High Court Of Calcutta
Ashim Kumar Banerjee
UNITED EASTERN SUPPLIERS PVT.LTD. - Appellant
Versus
INDIA ICE AERATED WATER AND COLD STORAGE CO.LTD. - Respondent
C. P. 617 Of 2004
Decided On : 07/12/2005
WEST BENGAL PREMISES TENANCY ACT, 1997 - SECTION 17(4A) - RENT ENHANCEMENT - INTERPRETATION AND APPLICATION.
Fact of the Case:
The respondent company, a tenant under the petitioning creditor, refused to pay enhanced rent as per Section 17(4A) of the West Bengal Premises Tenancy Act, 1997, claiming that the landlord did not approach them for enhancement and that the Rent Controller should determine the fair rent.
Finding of the Court:
The court held that Section 17(4A) is clear and unambiguous, and once the pre-requisites are fulfilled, the enhancement of rent is automatic, and no further action is required by the tenant. The court rejected the company's contention that the Rent Controller should determine the fair rent, as the calculation required is simple arithmetic.
Issues: 1. Whether the landlord is entitled to enhance rent under Section 17(4A) of the West Bengal Premises Tenancy Act, 1997, without approaching the tenant or obtaining an order from the Rent Controller. 2. Whether the company raised a bona fide legal dispute that requires adjudication by the Rent Controller, thereby barring the maintainability of the winding-up petition.
Ratio Decidendi: 1. Section 17(4A) provides for automatic enhancement of rent for tenancies subsisting for 20 years or more in respect of premises constructed before 1984 and used for commercial purposes. 2. The pre-requisites for enhancement under Section 17(4A) were fulfilled in this case, and no further action was required by the landlord. 3. The company failed to raise a bona fide legal dispute requiring adjudication by the Rent Controller, as the calculation of enhanced rent was a simple arithmetic exercise.
Final Decision: The winding-up petition was admitted for the outstanding rent of Rs. 1,09,375-00 with interest at 6% from the date of notice until payment. The company was allowed to pay the amount in 12 equal monthly installments, with a default provision for advertisement and publication.
( 1 ) THE respondent company is a tenant under the petitioning creditor at a monthly rent of Rs. 625-00 payable according to the English calendar month.
( 2 ) THE West Bengal Premises Tenancy Act, 1956 was repealed in the year 1997 and the same was replaced by the West Bengal Premises tenancy Act, 1997 as amended by Act of XIV of 2002. The said Act came into force w. e. f. July 10, 2001. Section 17 (4a) of the said Act reads as follows :-"17 (4a) where a tenancy subsists for twenty years or more in respect of the premises constructed in or before the year 1984 and used for commercial purpose, the fair rent shall be determined by adding to the rent as on 1. 7. 1976 five times or by accepting the existing rent if such rent is more than the increased rent determined under this sub-section. "
( 3 ) THE section quoted (supra) provides that where a tenancy subsist for 20 years or more in respect of a premises constructed in or before 1984 and used for commercial purpose the fair rent shall be determined by adding rent as on July 1, 1976 five times or by accepting the existing rent if such rent is more than the increased rent determined under the sub-section.
( 4 ) THE present tenancy was admittedly more than 20 years old premises constructed before 1984. The tenant was using the same for commercial purpose. Hence, the aforesaid three pre-requisites were admittedly fulfilled herein. Hence, under the sub-section quoted (supra) the landlord was entitled to rent six times to the rent paid on July 1,1976 (no rent was increased thereafter) from the date of the said Act coming into force being July 1,2001. The landlord demanded such rent. The company refused to pay the enhancement, however, paid the existing rent leaving an outstanding of Rs. 3125-00 being the difference of enhanced rent from July 2001 to May, 2004 amounting to Rs. 1,09,375-00. The respondent company was also bound to pay the maintenance and amenities as well as proportionate municipal tax under Section 5 (7) and 5 (8) of the said Act, 1997. According to the petitioning creditor the other tenants were paying such enhanced rent particulars whereof were set out in paragraph 10 of the petition. The petitioning creditor gave statutory notice of demand which was replied to by the company through its Advocate simply denying payment of the outstanding sum.
( 5 ) WINDING up petition was contested by the company by filing an affidavit. It was contended in the said affidavit that the petitioning creditor never approached the company for enhancement of payment of rent. On the contrary they continued to accept the existing rent. It was also contended that the petitioning creditor was not entitled to take recourse to Section 17 (4a) of the said Act, 1997.
( 6 ) MR. Promothonath Banerjee, learned senior Counsel appearing for the petitioning creditor, contended that Section 17 (4a) was clear and unambiguous and once the pre-requisites were fulfilled the enhancement of rent was a natural follow up and no further action was required to be taken by the company. It was contended that there was neither any bona fide nor any legal dispute raised by the company and as such the petitioning creditor was entitled to order of admission of winding up petition.
( 7 ) THE matter was heard initially on May 4, 2005 along with another winding up petition initiated by the same petitioning creditor on the identical facts against another tenant. The said matter was however disposed of by me by granting instalment to the said tenant to pay of the enhanced rent. The tenant now before me, however, did not agree to pay the same and the matter was time to time adjourned enabling the parties to settle the dispute outside the Court. No such settlement could take place. Hence, the matter was finally heard by me on the adjourned date being July 1, 2005 when hearing was concluded and judgment was kept reserved.
( 8 ) MR. Debangsu Basak, learned Counsel appearing for the company, contended t
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