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High Court Of Calcutta
RUMA PAL, S. N. BHATTACHARJEE
STEPHEN COURT LIMITED - Appellant
Versus
OFFICIAL TRUSTEES OF WEST BENGAL - Respondent
O. S. 283 Of 1997
Decided On : 12/21/1999
TENANCY - MONTHLY TENANCY - LEASE - VALIDITY - JURISDICTION - RES JUDICATA - ESTOPPEL - LIMITATION - [KEYWORD] - [SUBJECT] - [ACT SECTION LIST] - [SUMMARY]
Fact of the Case:
The appellant, a company, claimed to be a lessee of the premises in question for a period of 99 years from 1919. The Official Trustee, as the executor and trustee of the estate of the owner of the premises, claimed that the appellant was a monthly tenant and that the lease executed between the Official Trustee and the appellant in 1984 for a period of 60 years from 2018 was void.
Finding of the Court:
The Court held that the appellant was a monthly tenant in respect of the premises and not a long term lessee. It also held that the lease executed between the Official Trustee and the appellant in 1984 for a period of 60 years from 2018 was void. The Court further held that the application of the Official Trustee was barred by res judicata, estoppel and limitation.
Issues: 1. Whether the appellant was a monthly tenant or a long term lessee of the premises? 2. Whether the lease executed between the Official Trustee and the appellant in 1984 for a period of 60 years from 2018 was valid? 3. Whether the application of the Official Trustee was barred by res judicata, estoppel and limitation?
Ratio Decidendi: 1. The Court held that the appellant was a monthly tenant of the premises and not a long term lessee on the basis of the following: * The agreement for sale between Aratoon Stephen and the appellant was not registered. * The appellant's possession was protected under section 53a of the Transfer of Property Act. * The finding of the learned Judge that the appellant was a monthly tenant under the Official Trustee was challenged on two bases. First as the transfer of Larmour's leasehold interest to Aratoon was undisputedly valid, during the pendency of the 1919 lease, the Official Trustee had no right to possession or to further transfer the leasehold interest and create a monthly tenancy in favour of any party; second, if the sale agreement between Aratoon and the appellant were void, Aratoon's interest revived and there was no privity of contract or estate between the Official Trustee and the Appellant. 2. The Court held that the lease executed between the Official Trustee and the appellant in 1984 for a period of 60 years from 2018 was void on the basis of the following: * The Official Trustee had no jurisdiction to entertain the appellant's application either under the Official Trustees Act, 1913 or under the Indian Succession Act, 1925. * The Court had the jurisdiction to entertain the appellant's application and the order passed on 30th May, 1984 operated as a valid order. * The Court had the jurisdiction to direct the execution of a fresh lease in respect of the period after 2018. 3. The Court held that the application of the Official Trustee was barred by res judicata, estoppel and limitation on the basis of the following: * The Official Trustee could have impugned the maintainability of the appellant's application before R. N. Pyne J. He did not. On the other hand, it was at the Official Trustee's suggestion that the appellant applied to the High Court for a lease for 60 years from 2018. * The Official Trustee, in answer to the appellant's application in 1984 categorically said in his affidavit that the following proposal would be beneficial to the Estate and that the order should be passed accordingly. * The Court accepted the proposal and the order appointing the valuer, increasing the rental for the remaining period of the 1919 years lease and directing execution of the second lease was passed on the submission of the Official Trustee. * After the final order was passed on 30th May, 1984, the appellant has paid the enhanced rental and the Official Trustee accepted the enhanced rent and has continued to do so for thirteen years. * The law on res judicata however is not clear in so far as it relates to questions of law or the jurisdiction of the Court.
Final Decision: The Court allowed the appeal and set aside the decree of the learned single Judge.
( 1 ) THIS appeal has been preferred from a decree passed on an Originating Summons filed by the respondent under Chapter XIII of the Rules of the Original Side of the Court. The learned judge declared that the appellant was a monthly tenant in respect of Premises No. 18, Park Street, Calcutta (referred to as the premises) and not a long term lessee. It was also held that a lease executed between the Official Trustee and the appellant in 1984 for a period of 60 years from 2018 was void. Before considering the various issues raised the factual background is required to be set out in some detail.
( 2 ) THE premises was owned by Peter Charles Earnest Paul (referred to as Paul ). On 13th September 1919 Paul leased out the premises to Francis Daniel Augustus Larmour (referred to as Larmour) by a registered deed for 99 years. This registered deed of lease (referred to as the 1919 Lease) was effective from 1. 6. 1919 and is to expire on 31. 5. 2018. On 1st August, 1920 Paul died. Prior to his death he had executed a Will appointing the Official Trustee as the executor and trustee in respect of the premises. The Official Trustee obtained probate of Paul's Will on 7th October, 1920 and appears in this case representing the estate of Paul. On 15th February, 1921 Larmour assigned his leasehold right for the unexpired period of the 1919 lease in favour of Aratoon Stephen by a registered deed of assignment.
( 3 ) ON 4th December 1923 Stephen Court Ltd. (the appellant) was incorporated under the provisions of Indian Companies Act, 1913. Aratoon Stephen was a shareholder and one of the first Directors of the appellant. The Memorandum of Association of the appellant provides as one of its objects the acquisition of the buildings and premises specified in the agreement referred to in Clause 3 of the Company's Articles of Association. Clause 3 of the Articles of Association provides that the appellant company would forthwith enter into an agreement with Aratoon Stephen in respect of the premises. It was also mentioned that the basis on which the appellant company was established was that the company would acquire the premises. An agreement was accordingly entered into on 10th December 1923 between Aratoon Stephen and the appellant company by which the appellant was to purchase the leasehold right of Aratoon Stephen in the premises for the balance unexpired period of the 1919 lease. The agreement, although duly executed by the parties and filed with the Register of Companies, was not registered.
( 4 ) A supplementary agreement was entered into between Aratoon Stephen and the appellant company on the same date in connection with the creation of a trust in respect of the leasehold interest in the premises. The supplementary agreement recorded that the appellant company was entitled to the premises for the residue of the term of 99 years from 1. 6. 1919 and that the premises was vested in Aratoon Stephen as a trustee until the time the appellant company made payment to Aratoon Stephen of the consideration for the transfer of the leasehold interest to it. The supplementary agreement was duly registered.
( 5 ) THE Appellant Company made payment of the consideration money to Aratoon Stephen and in 1924 constructed a five-storied building at the premises. The appellant company paid rent to the Official Trustee as the superior landlord and was granted rent receipts by the Official Trustee.
( 6 ) ON 9th February 1994 the appellant wrote to the Official Trustee requesting for extension of the lease period for a further period of 60 years after the expiry of the original lease period on 31. 5. 2018. The Official Trustee by a letter dated 20th March 1984 wrote to the appellant that the appellant should apply to the High Court for obtaining grant for extension of the 1919 lease in respect of the premises. The appellant company accordingly made an application to the High Court (Matter No. 432 of 1984) under section 302 of the Indian Succession
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