High Court Of Calcutta
Sengupta And Arun Kumar Bhattacharya, JJ.
CRESCENT PLASTICS PRIVATE LIMITED - Appellant
Versus
WEST BENGAL SMALL INDUSTRIES DEVELOPMENT CORPORATION LIMITED - Respondent
WP 436 Of 2003
Decided On : 02/08/2007
WEST BENGAL GOVERNMENT PREMISES (TENANCY REGULATION) ACT, 1976 - SECTION 3 AND SECTION 4 - LEASE TERMINATION - AUTOMATIC TERMINATION - BREACH OF COVENANT - NON-PAYMENT OF RENT - FAILURE TO RESUME BUSINESS - VALIDITY OF EVICTION - APPLICABILITY OF PROVISIONS TO COMMERCIAL AND INDUSTRIAL PREMISES.
Fact of the Case:
The appellant, a lessee of a government-owned industrial plot, challenged the termination of their lease and eviction by the respondent authorities. The lease agreement contained terms and conditions, including the obligation to pay rent and start manufacturing within a specified period, with a provision for automatic termination in case of breach of covenant.
Finding of the Court:
The court found that the appellant had committed a breach of covenant by failing to pay the annual lease rent for more than three consecutive months and had not started manufacturing within six months from the commencement of the lease. It also held that the provisions of the West Bengal Government Premises (Tenancy Regulation) Act, 1976, were applicable to the case and that the termination of the lease and eviction were carried out in accordance with the provisions of the Act.
Issues: 1. Whether the appellant had committed a breach of covenant by failing to pay the annual lease rent and by not starting manufacturing within the stipulated period. 2. Whether the provisions of the West Bengal Government Premises (Tenancy Regulation) Act, 1976, were applicable to the case. 3. Whether the termination of the lease and eviction were carried out in accordance with the provisions of the Act.
Ratio Decidendi: 1. The court held that the appellant had committed a breach of covenant by failing to pay the annual lease rent for more than three consecutive months and by not starting manufacturing within six months from the commencement of the lease. 2. The court held that the provisions of the West Bengal Government Premises (Tenancy Regulation) Act, 1976, were applicable to the case as the lease was for commercial and industrial purposes. 3. The court held that the termination of the lease and eviction were carried out in accordance with the provisions of the Act, as the appellant had failed to pay the rent and had not resumed business activity despite being given time to do so.
Final Decision: The court dismissed the appeal, holding that the termination of the lease and eviction were valid and in accordance with the provisions of the West Bengal Government Premises (Tenancy Regulation) Act, 1976.
( 2 ) THE relevant terms amongst others, which are necessary for the disposal of the present matter, are - to start manufacture and production as per sub-clause (f) (i) of this clause 2, (if not already started) within six months from the date of these presents or within any period which may be granted by Government under exceptional circumstances and to pay the reserved rents within the days and in the manner aforesaid. The petitioner lessee is to pay rent at the rate of rs. 395. 90 on account of pay rent at the rate of 9943. 31 per year apart from the aforesaid annual rents. The petitioner/lessee is obliged to pay other charges. If the rent reserved or any part thereof shall remain unpaid for six months after becoming payable or if any covenant on the part of lessee herein contained shall not be used by the lessee for purposes mentioned in clause 2 (f) hereof for a continuous period of six months then and in such event, it shall be lawful for the lessor or the Government at any time thereafter to determine the lease and to re-enter upon the demised premises or any part thereof in the name of the whole and thereupon this demise shall absolutely determine without prejudice to the rights of the lessor or the Government in respect of breach of the lessee covenants herein contained.
( 3 ) THE writ petitioner/appellant contended that from time to time the rent was attempted to be paid, but their representatives were harassed and/or prevented from depositing the annual rent for the period from. July, 2000 till June, 2002 and thus compelled to deposit the lease rent in september, 2002 through Bank Draft for Rs. 9,943. 31 being No. 881727 dated 25th September, 2002 drawn on Vijaya Bank in favour of the respondent no. 2. It was the contention of the writ petitioner that the writ petitioner has been carrying on business of manufacturing by assembling the parts and there is no stoppage of business activity. In spite of there being no default or breach of any convenant the respondents on 20th January, 2003 at about 11. 30 a. m. all on a sudden entered the factory of the petitioner and pushed out the employees, men and labourer of the petitioner. According to the writ petitioner, this act and action on the part of the respondents is arbitrary, illegal and unauthorised. All the goods and articles were kept in the said factory under lock and seal of the respondents. As such the petitioner did not have any access to any of the documents to establish before the learned Trial Judge that there has been no fault or breach of the covenant of the said lease agreement.
( 4 ) THE version of the respondents before the learned Court below is otherwise. It was contended that there has been default in paying annual rent and there has been no business activity and in fact an inspection was conducted by the inspector and report was submitted. It was submitted by the respondents that from the report it appeared that a
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