Punjab National Bank vs Senior Divisional Manager Life Insurance Corporation of India and Estate Office Life Insurance Corporation of India

A.S. Bopanna, J.—The Petitioner is before this Court assailing the order dated 29.11.2005 passed in Case No. 2/2005 vide Annexure-G and the order dated 07.10.2009 passed in MA No. 2/2006 vide Annexure-L to the petition.

Heard the learned senior counsel appearing for the Petitioners and the counsel appearing for Respondents and perused the petition papers.

The fact that the Petitioner was a licencee in respect of the premises which belonged to the Respondents situate at Popular building, KSR Road, Mangalore measuring an extent, of 1840 sq.ft on a monthly rental of Rs. 10,271/- for a period of five years from 28.03.2000 is not in dispute. The Respondents subsequently issued a notice calling upon the Petitioner to vacate from the premises in question. The fact that the Petitioner has thereafter vacated the premises on 05.06.2006 is also not in dispute. The question however which arises for consideration in the instant petition is with regard to the damages that have been imposed by the Estate Officer by the order dated 29.11.2005 and upheld by the appellate authority in Misc. No. 2/2006 dated 07.10.2009.

Having heard the learned Counsel appearing for the parties, I have at the first instance perused the order dated 29.11.2005 passed in Case No. 2/2005. A perusal of the same would indicate that the proceedings at the first instance in fact is in respect of evicting the Petitioner from the premises since according to the Respondents, the Petitioners had continued in the premises even after 01.04.2005 after the period of the agreement had expired. In that regard, on receipt of the notice received from the Respondents, the Petitioners had indicated that they would vacate the premises within a period of six months. Further, as noticed ultimately the Petitioners have vacated on 05.06.2006. The question therefore is with regard to the quantum of licence fee/damages that is payable by the Petitioner from 01.04.2005 to 05.06.2006 since at the first instance the licence fee which had been fixed was at the rate of Rs. 10,271/- and now the Estate Officer by his impugned order has fixed the damages at Rs. 66,240/-per month for the said period. The said damages has been fixed by reckoning the rate of licence fee at Rs. 28/-per sq feet from 01.04.2005 onwards.

In this regard, the contention on behalf of the Petitioner is that the Estate Officer at the first instance has not applied his mind to the fact situation and has arrived at the figure which is highly imaginary. In respect of a premises to which the Petitioner was paying Rs. 10,271/- as rent in any event it could not have been fixed at the rate of Rs. 28/- per sq ft. It is contended that during the pendency of the instant writ petition, the Respondent has also filed an application before this Court to point out that the very same premises has been let out to one M/s. Essam Financial Consultants at lesser rate of licence fee i.e., at Rs. 16,560/- per month and therefore, the rent as fixed by the Estate Officer is not sustainable.

Learned Counsel for the Respondent however referring to the order passed by the Estate Officer as well as the appellate authority would contend that the orders impugned would disclose that the Respondents herein had produced before the Estate Officer the agreements relating to similar properties to point out that the damages as claimed by them is to be fixed by the Estate Officer. It is further pointed out by the learned Counsel that the Petitioner had not availed the opportunity which was granted by the Estate Officer and they had not remained present during the proceedings and therefore, the Petitioner cannot be heard to complain at this stage.

In the light of the contentions put forth by the learned Counsel for the parties, a perusal of the papers discloses that the order no doubt indicates that the Estate Officer has referred to 4 lease agreements dated 31.08.2005, 12.05.2005, 28.11.2003 and 06.06.2005 as produced by the Respondents herein. However, the operative portion of the order would indicate that the Estate Officer in fact has not made a thorough discussion with regard to the nature of such documents, the nature of the property and as to whether the same could be considered as a comparable instances to the property in question. In fact the estate Officer in the operative portion of his order has at the first instance upheld the contention of the Respondents herein seeking for eviction and an order of eviction has been passed and thereafter has fixed the rent at Rs. 28/-per sq feet payable as damages by the Petitioner herein.

In that light, a perusal of the order passed by the appellate authority would indicate that the appellate authority in fact has upheld the order by taking note of the said circumstance which has been recorded by the Estate Officer. Since I have already noticed that the Estate Officer has not properly analysed the said documents, the reason assigned by the appellate authority also cannot be accepted.

One other aspect of the matter is that the Petitioner has sought to refer to the lease deed dated 02.04.2008 though being of a much subsequent period in question. The said document relates to the very same premises in question which had been leased to one M/s. Essam Financial Consultants firm. It is no doubt true that the said document pertains to the subsequent period and was not available before the Estate Officer. In the instant case, though the Petitioners have not put forth their contentions before the Estate Officer, during the pendency of the petition, what cannot be lost sight of is the fact that at the first instance, when the notice was issued to the Petitioner, they contended that if some time is granted they would vacate and they had sought for six months period. In fact they had filed a memo to that effect and failed to appear thereafter. It is in that context, the entire proceedings before the Estate Officer would have to be looked at, since by the time the proceedings was initiated before the Estate Officer, they had also decided to vacate the premises and therefore there was no need for effective resistance of the proceedings. The only question was however with regard to the fixing of the damages and in a circumstance where the Petitioner at the first instance had agreed to vacate the premises, the proceedings initiated u/s 5 of the Act ought to have been concluded and an opportunity ought to have been granted to the Petitioner while taking recourse to the proceedings u/s 7 by following Rules 7 and 8 of the Rules to fix the damages.

Considering these aspects of the matter, I am of the opinion that the Estate Officer was not justified in fixing the rate of damages unilaterally. Therefore, the order dated 29.11.2005 cannot be sustained. Consequently, the order dated 07.10.2009 passed in MA No. 2/2006 upholding the same cannot be sustained. The said orders are accordingly set aside. The matter stands remitted to the Estate Officer, to restore Case No. 2/2005 limited only to the extent of reconsideration of the appropriate damages to be fixed in respect of the premises. The said proceedings shall be held after issuing notice to the Petitioner and providing opportunity in this regard. The Petitioner is also granted liberty of producing additional documents including the lease deeds which is produced before this Court. The Estate Officer shall thereafter consider all aspects of the matter and arrive at a conclusion in accordance with law.

In terms of the above, the petition stands disposed of. No order as to costs.