In determining the fair market rent/occupational charges for a commercial property subject to a license agreement, the court may consider factors such as the location, extent of built-up area, nature and character of the land, and comparable rents in the vicinity. An agreed figure mentioned as pre-determined liquidated damages in the agreement can be taken as the upper limit for assessing occupational charges, subject to the provisions of Section 74 of the Contract Act.

JUDGMENT

Arijit Banerjee, J. - This is an application for stay of operation of the judgment and decree dated September 30, 2020, whereby Title Suit No. 134 of 2016 was decreed on contest by the learned Civil Judge (Senior Division), Sealdah, South 24-Parganas. The defendants were directed to deliver vacant peaceful possession of the suit property to the plaintiffs within 4 months from the date of the decree, failing which the plaintiffs were granted liberty to execute the decree. The plaintiffs were further given liberty to initiate separate proceedings under Order 20 Rule 12 of the Code of Civil Procedure for determination of mesne profits.

2. The defendants have come up in appeal and have filed the present application for stay of operation of the decree.

3. The appellants argued that they got possession of the land in question under an agreement of lease although the same may have been described as a license agreement. Nomenclature is irrelevant. The substance of the agreement and the nature and character of possession has to be taken into account to decide whether the person in occupation/possession is a tenant or a licensee.

4. We will consider the aforesaid point at the hearing of the appeal. The only question now is whether we should allow the stay application and if so, on what terms, if any.

5. Having heard learned Counsel for the parties, we are of the view that the appellants have raised a substantial question of law which needs to be decided. However, we are told that the appellants have not paid any rent/license fee/occupational charges to the respondents for a very long time. Hence, we are inclined to put the appellants on terms as a pre-condition for stay of operation of the decree in question.

6. According to the respondents/decree holders/plaintiffs, and as per the case pleaded in the plaint, the land in question, measuring about 13 Cottahs 5 Chittacks is comprised in Premises No. 9/2, Topsia Road (South), Kolkata. Mr. Ashok Kumar Banerjee, learned Senior Advocate appearing for the respondents made the following submissions;-

(i) Mr. Banerjee drew our attention to a document at page 71 of the paper book which is a photocopy copy of a document described as 'DEED OF LEAVE AND LICENCE' dated September 6, 2007, executed by and between the plaintiffs and the Defendant No. 1. In particular, our attention was drawn to Clause 12 of that document which reads as follows:-

'12.After the expiry of the agreement (i.e. 24 months) if the Licensee shall fail to vacate the said premises in that event in addition to such other right which the Licensor may have against Licensee, the Licensor shall be entitled to and the Licensee agrees to pay the Licensor to damages at the rate of Rs. 7500/- Only (seven Thousand five hundred) per day, as and by way of predetermined liquidated damages till the peaceful.'

Obviously the words 'vacant possession of the said premises is made over to the Licensor', have been not printed by mistake.

Learned Senior Counsel submitted that the parties themselves stipulated in the agreement, pre-determined liquidated damages in the event of failure on the part of the defendants to vacate the suit premises upon expiry of the license agreement which was for 24 months. Hence, the defendants should pay occupational charges at the rate indicated in clause 12 of the agreement till the disposal of the appeal as a pre-condition for stay of operation of the decree of eviction.

(ii) Learned Senior Counsel submitted that the land is situated in a prime commercial area. He relied on a report captioned 'CALCULATION OF PRESENT FAIR MONTHLY OCCUPANCY CHARGES BASED UPON CURRENT MARKET VALUATION', dated November 8, 2022, prepared by one Sri Banibrata Mukherjee, Chartered Engineer. In the said report, the Engineer, Commissioner and valuer has adopted 2 alternative methods for arriving at the fair monthly occupational charges. The first is the 'Annual equivalent of income method from circle rate'. Following this method, the valuer has a