1962 Supreme(Cal) 84

HIGH COURT OF CALCUTTA
S. K. Sen, Amaresh Roy
STEUART AND CO. LTD. - Appellant
Versus
C. MACKERTICH - Respondent
A. F. O. D 268  Of  1956
Decided On : MARCH 27, 1962

A lease-hold cannot be transferred to a company without registered documents, and in the absence of such registered documents, the company cannot claim to be lessees governed by the registered lease deed.

Headnote:

WEST BENGAL PREMISES RENT CONTROL ACT, 1950 - LEASE - TRANSFER - TENANCY - NOTICE - MANUFACTURING PURPOSE - REPAIRS - SET OFF - EJECTMENT - ARREARS OF RENT - MESNE PROFITS - SUIT FOR - DECREE - MODIFICATION.

Fact of the Case:

The plaintiff, the landlord, filed two suits against the defendant company, the tenant, seeking decrees for ejectment and arrears of rent. The plaintiff claimed that the tenancies were governed by the West Bengal Premises Rent Control Act 1950, and that there had been default of payment of rent from May, 1952, to March, 1953. The defendant company contested the suits, contending that the tenancies were governed by the terms of the lease deeds of 22nd December, 1913 and 31st January, 1919, and that in the circumstances, the tenancies were not governed by the West Bengal Premises Rent Control Act 1950 and could not be determined by service of 15 days' notice. The defendant denied that there was any arrear of rent, and contended that for repairs of the premises which had become dilapidated the defendant company had to incur a good deal of expenditure since 1948, the expenditure on account of such repairs being Rs. 22,000/-; that the plaintiff was liable to carry out the repairs or pay the cost of the repairs, but had done as in spite of a long correspondence, and that therefore the defendant was entitled to sue for recovery of the said amount from the plaintiff; and it was contended that until adjustment of account between the parties or liquidation of the claim of the defendant on account of repairs, it could not be said that there was any arrear of rent due by the defendant company.

Finding of the Court:

The Court held that the defendant company, being a separate legal entity from the partnership firm the members of which had been granted the two leases, the lease-holds could not be transferred to the defendant company without registered documents, and in the absence of such registered documents, the defendant company could not claim to be lessees governed by the registered lease deed Exts. L and L (1). The Court also held that the defendant company had become the tenant on implied surrender of the lease by the old tenants, the partners of the firm; and that there being no registered lease deed governing the existing tenancies held by the defendant company, they must be deemed to be tenancies from month by month terminable by 15 days' notice under Section 106 of the Transfer of Property Act. The Court further held that the purpose of the tenancies was manufacturing and that therefore 6 months' notice ending with a year of the tenancy was necessary. The Court also held that the plaintiff was not bound to carry out the repairs and that therefore the defendant-company could not claim a set off for the cost of repairs against the arrears of rant.

Issues: 1. Whether the tenancies were governed by the West Bengal Premises Rent Control Act 1950? 2. Whether the defendant company was entitled to a set off for the cost of repairs against the arrears of rent? 3. Whether the purpose of the tenancies was manufacturing and that therefore 6 months' notice ending with a year of the tenancy was necessary?

Ratio Decidendi: 1. The defendant company, being a separate legal entity from the partnership firm the members of which had been granted the two leases, the lease-holds could not be transferred to the defendant company without registered documents, and in the absence of such registered documents, the defendant company could not claim to be lessees governed by the registered lease deed Exts. L and L (1). 2. The defendant company had become the tenant on implied surrender of the lease by the old tenants, the partners of the firm; and that there being no registered lease deed governing the existing tenancies held by the defendant company, they must be deemed to be tenancies from month by month terminable by 15 days' notice under Section 106 of the Transfer of Property Act. 3. The purpose of the tenancies was manufacturing and that therefore 6 months' notice ending with a year of the tenancy was necessary.

Final Decision: The appeals were allowed in part and the decrees passed by the learned Subordinate Judge were modified; the suits were decreed in part with proportionate costs for the arrears of rent claimed, but dismissed so far as the claim for ejectment and damages or mesne profits was concerned. In these appeals the parties were to bear their own costs.