2013 Supreme(Cal) 763
High Court of Judicature at Calcutta
ASHIM KUMAR BANERJEE & DEBANGSU BASAK, JJ.
Jay Shree Tea & Industries Limited
Versus
General Magnets Limited
A.P.D. No. 18 of 2010 & C.S. No. 17 of 2001 (Original Side)
Decided On : 29-11-2013
For the Appellant:Samit Talukdar, Senior Advocate, Suman Dutta, Advocate.
For the Respondent:Anindya Kumar Mitra, Senior Advocate, Dhruba Ghosh, Abhrajit Mitra, P.K. Saraogi, Advocates.
A clause in a tenancy agreement providing for periodic review of rent is not vague and can be enforced by the Court. The Civil Court has jurisdiction to fix the enhanced rent in case of disagreement between the parties, if the clause in question is specific and does not specifically bar such fixation by the Court.
Headnote:
LANDLORD-TENANT - RENT ENHANCEMENT - INTERPRETATION OF CLAUSE - JURISDICTION OF CIVIL COURT - [SECTION 4, 6, 10, WEST BENGAL PREMISES TENANCY ACT, 1956] - The Court interpreted a clause in a tenancy agreement providing for periodic review of rent as a specific and enforceable term. It held that the clause was not vague and could not be rendered nugatory on the plea of vagueness. The Court also held that the Civil Court had jurisdiction to fix the enhanced rent in case of disagreement between the parties, as the clause in question was specific and did not specifically bar such fixation by the Court.
Fact of the Case:
The appellant, a tenant, challenged the decree of a Single Judge fixing enhanced rent for a godown leased from the respondent landlord. The appellant contended that the clause in the tenancy agreement providing for periodic review of rent was vague and could not be enforced, and that the Civil Court lacked jurisdiction to fix the enhanced rent.
Finding of the Court:
The Court held that the clause in the tenancy agreement was specific and enforceable, and that the Civil Court had jurisdiction to fix the enhanced rent in case of disagreement between the parties.
Issues: 1. Whether the clause in the tenancy agreement providing for periodic review of rent was vague and could not be enforced. 2. Whether the Civil Court lacked jurisdiction to fix the enhanced rent.
Ratio Decidendi: 1. The Court held that the clause in the tenancy agreement was not vague and could not be rendered nugatory on the plea of vagueness. It observed that the clause was specific and made a definite proposition that the parties agreed to have a review of revision of rent with every 10 years interval. 2. The Court held that the Civil Court had jurisdiction to fix the enhanced rent in case of disagreement between the parties. It observed that the clause in question was specific and did not specifically bar such fixation by the Court.
Final Decision: The appeal was dismissed with no order as to costs.
Ashim Kumar Banerjee, ACJ.
General Magnets Limited was the owner of a plot of land situated at Rampur, Budge Trunk Road 24 parganas (South). On the said land, a godown measuring about 63756 square feet was given to Jay Shree Tea and Industries Limited the appellant above named on monthly tenancy by the respondent. The tenancy agreement was subsisting since 1966. The rent was time to time enhanced. Last enhancement was made with effect from April 1, 1990 at the rate of 39 paise per square feet. The agreement for increase would appear from a minutes of the meeting held on February 16, 1991 appearing at page 43. Clause 4 would provide as follows:
“The revision of rent will be reviewed every 10 (ten) years by both parties prospectively.” There was further tenancy in respect of another godown measuring about 7500 square feet.
After expiry of 10 years the respondent landlord wrote to the appellant for revision of rent that the appellant denied by their letter dated May 15, 2000 appearing at page 45. The contents are quoted below:
“This is to inform you that it is a fact our meeting was held on 16th February, 1991 at our office and it was agreed that revision of rent will be reviewed every after ten years prospectively. But since uauthorised/illegal construction has been made by you in the year 1999 by digging the wall of our tenanted godown and as a result of which our godown has become insecure as well as we are facing a lot of difficulties and/or obstruction for parking our Goods-vehicles due to the aforesaid illegal/unauthorized construction.
Finding no other alternative, we had to file a suit against you and the matter is subjudice.
Therefore, the question of review of the rent at this stage does not arise.”
The respondent thus filed a suit for recovery of enhanced rent for the period April 2000 to December 2000. The respondent also prayed for a declaration that the defendant tenant was liable to pay the enhanced rent from April 2000. The appellant/defendant did not contest the suit despite opportunity being given; they did not file any written statement. Simultaneously on filing of the suit the respondent filed an application for a direction upon the appellant to pay rent at the rate of Rs.6 per square feet and alternatively, for appointment of a Commissioner to find out appropriate rent after enhancement. By an order dated January 18, 2001 the Learned Single Judge appointed a Commissioner to investigate as to the market rate of rent payable in and around the premises in question and suggest the enhanced rent. The Commissioner accordingly submitted his report on February 15, 2001 suggesting rent between 5 to 6 rupees per square feet. The defendant prayed for setting aside of the report of the Commissioner. The learned Single Judge fixed the revised rent at Rs.3.50 per square feet. The defendant filed an appeal; plaintiff also filed cross-objection. The Division Bench asked the defendant to pay at the said rate without prejudice to their rights and contention in the suit. Since then, the appellant/defendant had been paying rent at the same rate. The defendant prayed for time to file written statement that the Apex Court ultimately rejected vide order dated November 23, 2007. The Division Bench however, permitted the appellant/defendant to cross examine the plaintiff’s witness.
In this backdrop, the learned Single Judge heard the suit. The plaintiff produced two witnesses being the representative of the defendant and the Commissioner. The appellant did not object to the Commissioner’s report being tendered in evidence. They were unsuccessful in dislodging the assertion made on behalf of the plaintiffs with regard to the rent fixed by the Commissioner. The Commissioner also could not be shaken during cross-examination as we find from his deposition. The learned Judge decreed the suit as prayed for, hence this appeal.
Mr. Samit Talukdar, learned Senior Counsel appearing for the appellant would raise two issues:
i) The Cl