REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 5230-5231 OF 2019 (Arising out of SLP (C) Nos.5230-31 of 2019)

BENGAL CHEMICALS AND  PHARMACEUTICALS LIMITED AND OTHERS

...Appellants                                  

VERSUS

AJIT NAIN AND ANOTHER                      ...Respondents

J U D G M E N T

R. BANUMATHI, J.

Leave granted.

2. These appeals arise out of the orders of the High Court of

Calcutta  in  MAT  No.586  of  2018  dated  10.12.2018  and

19.12.2018  in  and by which the High Court  has quashed the

order dated 01.10.2018 passed by the Estate Officer under sub-

section (1) of Section 5 and  sub-sections (2) & (2A) of Section 7

of the Act, 1971 in the application bearing CAN 9489 of 2018 and

remitted  the  matter  to  the  concerned  Estate  Officer  for

consideration of the matter afresh.

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3. Brief  facts  which  led  to  filing  of  these  appeals  are  as

follows:-  

Appellant  No.1  is  the  owner  of  a  limited  Company,

Government   of  India  Enterprises  known  as  Harvard  House

situated  at  No.168,  Maniktala  Main  Road,  PS  Phoolbagan,

Kolkata – 700 054.  The property in question is a public premises

within  the  meaning  of  premises  as  contemplated  under  the

provisions  of  Section  2(e)  of  the  Public  Premises  (Eviction  of

Unauthorized Occupants) Act, 1971 (Act No.40 of 1971).

4. Respondent  No.1  was  a  lessee  under  appellant  No.1  in

respect of 6500 sq. ft., a three storied building along with an open

space measuring 2575.13 sq. ft. in the said premises at No.168,

Maniktala  Main  Road  in  terms  of  the  lease  agreement  dated

21.08.1995  commencing  on  and  from 01.06.1993  at  the  initial

lease rent of Rs.55,000/- per month.  Respondent No.1 has been

running  a  Montessori  School  in  the  said  building  known  as

Harvard House and the entire schedule premises was leased out

to  respondent  No.1-Ajit  Nain  in  terms  of  the  aforesaid  lease

agreement for             21 years.

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5. As  per  terms  of  the  lease  dated  21.08.1995,  it  was

specifically laid down that the lease rent will be enhanced at the

rate of 10% every two years until expiry of the period of the lease.

The  aforesaid  period  of  lease  expired  by  efflux  of  time  on

31.05.2014.  Before expiry of lease period at the request of the

respondent, a meeting was held on 20.5.2014 in the office of the

appellant at Calcutta to consider the renewal of lease.

6. In response to letter dated 28.05.2014 of respondent No.1,

appellant No.1 issued a letter dated 30.05.2014 proposing new

terms  and  conditions  for  the  extension  of  lease  period.   The

communication  between the  parties  led  to  the  earlier  round of

litigation in WP No.28002(W) of 2017 before the High Court of

Calcutta  and  the  same  was  dismissed  vide  order  dated

22.11.2017 by the Single Judge.

7. Respondent No.1 challenged the order dated 22.11.2017 in

MAT No.2023 of 2017 before the High Court of Calcutta.   The

Division Bench disposed of the appeal by order dated 17.01.2018

with the direction that Union of India will appoint other person as

the  Estate  Officer  in  place  of  the  present  Estate  Officer  and

respondent No.1 to deposit Rs.25,00,000/- towards damages with

appellant  No.1  within  five  weeks.   The  court  also  directed

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respondent No.1 to pay the electricity charges.  In compliance of

the  order  of  the  High  Court,  respondent  No.1  has  deposited

Rs.25,00,000/-  and  also  arrears  of  electricity  charges.  In

pursuance of the order of the Division Bench dated 17.01.2018,

Shri Manotosh Bandhopadhaya, Assistant General Manager (QA)

of  appellant  No.1  was  appointed  as  new  Estate  Officer  vide

Gazette Notification No.58017/01/2018-PSU dated 09.03.2018 of

Government of India.

8. The Estate Officer issued show cause notice to respondent

No.1 on 23.05.2018 in pursuance of clause (b)(ii) of sub-section

(2) of Section 4 of the Public Premises (Eviction of Unauthorized

Occupants)  Act,  1971  calling  upon  him  to  appear  before  the

Estate Officer and also called upon respondent No.1 to pay the

damages  with  interest.   The  Estate  Officer  granted  number  of

hearings to respondent No.1 viz. 04.06.2018, 15.06.2018.   

9. Being  aggrieved,  respondent  No.1  challenged  the  notice

dated  23.05.2018  and  filed  a  second  writ  petition  being

WP No.7934(W) of 2018 before the High Court of Calcutta.  The

Single  Judge  of  the  High  Court  vide  order  dated  19.06.2018

dismissed the writ petition by extending the time to file the show

cause to the notices.   

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10. Being  aggrieved  by  the  dismissal  of  the  writ  petition,

respondent No.1 filed an appeal in MAT No.586 of 2018.  No stay

was granted by the Division Bench in the said appeal  nor any

direction was issued by the High Court not to proceed with the

hearing of the eviction proceedings.  As there was no stay granted

by the Division Bench in MAT No.586 of 2018, the Estate Officer

proceeded  with  the  eviction  proceedings.   The  Estate  Officer

granted  as  much  as  five  further  hearings  dated  29.06.2018,

17.07.2018, 27.07.2018, 07.08.2018 and 21.08.2018.  The Estate

Officer  vide  order  dated  01.10.2018  passed  the  eviction  order

directing respondent No.1 to vacate the premises within a week

from the  date  of  the  eviction  order.   By  the  said  order  dated

01.10.2018,  the  Estate  Officer  assessed  the  damages  and

interest  at  Rs.4,61,63,624/-  payable  by  respondent  No.1

(Damages Rs.3,30,33,000/- plus interest at Rs.1,31,30,624/-).   

11. Being aggrieved by the order of eviction, respondent No.1

filed an application being CAN No.9489 of 2018. The High Court

vide impugned order set aside the order dated 01.10.2018 passed

by the Estate Officer and remitted the matter to the Estate Officer

to  consider  the  matter  afresh  in  accordance  with  law.   Being

aggrieved,  appellant  No.1-Bengal  Chemicals  and

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Pharmaceuticals  Limited  has  filed  these  appeals.  Respondent

No.1 entered appearance and filed a detailed counter affidavit.

12. We  have  heard  Mr.  Sarad  Kumar  Singhania,  learned

counsel  appearing  for  the  appellants  and  Mr.  Biswaroop

Bhattacharya,  learned  counsel  appearing  for  respondent  No.1.

We have perused the impugned judgment and other materials on

record and carefully considered the matter.

13. The  learned  counsel  appearing  for  the  appellants  has

submitted  that  respondent  No.1  is  running  a  school  in  the

premises comprising of 6500 sq. ft. with open space measuring

2575.13 sq. ft. and respondent No.1 is enjoying the property for

commercial  purpose  of  running  the  school  since  01.06.2014

without  payment  of  any rent  which  is  calculated  approximately

Rs.4.61  crores  as  assessed  by  the  Estate  Officer  which  is

payable to appellant No.1.  It was submitted that since respondent

No.1 has not paid the rent, the Estate Officer rightly concluded

that respondent No.1 is an unauthorized occupant and passed the

order under Section 5(1) and sub-section (2) and (2A) of Section

7 of the Act.  It was further urged that respondent No.1 has the

right to file an appeal against the order dated 01.10.2018 passed

by the Estate Officer under the provisions of Section 9 of the Act

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only before the Appellate Court that is the District Judge of the

district and the writ petition filed is not maintainable.

14. The  learned  counsel  appearing  for  respondent  No.1  has

submitted that by taking judicial notice of the fact of involvement

of  the  previous  Estate  Officer  in  the  eviction  proceedings,  the

High  Court  has  rightly  set  aside  the  order  of  eviction  dated

01.10.2018 passed by the Estate Officer.  It was submitted that no

sufficient  opportunity  was afforded to respondent  No.1 and the

quantum of damages fixed by the Estate Officer is arbitrary and

therefore, respondent No.1 is justified in challenging the order of

the Estate Officer before the High Court in the pending appeal.

The learned counsel further submitted that a rent of Rs.21/- per

sq. ft. cannot all of a sudden become Rs.50/- per sq. ft. without

any  rhyme  or  reason  and  respondent  No.1  has  always  been

ready to pay a reasonable rent and not a rent which is unilaterally

imposed on him.  It was further submitted that in compliance with

the order of the High Court dated 17.01.2018, respondent No.1

has deposited Rs.25,00,000/- and also paid the electricity charges

which shows the bona fide of respondent-tenant.

15. In the nature of the order which we propose to pass, we are

not inclined to go into the merits of the rival contentions of the

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parties.  Admittedly, the lease has come to an end on 31.05.2014

by efflux of time.  According to respondent No.1, the meeting was

held on 20.05.2014 in the office of appellant No.1 and there was

discussion on the question of renewal of lease.  It is stated that

appellant  No.1  has  forwarded  a  letter  on  30.05.2014  to

respondent  No.1  for  further  renewal  of  lease  subject  to  the

acceptance of the terms:- (i) from June 20, 2014, the rent of the

covered space as well as the open space shall be at Rs.50/- per

sq.  ft.  subject  to  increase of  10% for  every  two years;  (ii)  the

tenure of the agreement will  be three years and thereafter,  the

agreement  may  be  renewed  for  further  period  upon  mutual

discussion between the parties.  The terms proposed by appellant

No.1 in  the said  letter  dated 30.05.2014 was not  agreeable to

respondent No.1.  According to respondent No.1, as per the terms

of the lease, the rent payable was only Rs.1,42,656/- per month.

16. Be that as it may, admittedly, from 01.06.2014, respondent

No.1 has not paid the rent except the amount of Rs.25,00,000/-

which he has deposited in compliance with the order of the High

Court  dated  17.01.2018.   In  the  proceeding  before  the  Estate

Officer, respondent No.1 has not put forth his defence; respondent

No.1 was only taking adjournments on the ground of pendency of

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the appeal before the High Court in MAT No.586 of 2018.  In our

view, sufficient opportunity has to be given to respondent No.1

and the order of the High Court remitting the matter to the Estate

Officer  therefore,  has  to  be  maintained,  however,  subject  to

respondent No.1 paying the reasonable amount as damages by

way of interim measure for use and occupation.  As pointed out

earlier,  respondent  No.1  is  in  occupation  of  land  and  building

measuring 6500 sq.  ft.  consisting of  three storied building plus

open space of 2575.13 sq. ft. in Maniktala Main Road, Kolkata.

Without prejudice to the contentions of both the parties, we direct

respondent No.1 to pay an amount of Rs.2,50,000/- per month as

damages for use and occupation from June, 2014 till May, 2018.

From  June,  2018,  respondent  No.1  shall  pay  an  amount  of

Rs.3,00,000/- per month.

17. The order of the High Court dated 10.12.2018 corrected by

the  order  dated  19.12.2018  passed  in  MAT  No.586  of  2018

remitting the matter to the Estate Officer for consideration of the

matter afresh in accordance with law is affirmed.  These appeals

are disposed of with the following directions and observations:-

(i) Respondent  No.1  shall  pay  the  amount  of

Rs.2,50,000/-  per  month  as  damages  for  use  and

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occupation of  the premises from June, 2014 till  May,

2018.  From June, 2018, respondent No.1 shall pay the

amount  of  Rs.3,00,000/-  per month as damages and

continue to pay the same till consideration and disposal

of the matter afresh by the Estate Officer;

(ii) The  arrears  payable  by  respondent  No.1  (after

deducting  Rs.25,00,000/-  already  deposited  by

respondent  No.1  in  the  High Court)  shall  be  paid  to

appellant  No.1  in  three  equal  installments.  The  first

installment is payable on or before 31st August, 2019.

The next two installments are payable by the end of

October, 2019 and December, 2019 respectively;

(iii) The damages stated above is  tentative.   The Estate

Officer  after  providing  opportunity  to  both the parties

shall  determine the appropriate quantum of damages

and  the  payment  presently  made  shall  remain

adjustable either way, dependent on the quantum to be

decided;

(iv) After respondent No.1 deposits the entire arrears, the

Estate  Officer  shall  take  up  the  matter  and  afford

sufficient opportunity to both the parties and determine

the quantum of damages payable and pass appropriate

orders in accordance with law.

(v) The appellant is permitted to withdraw the amount of

Rs.25,00,000/-  (Rupees  Twenty  Five  Lakhs  Only)

deposited by respondent No.1 forthwith. Appellant No.1

is  also  permitted  to  withdraw  the  electricity  charges

deposited  by  respondent  No.1,  if  not  already

withdrawn.

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(vi) On deposit of the first installment of arrears, appellant

No.1  shall  ensure  supply  of  water  if  it  has  been

disconnected as alleged by respondent No.1.

(vii) On  failure  to  deposit  any  one  of  the  installments  of

arrears or the damages payable for use and occupation

for every month, respondent No.1 shall forfeit the right

of his defence and consideration. In such an event, the

Estate Officer shall  restore the proceedings and shall

pass  an  order  of  eviction  in  accordance  with  law.

Respondent No.1 shall in such event not be heard to

make out any grievance relating to the eviction order;

and

(viii) Parties shall bear their respective costs.

……...........................J.        [R. BANUMATHI]

……...........................J. [A.S. BOPANNA]

New Delhi; July 09, 2019

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