Ballygunge Estates Limited vs Sachindra Nath Mukherjee

Renupada Mukherjee, J.—The Appellant of this appeal is a private limited company known as Ballygunge Estate Limited. The Appellant will henceforth be designated simply as the company. The Respondent of this appeal is one Sachindra Satli Mukherjee who was the sole Plaintiff in the trial court. The suit out of which this appeal has arisen was instituted by the Plaintiff against the Defendant for recovery of khas possession of a property which was admittedly leased out to the Defendant company by the Plaintiff by an indenture of lease dated 28th June, 1946. The Plaintiff sought to enforce his right of re-entry on the strength of a covenant in the lease to the effect that if rent remained unpaid for a period of 3 months after the day appointed for payment thereof, the lessor would have the right to re-enter the disputed property. According to the allegations of the Plaintiff in the trial court the Defendant company had neglected and failed to pay rent for the months of May, June and July, 1950. Accordingly, the present suit for recovery of khas possession was instituted by the Plaintiff. There was also a prayer for recovery of a sum of Rs. 1,500 for rent of 3 months and also a prayer for recovery of damages or mesne profits from August, 1950, till recovery of possession of the property.

The suit was defended in the trial court by the company. The main defence of the company was that rent for the period in question was not paid because Corporation taxes which were payable under the terms of the lease by the company had been increased abnormally, and notice of such increment which was received by the Plaintiff was not communicated to the Defendant. So the Defendant contended that it had suffered a very substantial loss for the above conduct of the Plaintiff. The Defendant further alleged that it had effected substantial improvements in the market which was situate on the leasehold property and if the money spent for effecting such improvement was adjusted against arrears of rent then nothing would be due to the Plaintiff. Last of all, it was alleged by the Defendant that on actual measurement the area of the demised premises had been found to be short by 10 cottahs for which the Defendant was entitled to claim abatement, if not suspension of rent.

Upon the above pleadings the main issues framed by the trial court were whether the Defendant company was a defaulter for the period from May to July, 1950, and whether it had incurred forfeiture by such default under the terms of the lease. An issue was also raised on the question of abatement or suspension of rent claimed by the Defendant. A further question which does not appear to have been pleaded in the written statement of the Defendant company, but which appears to have been canvassed before the learned Subordinate Judge at the time of hearing, was whether relief against forfeiture of the lease should be granted to the Defendant. All these issues were decided by the learned Subordinate Judge against the Defendant and in favour of the Plaintiff and a decree was passed in favour of the Plaintiff granting all the prayers made in the plaint. This appeal has been referred by the Defendant company from the above judgment and decree passed by the trial court.

Mr. Mukherjee appearing on behalf of the Defendant Appellant raised three contentions before us. He first of all contended that the finding of the court below that there has been no deficit in area of the land leased out to the Appellant is incorrect. He argued secondly that there was justification for non-payment of rent for the period in question inasmuch as municipal taxes of the demised premises which were payable by the Appellant were abnormally increased by the Corporation of Calcutta and although the Plaintiff was given such notice by the Corporation, he neglected to bring that fact to the notice of the Appellant. The third and last contention of Mr. Mukherjee was that, in any case, relief, should have been given by the trial court against forfeiture of the lease u/s 114 of the Transfer of Property Act. We shall consider all these contentions one after another.

We first take up the question of abatement or suspension of rent claimed on behalf of the Appellant. The lease which was admittedly given by the Respondent to the Appellant was marked Ext. 1 in the trial court. The date of the lease is 28th June, 1946. The leasehold property comprises two premises of Broad Street, namely, premises No. 11 and 13. It is an admitted fact that a market known as Broad Street Market had already been established on the above premises prior to the granting of the lease. The monthly rent reserved under the lease was a sum of Rs. 500. It does not appear that any premium was paid for the lease. The lease further provides that all rates and taxes which were payable for this property or which would be imposed in future by the Corporation of Calcutta would be payable by the, lessee. It is not disputed that at the time of granting of the lease the amount of taxes payable annually to the Corporation was a sum of Rs. 624 or so. By degrees this amount was increased to Rs. 2,400. The total area of the two plots leased out to the Appellant was 4 bighas 16 cottahs 10 chattaks and 140 sq. ft. In paragraph 14 of the written statement an objection was taken on behalf of the Appellant that upon measurement the area had been found to be shorter than the demised area by 10 chattaks. A Commissioner was appointed by the Court below for the purpose of holding a local investigation by repayment of the lease and by survey of the disputed premises and for ascertaining the area demised to the appellant and also the land which was in its actual possession. The Commissioner''s report has been made a part of the record. After carrying out the survey work the Commissioner prepared a case map and submitted a report. His report shows thai the area of the disputed premises as found in the locality measures 4 bighas 15 cottahs 14 chattaks. 08 sq. ft. This is less than the area given in the lease by only a little more than one cottah. The Commissioner did not make any finding as to the quantum of land which is in the actual possession of the Appellant. He has, however, shown the plots, possession of which is disclaimed by the Appellant. The area of this portion is 10 cottahs and odd chattaks. According to the contentions made on behalf of the Appellant during trial this area which is divided into several sub-plots is in the possession of three tenants of the market, namely, P. Ghosh, Abdul and P.S. Agency. It was further the contention of the Appellant that these tenants were not paying any rent to the Appellant at the time of the suit and they were paying rent to the Plaintiff. of course this is denied on behalf of the Plaintiff. After having considered the evidence adduced on this question, we are of opinion that the plea taken on behalf of the Appellant is entirely false. It was not the case of the Appellant in the pleading that the lessor failed to deliver possession of any portion of the demised premises, nor was it the ease of the Appellant that it was subsequently dispossessed from any portion of the leasehold land by the lessor. The case as made in paragraph 14 of the written statement was that the area as initially leased out was shorter than the demised area by 10 cottahs. In those circumstances, we are of opinion that the above plea of the written statement has not been substantiated by any evidence worth the name. Rather the report of the Commissioner would show that the area of the disputed property as found in the locality very nearly corresponds with the demised area-the shortage being only one cottah. This is negligible having regard to the area of the entire property. Then again, the situation of the sub plots, possession of which has been disclaimed by the Appellant, would show that the Appellant could never have failed to take possession of those plots through the tenants. This being our view we hold that the plea of abatement or suspension of rent is not tenable and we reject that contention.

The next point urged on behalf of the Appellant was that there were justifiable grounds for non-payment of rent for the period from May to July 1950, inasmuch as the Municipal taxes for the leasehold property were abnormally increased on account of the failure of the Plaintiff Respondent to resist such increment. Mr. Mukherjee submitted that at the time of the injunction of the tenancy the annual Municipal taxes amounted to Rs. 624 or so. This was raised to a sum of nearly Rs. 2,400 per year, but the notices given by the Corporation for increasing the assessment were never sent by the Respondent to the Appellant. It is not an admitted fact that during several years following the lease, the Municipal taxes were gradually enhanced up to a very large amount. Under the terms of the lease the Plaintiff Respondent was not bound to send the notices of increased assessment to the Appellant. The lease was for a period of 51 years. If the Appellant had made a timely mutation of its case in the. Corporation as a lessee it would in all probability have got notices of the increased enhancement. Be that as it may, some evidence was adduced on behalf of the Plaintiff Respondent to show at least one such notice of increased assessment was sent to one Bhabani Ghosh, the Manager of the market. This is proved by the evidence of the Respondent and also his witness Jamuna Tewari (P.W. 2). Mr. Mukherjee submitted that Bhabani Ghosh was a creature of the Respondent and he was not authorised to receive the notice or letter on behalf of the Appellant. Whether Bhabani Ghosh had any authority to receive the letter on behalf of the Appellant company is not material. What is important is that the Respondent made a bonafide attempt to inform the Appellant company that steps were being taken by the Corporation for increasing the taxes. We do not think that any further responsibility lay upon the Respondent to resist the attempt of the Corporation to increase the taxes. In our opinion the Appellant was not justified in withholding payment of rent on the ground that Corporation taxes had been abnormally increased on account of the so-called default and negligence of the Respondent. The second ground urged on behalf of the Appellant, therefore, fails.

The last and the most important point which requires our consideration in this appeal is whether relief should be given to the Appellant against forfeiture under the provisions of Section 114 of the Transfer of Property Act. That section rims in the following terms:

Where a lease of immovable property has determined by forfeiture for nonpayment of rent, and the lesser sues to eject the lessee if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together with interest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient for making such payment within fifteen days, the Court may, in lieu of making a decree for ejectment, pass an order relieving the lessee against the forfeiture; and thereupon the lessee shall held the property leased as if the forfeiture had not occurred.

Mr. Mukherjee contended that the Appellant is prepared to pay all arrears of rent and other amounts mentioned in Section 114 of the Transfer of Property Act within 15 days from today. It appears from the judgment of the court below that the applicability of Section 114 of the Transfer of Property Act to the facts of this case was considered by that court. The granting of relief under the above provision of law is discretionary with the Court and the trial court refused to exercise that discretion in favour of the lessee mainly for two reasons. The first reason was that although a notice had been served by the Respondent upon the Appellant prior to the institution of the suit calling upon the latter to make good the arrear rents, the Appellant turned a deaf ear to the proposal of the Respondent. The second reason was that although the Plaintiff lessor had waited for a long time for the Defendant to pay the arrears of rent, the Appellant had not paid them.

In the above connection, a question was raised in this Court as to whether relief against forfeiture can be prayed for at the appellate stage of a suit without making such a prayer in the Court below. From the records of the case, we find that no proper tender for payment of arrear rents and other sums was made on behalf of the Appellant in the Court below. It is no doubt true that during arguments a reference was made on behalf of the lessee to Section 114 of the Transfer of Property Act in the trial court, but there is absolutely no material to show that the lessee had a bona fide intention of paying the money. No application in writing was made in the trial court tendering payment of money. That it is desirable for the lessee to make such a written application will appear from a decision of Luxmi Spinning and Weaving Mills Ltd. Vs. Md. Ibrahim, Mutwalli, . The section no doubt does not speak of any such written application. But in the absence of such a written application the appellate Court would not be in a position to hold that such a tender was in fact made on behalf of the lessee. In the present case, we are of opinion that the Appellant did not in fact ask for any relief tinder Section 114 of the Transfer of Property Act.

Mr. Banerjee contended on behalf of the Respondent that such a relief cannot be asked for for the first time in the appellate Court. In support of his contention he relied on a case. The Dhurrumtolla Properties Ltd. v. Dhunbai Peroshaw Sorabjee ILR (1931) Cal. 311. In that case the distinction between the Indian Law and the English Law relating to relief from forfeiture has been pointed out by the learned Judge. He has observed that under the English Law relief against forfeiture can be claimed by the lessee even after an order for ejectment had been made, but this cannot be done under the Indian Law. This case has been cited as an authority in a case of Allahabad High Court Northern Indian Coal Company v. Musammat Bitti Kuer ILR (1950) All. 523 and it has been held there that relief against forefeiture u/s 114 of the Transfer of Property Act cannot be claimed for the first time in the appellate Court. With respect to the learned Judge who decided the last mentioned case, we must hold that the Calcutta case referred to above has been misconstrued. When the Calcutta case says that no relief of the above nature can be claimed after the order for ejectment has been made, it does not contemplate the appellate stage of the suit. The order of ejectment refers to an earlier order passed in favour of the lessor. Under the English Law a tenant is allowed the right to obtain relief even after a judgment for recovery of the land on the ground as forfeiture for non-payment of rent has been passed at the instance of the lessor. This is not permissible under our law. The question whether the words "at the hearing of the suit" in Section 114 of the Transfer of Property Act include the hearing of the appeal, and whether relief against forfeiture may be claimed under this section in the appellate court was considered in a (Bombay case Dayaram Kashiram Shimpi v. Bansilal Raghunath Marwari 55 Bom. L.R. 30. It was held that such a prayer can be made at the appellate stage of the suit and can be granted by the appellate court. We respectfully agree with this decision and hold that relief against forfeiture for non-payment of rent can for the first time, be asked for at the appellate stage of the suit.

We now come to the final question raised in this appeal, namely, whether, relief against forfeiture should be granted in this particular case. Mr. Mukherjee contended that great hardship would operate on his client unless such a relief is given. He also submitted that the discretion should be normally exercised in favour of the lessee. We carefully considered the question whether the facts of the case are such as to justify the granting of this relief to the Appellant. For a variety of reasons we are of opinion that this relief should not be given to the Appellant. We have already pointed out that before the institution of the suit the lessor gave a notice to the lessee asking the latter to make good the arrears of rent. Instead of doing that the lessee found fault with the lessor for the increment of the Municipal taxes. No offer worth the name was made in the Court below for payment of arrears of rent. The arrears have now mounted to a huge amount. So have the Municipal taxes. From the records we find that the Appellant practically paid no Municipal taxes since the inception of the tenancy. A defense for abatement or suspension of rent was also taken by the Appellant which should not have been taken by it. To crown all the decree for ejectment has already been executed and delivery of possession of the disputed property has been taken by the Respondent on 5th February, 1955, that is, more than five years ago. This delivery of possession could have been avoided by the Appellant if it had taken timely steps for depositing the decretal amount in the trial court which was not a very high amount at the time of the passing of the decree. That was not done. After a lapse of five years, we do not think it desirable to force this tenant upon the Respondent. For all the reasons, we are unable to exercise our discretion in favour of the Appellant regarding its prayer for relief against forfeiture. The last contention urged on behalf of the Appellant, therefore, fails.

All the contentions urged on behalf of the Appellant having failed, we dismiss this appeal with costs to the Respondent.

K.C. Sen, J.

I agree.