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2025 Supreme(Online)(Cal) 1184
CALCUTTA HIGH COURT
Arijit Banerjee, Om Narayan Rai, JJ
ATC INDIA ELECTRONICS PVT LTD – Appellant
Versus
FROSTEES EXPORT INDIA PVT LTD AND ANR – Respondent
FMAT 76 / 2025
For the Appellants/Petitioners: Probal Mukherjee, Arnab Roy, Satyam Mukherjee, Sayani Ahmed
For the Respondents: Joydeep Kar, Aniruddha Chatterjee, Sachetan Ghosh, I. Munshi
An occupant of commercial property must compensate the owner for use and occupation, regardless of ongoing litigation regarding status or quality of upkeep, to prevent unjust enrichment; courts possess inherent powers to issue interim directions for such payments.
Headnote:(A) Code of Civil Procedure, 1908 - Order 39 Rules 1, 2 and 10 - Interim directions - Payment of occupational charges - An occupant of a commercial property cannot be permitted to enjoy the property without compensating the owner, regardless of disputes regarding the nature of the legal status of the occupant. (Paras 17, 21)
(B) Interim Orders - Discretionary power - When there is a dispute concerning the maintenance obligations and the quality of property upkeep, a court may direct that maintenance charges be deposited with the court rather than paid directly to the owner, pending the final adjudication of the suit. (Paras 20, 21)
Facts of the case:
The appellant, a former licensee of a commercial premise, continued its occupation after the expiration of the agreement. The respondent (owner) approached the court for recovery of possession and arrears of occupational and maintenance charges. The trial court directed the appellant to pay substantial arrears and current monthly charges. The appellant appealed, contending that the trial court's order essentially pre-judged the merits of the dispute regarding the occupant's status as a tenant or licensee, and that the court lacked authority under the relevant procedural rules to pass such a monetary order at the interlocutory stage.
Findings of Court:
The court observed that while the legal status of the occupant remained contested, the fact of continued commercial usage without payment was undisputed. It held that the principle against unjust enrichment requires that the property owner be compensated for the occupation. Accordingly, the court modified the lower court order, directing the payment of occupational charges to the owner and the deposit of disputed maintenance charges into court until the trial concludes.
Issues: 1. Whether an appellate court can order the payment of occupational and maintenance charges in an interim injunction application while the status of the occupant (tenant vs. licensee) is under dispute. 2. Whether the lack of maintenance service can justify the withholding of entire occupation and maintenance charges.
Ratio Decidendi: An occupant utilising a commercial property is legally obligated to compensate the owner regardless of pending disputes over their precise legal status or the quality of service, as permitting free usage would constitute unjust enrichment. However, where specific service obligations are contested, such charges may be deposited with the court rather than paid directly to the owner.
Result: Appeal allowed in part; the impugned order of the trial court was modified.
Arijit Banerjee, J. :-
1. By consent of the parties, the appeal and the connected application are taken up together for hearing.
2. Being aggrieved by an order dated February 05, 2025, passed by the learned Judge, Commercial Court at Rajarhat, North 24 Parganas, on an application of the respondent no. 1 herein in a suit filed by it being TS(COM) - 93/2024, the defendant no. 1 in the suit has come up by way of this appeal.
3. The appellant was a lessee in respect of the suit premises under the respondent no. 1 herein. A lease deed had been executed in the year 2016.
4. It appears that subsequently the lease expired by efflux of time and the appellant continued to be in possession of the suit premises under an agreement described as one for “Leave and Licence” executed on January 01, 2023 by and between the parties.
5. The agreement stated that the appellant herein (described as licensee) was granted permission by the licensor being the respondent no. 1 herein, to occupy the suit premises for 6 months starting on January 01, 2023 and ending on June 30, 2023. It was further stipulated in the agreement that the licensee shall pay license fee of Rs. 3,25,500/- and monthly maintenance charge of Rs. 4,49,500/- to the licensor in advance within the 7th day of each English calendar month.
6. It may be mentioned here that during the subsistence of the lease, an agreement had been executed by and between the appellant and the respondent no. 1 herein, on August 25, 2016, for maintenance of the suit premises which was being and still is being used for commercial purpose of running a motorcycle showroom. The said agreement was coterminous with the lease agreement. Although the maintenance agreement was not formally renewed or no fresh maintenance agreement was executed by and between the parties when the license agreement was executed, it is obvious from the conduct of the parties that they proceeded on the basis that the maintenance agreement was still operative. Under the maintenance agreement, the landlord (respondent no.1) was obliged to maintain properly the premises/infrastructure and all the fittings in the manner it had been handed over as per the licensee’s satisfaction. It was also provided that the landlord was responsible for “any repairing and whitewashing on the front portion of the said building”.
7. The respondent No. 1 filed the aforesaid suit against the appellant herein on or about April 16, 2024, for recovery of possession of the suit premises and money decree to the tune of Rs. 64,05,100/- on account of alleged outstanding occupational charge for the period September 01, 2023 till March 31, 2024. A claim for damages assessed at Rs. 1 crore tentatively is also there in the plaint.
8. On an injunction application moved by the respondent no.1/ plaintiff under Order 39 Rules 1, 2 and 10 of CPC read with section 151 thereof, initially an ad-interim order of injunction was passed restraining the defendant no. 1 in the suit (present appellant) and/or its representatives from dealing with, transferring, alienating, encumbering, subleasing, letting out, causing any damage to or creating any third party right in respect of the suit premises till disposal of the suit. By the order impugned in this appeal, the learned Judge confirmed the ad interim order of injunction and further directed as follows:-
“The Defendant/Respondent is directed under Order 39 Rule 10 read with Section 151 of the CPC, to pay the maintenance charges and occupational charges of Rs. 3,25,500/- + Rs. 4.49,500/- i.e. the Rs. 7,75,000/- respectively per month from February 2025 by the 10th day of each calendar months for every succeeding month till the disposal of the suit.
The Defendant/Respondent is also directed under Order 39 Rule 10 read with Section 151 of the CPC, to pay the arrear maintenance charges and occupational charges of Rs. 3,25,500 + Rs. 4,49,500/- i.e. the Rs. 7,75,000/- for each month for the period of September, 2023 till Janu
