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IN THE HIGH COURT OF CALCUTTA
Indira Banerjee and Tapabrata Chakraborty, JJ.
Rajasthan Fertilizers and Chemicals Corporation Limited - Appellant
Versus
Vijaya Bank – Respondent
F.A. No. 391 of 2008
Decided on : 14-03-2014
For the Appellant :Mr. Arindam Banerjee, Mr. Bhaskar Mukherjee, Ms. Debjani Ghosh and Ms. Deboshree Saha, Advocates.
For the Respondent:Mr. Amitava Das, Mr. Manoj Kr. Singh, Mr. N. Srinivas, Mrs. Suparna Biswas, Advocates.
The burden of surcharge as part of "consolidated rate" is only on the person putting the premises to non-residential or commercial use.
Headnote:
SURCHARGE - PAYMENT - COMMERCIAL USE - LIABILITY OF OCCUPIER - CMC ACT, 1980 - S.178(6) - SURCHARGE AS PART OF CONSOLIDATED RATE OR TAX - LIABILITY ONLY ON PERSON PUTTING PREMISES TO NON-RESIDENTIAL OR COMMERCIAL USE - OCCUPIER LIABLE TO PAY SURCHARGE TO CORPORATION OR TO OWNER ON DEMAND FOR DEPOSIT TO CORPORATION - OWNER LIABLE TO DEPOSIT AMOUNT WITH CORPORATION - FAILURE TO DO SO EXPOSES OWNER TO RISK OF RECOVERY AND PENAL PROCEEDINGS.
Fact of the Case:
Appellant, the owner of a property, filed a suit against the respondent, the occupier of the said property, for recovery of a sum of Rs.3,36,384/- being surcharge imposed by the Calcutta Municipal Corporation (CMC) on the property for the period from April 01, 1984 to March 31, 2000. The appellant claimed that the respondent was liable to pay the surcharge as it was the occupier who had put the premises to non-residential and commercial uses. The respondent contended that the appellant, being the owner, was primarily liable to pay the surcharge and that the respondent was only liable to reimburse the appellant.
Finding of the Court:
The court held that the burden of surcharge as part of "consolidated rate" is only on the person putting the premises to non-residential or commercial use. It is the occupier who is solely responsible for payment of surcharge to the Corporation since the occupier puts the occupied portion of the premises into commercial use. The court further held that the respondent, being the occupier of the said premises for the period from April 01, 1984 to March 31, 2000, during which the demand for payment of surcharge was made, was liable to pay the said amount of surcharge as quantified to be Rs.3,36,384/-.
Issues: 1. Whether the appellant, being the owner of the property, was primarily liable to pay the surcharge imposed by the CMC? 2. Whether the respondent, being the occupier of the property, was liable to pay the surcharge as it had put the premises to non-residential and commercial uses?
Ratio Decidendi: The court relied on the judgment of the Supreme Court in Calcutta Gujrati Education Society and Anr. v. Calcutta Municipal Corporation and Ors., AIR 2003 Supreme Court 4278, which held that the burden of surcharge as part of "consolidated rate" is only on the person putting the premises to non-residential or commercial use. The court also relied on the judgment of this Court in Satish Chandra Agarwalla & Ors. v. State Bank of India & Anr., AIR 1988(1) CLJ page 536, which held that the real and ultimate liability to pay surcharge is of the occupier who uses the premises for commercial purpose or non-residential purpose.
Final Decision: The court set aside the judgment and decree of the lower court and decreed the suit in favor of the appellant.
Tapabrata Chakraborty, J.
This appeal arises out of a judgment and decree dated 26th June, 2007 passed by the Learned Judge, Bench-VII, City Civil Court, Calcutta in Money Suit No.104 of 2001.
2. The appellant herein preferred a suit for recovery of a sum of Rs.3,36,384/- being Money Suit No.104 of 2001 stating inter alia that by a lease deed dated July 27, 1983, the appellant let out to the respondent one office block measuring about 2245 square feet on the 2nd floor at premises 19 R.N. Mukherjeee Road, Calcutta- 700 001 (hereinafter referred as the said premises) for a period of five years with effect from November 01, 1982 at a monthly rate of Rs.15,715/- with an option for renewal for a further period of five years and that after the lapse of the said term of five years and the period of option for renewal for a further period of 5 years, a fresh lease of deed dated May 19, 1993, in respect of the said premises, was executed by the appellant in favour of respondent herein. It was further averred that with effect from April 01, 1984, the Calcutta Municipal Corporation (hereinafter referred to as CMC) imposed a surcharge at the rate of 50% of the consolidated rate towards user of the premises for commercial and/or non-residential purpose and that such surcharge is payable only by the person putting the premises to non-commercial use. The appellant demanded the said surcharge, as quantified by a certificate of allocation issued by CMC on 3rd May, 2000 from the respondent herein by letter dated July 20, 2000 and that even after the receipt of the said letter and a further reminder dated September 19, 2000, the respondent did not exhibit any inclination to pay the said quantified amount of Rs. 3,36,384/-. The appellant, therefore preferred the suit for recovery of the said sum.
3. The respondent entered appearance in the said suit and filed a written statement controverting the allegations made in the plaint and stating inter alia that by an agreement dated July 10, 1993, Hanuman Estates Limited, the superior Lessor had let out the said premises to the appellant on lease conferring a right upon the said appellant to assign and or sub-let its lease hold interest in the said premises without any consent from the superior Lessor and that on the rudiments of such right, the appellant in the capacity of a Lessor inducted the respondent as a lessee in the said premises for a period of 10 years, commencing from 1st October, 1992, by a deed of lease dated May 19, 1993. It was further averred that prior to the said agreement dated 1st October, 1992, the appellant and the respondent herein also entered into an agreement dated July 27, 1983, for a period of ten years, which expired on 31st September, 1992.
4. The primary defence of the respondent was that, in terms of Clause 1(g) of the lease deed dated May 19, 1993, the appellant had the primary liability to pay the taxes to the CMC and that as the earlier lease deed dated July 27, 1983 had expired on September 31, 1992, none of the parties to the said deed are bound by the covenants contained in the same which had admittedly expired and that the lease deed dated 19th May, 1993 did not have any clause which attracts any of the provisions of the expired lease.
5. To corroborate the contents of the plaint, deposition was tendered by Sri Becharam Chatterjee, Law Assistant of the appellant and that on behalf of the appellant reliance was placed upon the registered deed of lease dated May 19, 1993 as Exhibit-1, the certificate of allocation of surcharge issued by CMC as Exhibit- 3, the letters of the appellant to the respondent dated September 19, 2000 and October 09, 2000 as Exhibit nos.4 and 5 and the letter dated December 01, 2000 issued by the Learned Advocate on behalf of the appellant as Exhibit-6.
6. To corroborate the contents of the written statement deposition was tendered by Sri K. Radha Krishna Rai, the Senior Branch Manager of the respondent as DW1 and in course of such cross
