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The Lease Agreement is not registered – there is clear understanding about rate of rent and terms and conditions of lease between the parties evidencing correspondences – suit for recover of rent is maintainable – pending case, Bank vacated some portion of building – Bank directed to hand over the possession with out any suit for recovery = GULAB CHAND BHORA & ORS. … APPELLANT (S) VERSUS PUNJAB NATIONAL BANK & ANR. … RESPONDENT (S) = Published in http://judis.nic.in/supremecourt/imgst.aspx?filename=40957

The Lease Agreement is not registered – there is clear understanding about rate of rent and terms and conditions of lease between the parties evidencing correspondences – suit for recover of rent is maintainable – pending case, Bank vacated some portion of building – Bank directed to hand over the possession with out any suit for recovery =

The appellants-plaintiffs are the owners of the  premises  which  were

let out to the respondent-bank.  

The  aforesaid  tenancy  was  on  the  basis  of  an  unregistered

agreement between the parties effective from 01.06.1978 for a  period  of  6 years with the option of continuance of the tenancy for a further period  of 5 years.  

The monthly rent was agreed between the parties at Rs.2200/-.   

By

mutual agreement, the tenancy continued on expiry of  the  initial  5  years

thereof until 30.06.1989.   

 Thereafter,  the

regional building committee of the bank in its meeting  held  on  05.07.1993

also recommended renewal of the lease agreement  at  the  enhanced  rent  of

Rs.2/- per square feet for a period of 5 years with effect from the date  of

expiry of the earlier agreement i.e.  01.07.1989  and,  thereafter,  further

enhancement of rent at the rate of 45% for an additional period of 5  years.

  The aforesaid  recommendation  of  the  regional  building  committee  was

signed by the Manager (GAD), Senior Manager as well as the Regional  Manager

of the defendant-bank.

 

5.     It  appears  that  notwithstanding  the  above,  the   defendant-bank

continued to occupy the premises on payment of rent at the old  rate.   

This

led the appellants to institute Money Suit No.143 of 1994 claiming a  decree

of Rs.9,46,892.50/- being the balance of the arrears of rent  calculated  at

the rate of Rs.2/- per  square  feet  for  the  period  from  01.07.1989  to

30.06.1994 and, thereafter, for the period from 01.07.1994 upto the  end  of

the month of November, 1994 (suit was filed on 23.11.1994) at  the  rate  of

Rs.2.90/- per square feet.  

Along with the aforesaid amount, the appellants-

plaintiffs had also prayed for grant of interest at  the  rate  of  12%  per

annum. =

The demand raised by the appellants-plaintiffs for enhanced  rent  and acceptance thereof by the bank authorities as  evident  from  the  documents

dated 12.11.1990 and 05.07.1993, in our considered view,  reflects  a  clear understanding between the parties that the tenancy agreement would  continue at an  enhanced  rent  of  Rs.2/-  per  square  feet  for  the  period  from 01.07.1989 to 30.06.1994 and thereafter at further enhanced rent of 45%  for the next 5 years.  

Abundant materials had been  brought  on  record  by  the

appellants-plaintiffs to show that the  claim  for  enhanced  rent  for  the

premises and the understanding reached was in tune with or  even  less  than

the prevailing market rate of rent in respect of similar premises.  

If  the

above is the basis on which the Trial Court had thought  it  fit  to  decree the suit of the appellants-plaintiffs we do not see how the High  Court  can be found to be justified in reversing the  said  decree  and  requiring  the appellants-plaintiffs to move the Rent Controller for fixing the  fair  rent of the premises.  

The exercise directed by the High  Court  was,  therefore,

wholly unnecessary besides being inequitable and litigious.  It should  have

been best avoided. 

We, therefore,  consider  it  proper  to  set  aside  the

judgment dated 08.02.2008 and the decree  dated  28.01.2008  passed  by  the

High Court of Calcutta and  restore  the  decree  dated  11.02.1999  of  the

learned Trial Court. 

The appellants-plaintiffs would now be entitled to  the

amount decreed by the learned Trial Court and  also  rent  at  the  enhanced

rate of Rs.2.90/- with effect from 01.07.1999  till  the  present  date  and

until mutually altered.  

In so far as the claim of  interest  is  concerned,

in the peculiar facts of the case, we decline the same.

 

12.   Before parting, we would like to observe that  during  the  course  of

hearing of the appeals it became known that the bank has no further need  to

retain the second  floor  of  the  tenanted  premises  in  view  of  certain

subsequent facts and events  that  have  occurred  during  the  pendency  of

present appeals.  

In the above situation we do not consider it necessary  to

require the appellants-plaintiffs to approach  the  court,  once  again,  to

recover possession of the second floor of the tenanted  premises  which  the

bank admittedly is ready and willing to surrender.   

We,  therefore,  direct

the respondent-bank to act accordingly in so far as the second floor of  the

tenanted premises is concerned within a period  of  three  months  from  the

date of receipt of this order.

 

13.   With the above observations, both the appeals shall stand disposed  of

in the manner indicated above.

 

NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 9677-9678 OF 2011
GULAB CHAND BHORA & ORS. … APPELLANT (S)

VERSUS

PUNJAB NATIONAL BANK & ANR. … RESPONDENT (S)

 

J U D G M E N T

RANJAN GOGOI, J.

1. Delay in filing the application for substitution is condoned.

2. Application for substitution is allowed.

3. Aggrieved by the reversal of the decree passed in their favour by the
learned Trial Court and the dismissal of the cross objection filed, the
plaintiffs have filed the present appeals.

4. The appellants-plaintiffs are the owners of the premises which were
let out to the respondent-bank. The area of the tenanted premises measures
7565 square feet located on the ground, first and second floor of a
building situated in Ward No.13 of Kharagpur Town in the State of West
Bengal. The aforesaid tenancy was on the basis of an unregistered
agreement between the parties effective from 01.06.1978 for a period of 6
years with the option of continuance of the tenancy for a further period of
5 years. The monthly rent was agreed between the parties at Rs.2200/-. By
mutual agreement, the tenancy continued on expiry of the initial 5 years
thereof until 30.06.1989. Thereafter, the appellants-plaintiffs claimed
enhanced rent at the rate of Rs.3/- per square feet. It appears that the
Senior Manager of the defendant Bank and the plaintiffs arrived at a mutual
settlement for enhancement of the rent to Rs.2/- per square feet. This was
on 12.11.1990. However, the higher authority in the Bank disowned the
authority of the Senior Manager to take such a decision. Thereafter, the
regional building committee of the bank in its meeting held on 05.07.1993
also recommended renewal of the lease agreement at the enhanced rent of
Rs.2/- per square feet for a period of 5 years with effect from the date of
expiry of the earlier agreement i.e. 01.07.1989 and, thereafter, further
enhancement of rent at the rate of 45% for an additional period of 5 years.
The aforesaid recommendation of the regional building committee was
signed by the Manager (GAD), Senior Manager as well as the Regional Manager
of the defendant-bank.

5. It appears that notwithstanding the above, the defendant-bank
continued to occupy the premises on payment of rent at the old rate. This
led the appellants to institute Money Suit No.143 of 1994 claiming a decree
of Rs.9,46,892.50/- being the balance of the arrears of rent calculated at
the rate of Rs.2/- per square feet for the period from 01.07.1989 to
30.06.1994 and, thereafter, for the period from 01.07.1994 upto the end of
the month of November, 1994 (suit was filed on 23.11.1994) at the rate of
Rs.2.90/- per square feet. Along with the aforesaid amount, the appellants-
plaintiffs had also prayed for grant of interest at the rate of 12% per
annum.

6. The claim in the suit was resisted by the defendant-bank contending
that there was no fresh agreement between the parties on expiry of the
earlier tenancy on 30.06.1989. According to the defendants, the demand for
enhanced rate raised by the appellants-plaintiffs; the decision dated
12.11.1990 and the recommendations of the regional building committee dated
05.07.1993 did not give rise to any concluded agreement between the parties
in order to entitle the appellants-plaintiffs to the reliefs claimed in the
suit.

7. The learned Trial Court, after noticing the respective stand of the
parties; the evidence brought on record and after specifically taking note
of the stand taken before it on behalf of the defendant-bank that the bank
was ready to pay the rent as per the recommendations dated 05.07.1993 of
the regional building committee, by its judgment dated 11.02.1999 thought
it fit to decree the suit for enhanced rent at the rate of Rs.2/- per
square feet for the period from 01.07.1989 to 30.06.1994 and further at the
rate of Rs.2.90/- from 01.07.1994 to 30.06.1999. However, for the reasons
assigned by the learned Trial Court, the claim of interest was declined.
It may be specifically noticed that the learned Trial Court while decreeing
the suit as aforesaid took into account the recommendation of the regional
building committee which document was duly exhibited in the suit (Exbt.20).

8. Aggrieved by the decree of the learned Trial Court dated 11.02.1999
the Bank filed an appeal before the High Court. In the said appeal the
appellants filed their cross-objections as against the refusal of interest.
The High Court by its impugned judgment and decree dated 08.02.2008 and
28.01.2008 respectively set aside the decree passed by the learned Trial
Court leaving it open to the appellants-plaintiffs to move the Rent
Controller for fixation of fair rent for the premises in question.
Consequently, the cross-objection filed by the appellants was dismissed.
In doing so, the High Court came to the conclusion that as there was no
concluded contract between the parties with regard to enhanced rent on
expiry of the period of the lease, it is only the Rent Controller under the
Tenancy Act who could have determined the fair rent of the premises. The
High Court, therefore, left it open to the appellants-plaintiffs to move to
the Rent Controller. Aggrieved by the aforesaid reversal of the decree
passed in their favour and the dismissal of the cross-objection, the
present appeals have been filed.

9. We have heard learned counsel for both the parties.

10. From the several documents exhibited in the suit by the appellants-
plaintiffs, it is clear that prior to the expiry of the lease the
appellants-plaintiffs had given notice(s) for continuance of the tenancy at
the enhanced rate(s) claimed therein. The rent, as claimed, was on the
basis of the rent prevailing in the locality where the premises was
located. Of particular significance would be the minutes of the meeting
held between the Senior Manager of the bank and the appellants-plaintiffs
on 12.11.1990 wherein the rent of premises was agreed at the rate of Rs.2/-
per square feet with effect from 01.07.1989. Though the Bank appears to
have denied the authority of the Senior Manager to sign the said minutes,
as already noticed, the regional building committee of the Bank in its
meeting held on 05.07.1993 had, once again, favoured renewal of the tenancy
at the rate of Rs.2/- per square feet for the initial period of 5 years and
thereafter at an enhanced rate of 45% for an additional period of 5 years.
The aforesaid admitted documents proved in the course of trial of suit were
relied upon by the learned Trial Court to come to the finding that the
appellants-plaintiffs were entitled to enhanced rent in terms of the
recommendation of the regional building committee dated 05.07.1993.
Accordingly, the suit was decreed, however, without any interest.

11. The demand raised by the appellants-plaintiffs for enhanced rent and
acceptance thereof by the bank authorities as evident from the documents
dated 12.11.1990 and 05.07.1993, in our considered view, reflects a clear
understanding between the parties that the tenancy agreement would continue
at an enhanced rent of Rs.2/- per square feet for the period from
01.07.1989 to 30.06.1994 and thereafter at further enhanced rent of 45% for
the next 5 years. Abundant materials had been brought on record by the
appellants-plaintiffs to show that the claim for enhanced rent for the
premises and the understanding reached was in tune with or even less than
the prevailing market rate of rent in respect of similar premises. If the
above is the basis on which the Trial Court had thought it fit to decree
the suit of the appellants-plaintiffs we do not see how the High Court can
be found to be justified in reversing the said decree and requiring the
appellants-plaintiffs to move the Rent Controller for fixing the fair rent
of the premises. The exercise directed by the High Court was, therefore,
wholly unnecessary besides being inequitable and litigious. It should have
been best avoided. We, therefore, consider it proper to set aside the
judgment dated 08.02.2008 and the decree dated 28.01.2008 passed by the
High Court of Calcutta and restore the decree dated 11.02.1999 of the
learned Trial Court. The appellants-plaintiffs would now be entitled to the
amount decreed by the learned Trial Court and also rent at the enhanced
rate of Rs.2.90/- with effect from 01.07.1999 till the present date and
until mutually altered. In so far as the claim of interest is concerned,
in the peculiar facts of the case, we decline the same.

12. Before parting, we would like to observe that during the course of
hearing of the appeals it became known that the bank has no further need to
retain the second floor of the tenanted premises in view of certain
subsequent facts and events that have occurred during the pendency of
present appeals. In the above situation we do not consider it necessary to
require the appellants-plaintiffs to approach the court, once again, to
recover possession of the second floor of the tenanted premises which the
bank admittedly is ready and willing to surrender. We, therefore, direct
the respondent-bank to act accordingly in so far as the second floor of the
tenanted premises is concerned within a period of three months from the
date of receipt of this order.

13. With the above observations, both the appeals shall stand disposed of
in the manner indicated above.
…………..………………………J.
[H.L. GOKHALE]

 
…………..………………………J.
[RANJAN GOGOI]

NEW DELHI
NOVEMBER 11, 2013.

———————–
8

 

 

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