Sarani), Kolkata. The Hotel has
been in existence for the last more than a century.
It is a heritage Hotel. The Hotel building has several
floors and consists of several shops, business
premises including the Hotel. The building and the
Hotel was owned and run by the Company called
“Great Eastern Hotel Limited” (hereinafter referred
to as “GEHL” ).
8. The shops and business premises in the Hotel
building are mostly on the ground floor and were let
out by GEHL to different persons as their tenants.
One such business premises (No.18) measuring
around 6000 sq. feet, which is the subject matter of
this appeal (hereinafter referred to as the “suit
4
premises”), was let out by GEHL, a century back, to
the respondent for non-residential purpose. The
monthly rent of the suit premises at the relevant
time was Rs.40,000/-.
9. In the year 1975, the State of West Bengal
passed an Act called “The Great Eastern Hotel
(Taking Over of Management) Act, 1975 (Act XXXII
of 1975)” (hereinafter referred to as “the Act 1975”).
The Act 1975 was passed to provide for taking over
of the management of the undertaking of the GEHL
as defined under Section 2(d) for a limited period of
five years in public interest and also to secure its
proper management. Pursuant thereto, the State
Government took over the management of the
undertaking of the GEHL.
10. The Act of 1975 was followed by another Act
passed by the State of West Bengal on the expiry of
five years in 1980 called “The Great Eastern Hotel
5
(Acquisition of Undertaking) Act, 1980 (Act No XXVII
of 1980)” (hereinafter referred to as “the Act 1980”).
The Act 1980 was passed for the acquisition of the
undertaking of the GEHL.
11. On 18.06.1981, the State Government issued a
notification under Section 3(1) of the Act 1980
whereby the undertaking of GEHL stood transferred
to and vested absolutely in the State Government
with effect from 17.07.1980.
12. The Governor issued a notification under
Section 3 (2) of the Act 1980 for better and efficient
management and administration of the GEH, and
directed therein that the undertaking of the GEHL
shall stand transferred to and vest in the Great
Eastern Hotel Authority (for short, “GEHA”)
constituted under Section 5 (1) of the Act 1980.
13. Consequent upon enacting of the Act 1980 and
issuance of the aforementioned notification under
6
the Act of 1980, the State Government (GEHA)
became the owner of the GEHL (which included the
land, Hotel building, assets and the management of
GEHL) by operation of law.
14. As a consequence thereof, the respondent, who
was originally the tenant of GEHL, became the
tenant of the State Government, i.e., GEHA on the
same terms and conditions with effect from
17.07.1980. The respondent too accepted this
transfer of ownership of the suit premises and
accordingly started paying monthly rent of
Rs.40,000/- to GEHA which they paid till 2005.
15. On 05.10.2005, the Governor issued another
notification under Section 3(2) of the Act 1980 and
directed therein that all the fixed and current assets
of the GEHA be vested in the Company called
"Apollo Zipper India Limited" (appellant herein).
7
16. As a result of issuance of this notification, all
the assets (fixed and current) of GEHA stood vested
in the appellant-Company with effect from
05.10.2005. This is how the appellant became the
absolute owner of GEHA including the suit premises
let out to the respondent.
17. By letter dated 24.02.2006, GEHA informed
the respondent about the transfer of their entire
assets to the appellant with effect from 05.10.2005
followed by another letter dated 28.04.2006 of the
Advocates of GEHA sent to the respondent
informing them about the transfer of ownership and
assets of GEHA to the appellant with effect from
05.10.2005 including transfer of the suit premises
to the appellant.
18. On 17.05.2012, the appellant sent a quit
notice to the respondent under Section 106 of the
Transfer of Property Act, 1882(hereinafter referred
8
to as “the TP Act”) and terminated the respondent's
tenancy with effect from 03.06.2012 and demanded
arrears of rent and vacant possession of the
tenanted premises from the respondent. On receipt
of the quit notice, the respondent did not reply to it.
(See page180 of SLP- order of the Single Judge).
19. This led to filing of the summary suit being
Civil Suit No.201/2012 by the appellant against the
respondent on the original side of the High Court at
Calcutta claiming therein arrears of rent
(Rs.39,20,000/-), the vacant possession of the suit
premises and mesne profits at the rate of
Rs.40,000/- per day.
20. The suit was filed under Chapter XIII- A (Rule
1-B) of the Rules of the High Court at Calcutta
(original side), 1914 (for short, “The Rules”). The
appellant filed evidence by way of affidavit in
support of their case. The respondent on being
9
served of the summons of the suit also filed affidavit
opposing the suit of the appellant.
21. It may be mentioned here that the appellant
filed another Civil Suit No.53/2007 against the
respondent in the High Court at Calcutta for
permanent injunction restraining them from
carrying out any changes in the nature and
character of the suit premises and from transferring
and alienating the suit premises to any third party.
22. Similarly, the respondent also filed one suit
(Title Suit No.1183/2012) in the City Civil Court at
Calcutta against the appellant for a declaration that
the quit notice dated 17.05.2012 sent by the
appellant to the respondent under Section 106 of
the TP Act is void, that the respondent is a monthly
tenant of the suit premises, and also prayed for
issuance of mandatory injunction against the
appellant, who was made defendant No.1 in the said
10
suit, and Bharat Hotels Ltd., GEHA and the State of
West Bengal as defendant Nos. 2, 3 and 4
respectively, directing them to accept the monthly
rent from the respondent(plaintiff) at the rate of
Rs.1600/- in respect of the tenanted premises. This
suit is pending.
23. The respondent also filed Writ Petition
No.569/2004 in the High Court at Calcutta
challenging therein the rate of monthly rent of the
suit premises.
24. Coming now to the facts of the summary suit
filed by the appellant (C.S. No.201 of 2012) out of
which this appeal arises, the appellant (plaintiff)
claimed that they are entitled to a decree for
eviction against the respondent from the suit
premises and also a decree for arrears of rent and
mesne profits under Rule 6 of the Rules because the
respondent has failed to raise any arguable and
11
substantial defense on merits in support of their
case in answer to the appellant's summary suit.
25. The respondent, however, raised essentially
three grounds to oppose the appellant's suit by way
of defense and sought leave to defend the suit on
the said grounds.
26. First, the suit, as filed by the appellant by
taking recourse to the provisions of the TP Act, is
not maintainable. According to the respondent, the
suit should have been filed under the West Bengal
Premises Tenancy Act, 1997 (for short, “the
Tenancy Act”) because the monthly rent of the suit
premises is less than the limit prescribed under
Section 3(f) of the Tenancy Act (monthly rent is
Rs.1600/- whereas the limit prescribed is
Rs.10,000/-.)
27. Second, the respondent has not attorned to
the appellant inasmuch as it is also not clear as to
12
who is the owner of the suit premises, viz., the
appellant-Company or Bharat Hotels limited and,
therefore, the appellant is required to prove their
title over the suit premises. It is more so for want of
any attornment made by the respondent of the
appellant's ownership and the tenancy in question.
This, according to the respondent, needs an
elaborate trial in the suit.
28. Third, the monthly rent of the suit premises is
Rs.1600/- whereas the respondent is paying
Rs.38,400/- towards maintenance charges to the
landlord. It was contended that since there is a
dispute as to whether the monthly rent is
Rs.40,000/- or Rs.1600/-, the same also needs an
elaborate trial on merits in the suit.
29. The Single Judge, by order dated 14.10.2015,
declined to grant leave to defend to the respondent
and decreed the appellant's suit by passing an
13
eviction decree against the respondent in relation to
the suit premises. The Single Judge held that none
of the grounds raised by the respondent to seek
leave to defend the suit are prima facie arguable and
nor have any merit and nor these grounds
constitute any substantial defense, which may
require an elaborate trial on such grounds and,
therefore, no case is made out to grant any leave to
defend the suit to the respondent.
30. In other words, the Single Judge held, that the
summary suit is maintainable under the provisions
of the TP Act, that the monthly rent of the suit
premises is Rs.40,000/-, that the respondent has
attorned to the appellant, that the appellant has
prima facie proved their title over the suit premises,
that the provisions of the Tenancy Act has no
application because the monthly rent of the suit
premises is above the prescribed limit of
14
Rs.10,000/- and lastly, to record these findings, no
elaborate trial in the suit is required inasmuch as
such findings can be recorded on the basis of the
documents filed by the parties.
31. The respondent felt aggrieved and filed appeal
before the Division Bench of the High Court. By
impugned judgment, the Division Bench allowed the
respondent's appeal, set aside the order of the
Single Judge and granted unconditional leave to
defend the suit to the respondent and remanded the
suit for its trial on merits.
32. The Division Bench was of the view that there
is some dispute regarding the title over the suit
premises as to who is the owner of the suit
premises, namely, whether the appellant-Company
or the other Company,i.e., M/s Bharat Hotels Ltd.
33. In other words, the Division Bench held that
the question of title over the suit premises needs to
15
be gone into detail in the suit with a view to find out
as to who is the actual owner of the suit premises
and hence an arguable case in defense has been
made out by the respondent while seeking leave to
defend the summary suit.
34. The plaintiff (appellant) felt aggrieved and filed
this appeal by way of special leave against the
judgment of the Division Bench in this Court.
35. Heard Mr. Mukul Rohtagi and Mr. Ranjeet
Kumar, learned senior counsel for the appellant and
Mr. Jaideep Gupta, learned senior counsel for the
respondent.
36. Mr. Mukul Rohatgi, learned senior counsel for
the appellant (plaintiff) while assailing the legality
and correctness of the impugned judgment, mainly
reiterated the same submissions, which were urged
by the appellant before the two Courts below in
support of their case.
16
37. In substance, his submission was that the
reasoning and the conclusion arrived at by the
Single Judge is just, proper and legal and hence the
order of the Single Judge deserves to be restored by
setting aside the impugned judgment.
38. Learned counsel urged that none of the three
grounds raised by the respondent for grant of leave
to defend the suit were either arguable or had any
prima facie merit therein. In other words, the
submission was that all the three grounds were
raised for the sake of raising having no arguable
and substantial defense whether on facts or in law
and, therefore, Single Judge was justified in
declining to grant leave to defend the suit to the
respondent and was justified in passing decree for
eviction against the respondent.
39. On merits, learned counsel pointed out with
reference to each ground that the documents on
17
record would prima facie show that firstly, the
monthly rent was Rs.40,000/-, Secondly, the
appellant was the owner of the suit premises,
thirdly, the respondent had duly attorned to the
appellant and fourthly, the suit was rightly filed by
invoking the provisions of the TP Act because the
provisions of the Tenancy Act had no application to
the suit premises due to monthly rent of the suit
premises exceeding the limit specified under Section
3 (f) of the Tenancy Act.
40. In reply, Mr. Jaideep Gupta, learned senior
counsel for the respondent supported the impugned
judgment and contended that no case is made out
to interfere in the impugned judgment. Learned
counsel then elaborated his submission in support
of the impugned judgment and prayed for dismissal
of the appeal.
18
41. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to allow the appeal, set aside the
impugned judgment and restore the order of the
Single Judge.
42. In our considered opinion, the reasoning and
the conclusion arrived at by the Single Judge while
declining to grant leave to defend the suit to the
respondent and decreeing the appellant's suit for
eviction deserves to be restored as against the
impugned judgment passed by the Division Bench.
43. In other words, we are of the considered
opinion that the grounds, which were pressed in
service by the respondent, to seek leave to defend
the suit are neither arguable nor have any prima
facie merit therein and, therefore, there does not
arise any need to have any trial in the suit on merits
19
on such grounds. This we say for the following
reasons.
44. The first question that arises for consideration
in this appeal is whether the respondent attorned to
the appellant or whether the appellant is required to
prove their title over the suit premises or whether
there exists any doubt or confusion over the issue of
title of the suit premises so as to grant leave to
defend to the respondent to probe these questions
elaborately on merits in the summary suit filed by
the appellant against the respondent for eviction.
45. It is a settled principle of law laid down by
this Court that in an eviction suit filed by the
landlord against the tenant under the Rent Laws,
when the issue of title over the tenanted premises is
raised, the landlord is not expected to prove his title
like what he is required to prove in a title suit.
20
46. In other words, the burden of proving the
ownership in an eviction suit is not the same like a
title suit. (See Sheela & Ors. vs. Firm Prahlad Rai
Prem Prakash, 2002 (3) SCC 375, Para 10 at page
383 and also Boorugu Mahadev & Sons & Anr. vs.
Sirigiri Narasing Rao & Ors. 2016 (3) SCC 343,
Para 18 at page 349 ).
47. Similarly, the law relating to derivative title to
the landlord and when the tenant challenges it
during subsistence of his tenancy in relation to the
demised property is also fairly well settled. Though
by virtue of Section 116 of the Evidence Act, the
tenant is estopped from challenging the title of his
landlord, yet the tenant is entitled to challenge the
derivative title of an assignee of the original landlord
of the demised property in an action brought by the
assignee against the tenant for his eviction under
the Rent laws. However, this right of a tenant is
21
subject to one caveat that the tenant has not
attorned to the assignee. If the tenant pays rent to
the assignee or otherwise accepts the assignee's title
over the demised property, then it results in
creation of the attornment which, in turn, deprives
the tenant to challenge the derivative title of the
landlord. [See Bismillah De (dead) by Legal
Representatives vs. Majeed Shah. 2017 (2) SCC
274 Para 24]
48. It is equally well-settled law with regard to
attornment that it does not create any new tenancy
but once the factum of attornment is proved then by
virtue of such attornment, the old tenancy
continues. (See Uppalapati Veera Venkata
Satyanarayanaraju & Anr. Vs. Josyula
Hanumayamma & Anr. AIR 1967 SC 174 ).
49. In the case at hand, we find that it is not in
dispute that the original owner of the suit premises
22
was GEHL, who had created the original contract of
tenancy with the respondent in relation to the suit
premises.
50. It is also not in dispute that the GEHL was
then acquired by the State by Act of 1975 and the
Act of 1980, as a consequence thereof, the suit
premises stood vested in an authority called the
GEHA by operation of law as per Section 3 read with
Section 5 of the Act 1980 with effect from
17.07.1980 and 22.06.1981.
51. It is also not in dispute that the respondent
accepted this change of ownership and accordingly
started paying monthly rent to the GEHA from 1980
as monthly tenant of the GEHA and which they paid
till 2005.
52. It is also not in dispute that in terms of the
notification issued by the Governor on 05.10.2005
under Section 3(2) of the Act of 1980, the suit
23
premises then stood transferred and vested in the
appellant-Company (see notification dated
05.10.2005) by operation of law and the appellant
accordingly became the owner of the suit premises
with effect from 05.10.2005.
53. It is further not in dispute that the GEHA and
their lawyer, vide letters dated 24.02.2006 and
28.04.2006, informed the respondent about the
change of ownership of the suit premises and the
appellant acquiring the ownership of the suit
premises vide notification dated 05.10.2005.
54. In our considered opinion, the aforementioned
undisputed facts, which are matter of record, are
sufficient to hold in the eviction suit that the
appellant became the owner of the suit premises
with effect from 05.10.2005.
55. In our considered view, the respondent also
attorned to the appellant and accepted the
24
ownership of the appellant over the suit premises,
which is prima facie proved by the three facts and
circumstances as set out below.
56. First, when the appellant sent a quit notice
dated 17.05.2012 to the respondent under Section
106 of the TP Act determining the tenancy and
calling upon the respondent to pay the arrears of
rent and vacate the suit premises, despite receipt of
the quit notice, they did not reply to it.
57. In our view, the respondent ought to have
replied to the notice at the first available
opportunity, which they failed to do so. It amounts
to waiver on their part to challenge the invalidity or
infirmity of the quit notice including the ownership
issue raised therein.
58. In the case of Parwati Bai vs. Radhika, AIR
2003 SC 3995, the question arose as to whether the
tenancy was terminated in accordance with the
25
provisions of Section 106 of the TP Act. The
defendant despite receiving the notice from the
plaintiff did not reply to it.
59. This Court held that if the defendant does not
raise any objection to the validity of quit notice at
the first available opportunity, the objection will be
deemed to have been waived. The following Para 6 of
the decision is apposite which reads as under:
“6. The singular question to be examined in the present case is whether the tenancy was terminated in accordance with the provisions of Section 106 of the Transfer of Property Act. The receipt of notice by the defendant is admitted in the written statement. The defendant has not raised any specific objection as to the validity of the notice. An objection as to invalidity or infirmity of notice under Section 106 of the TP Act should be raised specifically and at the earliest; else it will be deemed to have been waived even if there exists one. It cannot, therefore, be said that the notice in the present case suffered from any infirmity. A copy of the notice was exhibited and proved by the plaintiff as Ext. P-4.”
26
60. Second, the respondent by letters dated
13.06.2006, 27.06.2006, 05.07.2006 and
11.07.2006, sent to the appellant on the question of
ownership of the suit premises and payment of rent
had expressed their willingness to attorn and
continue the tenancy with the appellant and also
offered to pay rent to the appellant. (See pages 198
& 199 of the SLP Paper Book-order of the Single
Judge)
61. Third, the respondent in their civil suit
(No.1183 of 2012) filed against the appellant in
Paras 15, 17, 18 and relief clause (e) of the plaint
admitted the ownership of the appellant over the
suit premises and went to the extent of seeking the
mandatory injunction against the appellant
directing them to accept the monthly rent of the suit
premises from the respondent.
27
62. In other words, reading of the aforementioned
paras in the respondent’s plaint including the relief
clause (e) would go to show that the respondent was
all along willing to accept and indeed actually
accepted the ownership of the appellant over the
suit premises and, therefore, sought mandatory
injunction against the appellant to accept them as
tenant. The conduct of the respondent, therefore,
disentitles them to now raise a new plea questioning
the title of the appellant over the suit premises and
a plea of attornment. Both, in our opinion, are
wholly misconceived pleas and, therefore, deserve to
be rejected.
63. As mentioned above, the title of the landlord
over the tenanted premises in a suit for eviction
cannot be examined like a title suit. Similarly, the
attornment can be proved by several circumstances
28
including taking into consideration the conduct of
the tenant qua landlord.
64. The aforesaid three circumstances, in our
opinion, are, therefore, more than sufficient to
record a finding that the appellant was prima facie
able to prove their title over the suit premises so
also was able to prove the factum of “attornment”
made by the respondent in relation to the suit
premises in appellant’s favour thereby entitling the
appellant to determine the contractual tenancy
which was devolved upon them by operation of law.
65. In the light of the foregoing discussion, we are
unable to agree with the view taken by the Division
Bench that there was some dispute or confusion as
to who is the owner of the suit premises. In our
view, there was neither any dispute and nor
confusion and nor any ambiguity over the question
29
of title over the suit premises which needed any
elaborate inquiry.
66. This takes us to examine the next question as
to what was the monthly rent of the suit premises –
whether Rs.1600/- towards monthly rent and
Rs.38,400/- towards maintenance charges as
claimed by the respondent or Rs.40,000/- as
claimed by the appellant.
67. In our view, the monthly rent of the suit
premises was Rs.40,000/-. It is for the reason that
Firstly, the respondent had been paying
Rs.40,000/- per month to their previous landlord –
GEHA for a long time; Second, the bifurcation of
Rs.40,000/- was being sought by the respondent so
that they may get the benefit of applicability of the
Tenancy Act to defend therein tenant’s right which
they failed to prove and lastly, the rent receipts filed
by the parties clearly proved that the monthly rent
30
of the suit premises was Rs.40,000/- and not
Rs.1600/-.
68. This takes us to examine the next question as
to whether the suit filed by the appellant invoking
the provisions of the TP Act was maintainable or it
should have been filed under the Tenancy Act.
69. In our opinion, the appellant rightly filed the
suit by invoking the provisions of the TP Act. It is
for the reason that once the monthly rent of the suit
premises was found to exceed the limit prescribed
under Section 3(f) of the Tenancy Act, the provisions
of the Tenancy Act had no application to the suit
premises.
70. Section 3(f) of the Tenancy Act says that any
premises let out for non-residential purpose when
carries more than Rs. 10,000/- as monthly rent in
the areas included within the limits of Municipal
31
Corporation, the provisions of the Tenancy Act will
not apply.
71. In the case at hand, the monthly rent of the
suit premises was Rs.40,000/- and, therefore, the
appellant was well within their right to file summary
suit against the tenant's eviction and for recovery of
the arrears of rent by taking recourse to the
provisions of the TP Act read with Rule 1(B) of The
Rules applicable to the suits filed on the original
side jurisdiction of the High Court at Calcutta.
72. In the light of the foregoing discussion, we are
of the view that the respondent failed to raise any
arguable and substantial defense as required under
Rule 6 read with Rule 9 of the Rules and the three
grounds raised for seeking leave to defend the suit
were only for the sake of raising and had no factual
or/and legal foundation to stand for trial in the suit
and hence no leave can be granted to the
32
respondent on such grounds under Rule 9 of the
Rules. It was, therefore, rightly declined by the
Single Judge but wrongly granted by the Division
Bench.
73. In view of the foregoing discussion, the appeal
succeeds and is allowed. Impugned judgment is set
aside and that of the Single Judge is restored.
74. The respondent is granted six months’ time to
vacate the suit premises subject to the condition
that they shall deposit the entire arrears of rent up
to date at the rate of Rs.40,000/- per month within
one month from the date of this order and also
deposit six months’ rent by way of damages for use
and occupation within one month in advance.
75. The entire amount, as directed above, be
deposited with the High Court. The appellant shall
be entitled to withdraw the sum so deposited. The
respondent shall also furnish the undertaking in
33
this Court within two weeks stating therein that
they will vacate the suit premises within six months
from the date of this order and will also deposit the
sum, as directed above, in time. Failure to file the
undertaking and deposit of the amount will entitle
the appellant to execute this order against the
respondent on the expiry of one month.
76. As a consequence of this judgment, all the
pending cases mentioned above such as, C.S.
No.53/2007, Title Suit No.1183/2012, and W.P. No.
569 of 2004 which were filed by the parties against
each other in various Courts in relation to the suit
premises and, if pending till date, stand accordingly
disposed of.
………...................................J. [R.K. AGRAWAL]
…...……..................................J.
[ABHAY MANOHAR SAPRE] New Delhi; April 20, 2018