IN THE HIGH COURT AT CALCUTTA
TARUN CHATTERJEE & SUBHRO KAMAL MUKHERJEE, JJ.
Budge Budge Company Limited
Versus
Jute Corporation of India Limited
G.A. No. 4030 of 1999 Suit No. 19 of 1993
Decided on : 16.2.2001
LANDLORD AND TENANT - RENT - SUSPENSION - DOCTRINE OF SUSPENSION OF RENT - APPLICABILITY - INTERFERENCE WITH ENJOYMENT OF PROPERTY BY TENANT - ENTITLEMENT TO SUSPENSION OF RENT.
Fact of the Case:
In 1986, the Jute Corporation of India (Corporation) was inducted as a tenant in certain godowns owned by Budge Budge Company Ltd. (Company). The Corporation was to pay rent at a specified rate and the Company was to ensure free movement of goods and necessary repairs to the approach road. In 1989, the Corporation informed the Company of its intention to release the godowns and sought confirmation that operations could be carried out during a lock-out. The Company replied that production was suspended but suggested the Corporation could operate with police help. The Corporation requested intervention from the District Magistrate to enable removal of its stocks. The Company admitted that there was a lock-out but requested the Corporation to continue paying rent. The Corporation denied liability for rent from March 1989, as it could not access the godowns due to the lock-out. The Company filed a suit for arrears of rent, which was partially decreed by the Trial Court.
Finding of the Court:
The Court held that the Corporation was entitled to suspension of rent for the period claimed by the Company. The Court found that the Company's employees had prevented the Corporation from removing its raw jutes and other materials, and that this constituted a substantial interference with the Corporation's enjoyment of the godowns. The Court also noted that the Company was liable to indemnify the Corporation in the event that the Corporation or its employees were not allowed free access to the godowns.
Issues: Whether the Corporation was liable to pay rent for the period during which it was unable to access the godowns due to a lock-out and obstruction by the Company's employees.
Ratio Decidendi: The Court held that the doctrine of suspension of rent applies in cases where there is a substantial interference by the landlord with the enjoyment of the property by the tenant. The Court found that the Company's employees had prevented the Corporation from removing its raw jutes and other materials, and that this constituted a substantial interference with the Corporation's enjoyment of the godowns. The Court also noted that the Company was liable to indemnify the Corporation in the event that the Corporation or its employees were not allowed free access to the godowns.
Final Decision: The Court dismissed the Company's appeal and allowed the Corporation's cross-objection. The Court held that the Corporation was not liable to pay rent for the period during which it was unable to access the godowns due to a lock-out and obstruction by the Company's employees.
SUBHRO KAMAL MUKHERJEE, J.
1. This appeal is directed against a judgment and decree dated September 15, 1998 passed by a Learned Judge of this Court inter alia, decreeing the suit in part.
2. By a letter dated August 19, 1986, the Jute Corporation of India Limited (in short the Corporation) was inducted by Budge Budge Company Ltd. (hereinafter referred to as the Company) as a tenant in respect of certain godowns, particulars of which have been mentioned in the plaint. The subject godowns are admittedly situated within the Mill premises of the Company for storage of raw jute stocks. Initially, the Corporation was inducted as a monthly tenant for a period of two years. One of the terms in the aforesaid was that the Company would make arrangement at their cost to ensure free movement of loaded lorries carrying on jute stock through the main gate of the Mill premises and also make arrangement for necessary repairs to the approach road connecting the Mill premises with the road outside besides the roads within the premises. A clause was also incorporated in the letter that the Company shall indemnify the Corporation in full against the loss, if any, which the Company might be called upon to incur if the labourers of the Corporation were not allowed to work inside the Mill premises. By a letter dated November 30, 1998, the Corporation intimated the Company that they had intended to release the godowns sheds on rent on and from February 28, 1989. On March 21, 1989 the Corporation addressed a letter to the Company indicating that it had learnt from Press Report that a lock-out was declared in the Mill premises and for that it was not possible for the Corporation to remove their materials stocked in their godowns and requested the Company to confirm in writing, if it was possible to carry out operations during the lock-out period. In reply to the said letter, the Company informed the Corporation by a letter dated March 28, 1989 that there was no lock-out but the production process of the Mill was suspended with effect from March 18, 1989. However, it was suggested by the Company that the Corporation might operate from the said godowns with help of police. By a letter dated May 10, 1989 the Marketing Manager of the Corporation informed the District Magistrate, South 24 Paraganas that the Corporation's deposit and withdrawal operations at the Mill premises were suspended due to unrest created by the labourers of the Company and, therefore, sought for intervention of the District Magistrate and help to enable the Corporation to remove its stocks lying locked in the Mill premises without any resistance from the agitating labour force on or before May 31, 1989. In a letter dated July 4, 1989, the Chairman of the Company, however, admitted that there was a lock out in the Mill premises but at the same time requested the Corporation to ensure that the rents payable by them should be paid to the Company. Since the Corporation was not getting access to the godowns, on April 11, 1990, it requested the Officer-in-charge, Budge Budge Police Station to ensure that the law and order was maintained at the time of removing the materials from the Mill premises and to see that the lorries of the Corporation were not prevented from carrying out the job. Ultimately, the Corporation by a letter dated April 19, 1990 recorded that because of the declaration of lock out the operations of the Corporation in the Mill premises came to a hault and the Corporation could not lift its stocks and could not release the godown, earlier. The Corporation, therefore, denied its liability to pay rent with effect from March, 1989. On April 20, 1990, the representatives of the Corporation went to the Mill premises when the labourers of the Company prevented them from removing the raw jutes and that was recorded by a letter addressed to the Officer-in-Charge, Budge Budge Police Station. Ultimately, a suit was instituted by the Corporation in this Court and a Receiver wa
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