2007 Supreme(Cal) 471

High Court Of Calcutta
Alok Kumar Basu And Jyotirmay Bhattacharya, JJ.
ESAB INDIA LIMITED - Appellant
Versus
BOARD OF TRUSTEES FOR THE PORT OF KOLKATA - Respondent
CAN 9546  Of  2006
Decided On : 06/29/2007

The possession of an unauthorized occupant cannot be protected by way of grant of injunction against the rightful owner.

Headnote:

JYOTIRMAY BHATTACHARYA, J. ( 1 ) REJECTION of the plaintiffs application for temporary injunction under Order 39 Rules 1 and 2 of the Code of Civil Procedure by the Civil Judge (Senior Division), 6th Court, Alipore by an order being No. 26 dated 13th November, 2006 passed in Title Suit No. 125 of 2005, is under challenge in this appeal at the instance of the plaintiff/appellant herein.

Fact of the Case:

Kolkata Port Trust leased out 39009.45 sq. mt. land to I.O.L. Limited for 30 years with two options of renewal for further 30 years each. During the lease, I.O.L. Limited sold their Equipment Division to the appellant. The appellant negotiated with the Kolkata Port Trust for obtaining a lease of the land and the Port Trust authority agreed to grant a fresh lease for ten years without any option for renewal. The said lease was due to expire on 15th October, 2005. During the lease, the Port Trust authority granted permission to the appellant to mortgage the land and factory to ICICI Bank limited for obtaining loan of Rs. 50 millions and Rs. 25 millions respectively. In September, 2003, the appellant approached the Port Trust authority for grant of a fresh lease for a further period of 15 years on existing terms by way of renewal of the lease. Port Trust authority agreed to grant a fresh lease for a period of 15 years without any option of renewal but only upon prior determination of the existing lease provided the appellant is agreeable to pay the rent, non-refundable and non-adjustable premium and security deposit as mentioned in its letter dated 4th February, 2004. The appellant did not agree to the said terms, as according to the appellant, those terms of the Port Trust authority, were unconscionable. In response to the appellant's counter-offers, the Port Trust authority, however, did not accept the counter-offer of the appellant and accordingly conveyed its decision to the appellant by its letter dated 23rd March, 2005. By the said letter, the offer which was earlier given to the appellant by the Port Trust authority for grant of fresh lease of 15 years, was withdrawn. The appellant was also called upon to hand over the peaceful possession of the suit land on expiry of the lease period. Thereafter, the appellant by its letter dated 30th June, 2005 made a further request to the Kolkata Port Trust authority for grant of fresh lease for another 15 years with renewal clause on reasonable and acceptable terms, as mentioned in its earlier letter dated 20th April, 2004. In response to the said letter, the Kolkata Port Trust authority by its letter dated 24th/26th September, 2005 intimated the appellant about its intention to grant a fresh lease for 15 years without any option for renewal from a prospective date on the following terms: The appellant by its letter dated 3rd October, 2005 intimated the Kolkata port Trust authority that although the appellant principally accept the offer of the Port Trust authority for grant of lease of 15 years, but did not accept the aforesaid terms of the Port Trust authority, as according to the appellant, those terms are not proper, legal and valid. The appellant further requested the Port Trust authority to give the details regarding the break-up and/or basis of the calculation of the rate of rent etc. at an earliest for its further consideration. The Port Trust authority by its subsequent letter dated 13th October, 2005 gave the details of the financial terms and asked for confirmation of the same by the appellant within 15 days from the receipt of the said letter. The appellant did not answer to the said letter thereafter, but continued to remain in possession even after the expiry of the lease period on payment of damages for such wrongful occupation. The Port Trust authority, however, assured the appellant that the said amount will be appropriate towards the rent if ultimately fresh lease is granted in favour of the appellant. Since the appellant did not answer to the said letter of the Port Trust authority, the Port Trust authority by its subsequent letter dated 8th November, 2005 called upon the appellant to show cause on or before 22nd November, 2005 as to why an order of eviction should not be made against the appellant as the appellant is in wrongful possession of the said property since expiry of the lease period by efflux of time.

Finding of the Court:

The Court held that there was not concluded contract between the parties which is capable of enforcement by way of a decree of specific performance of contract. The Court further held that the rate of rent and the other consideration for grant of lease such as premium and security deposit, provision for subsequent escalation of rate of rent as proposed by the Port Trust authority were not accepted by the appellant who invited this Court to determine the rent at which the suit property can be let out to the appellant. Considering the said pleading of the appellant, the learned Trial Judge held that prima facie case has not been made out for grant of injunction.

Issues: None

Ratio Decidendi: The Court held that the Port Trust authority is authorised to demand rent at a rate higher than the prescribed rate in view of the provision contained in section 49 (3) of the Major Port Trusts Act, 1963. The Court further held that the plaintiff/appellant has failed to make out any prima facie case in support of its prayer for injunction. The Court also held that the possession of an unauthorized occupant cannot be protected by way of grant of injunction against the rightful owner.

Final Decision: The appeal was dismissed on contest. The impugned order of the learned Court below was affirmed.