TaxTMI 
TaxTMI 
2016 (3) TMI 1029
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....of 2016 (Arising out of SLP(C) No. 31354 of 2009) Civil Appeal Nos.3169-3170 of 2016 (Arising out of SLP(C) Nos. 32444-32445 of 2010) Civil Appeal No.3171 of 2016 (Arising out of SLP(C) No. 31663 of 2011) Civil Appeal No. 3172 of 2016 (Arising out of SLP(C) No. 4816 of 2012) JUDGMENT Ranjan Gogoi, J. 1. Leave granted in each of the Special Leave Petitions. 2. The facts arising in the Civil Appeals arising from SLP(C) Nos. 29282-29284 of 2008, which is being taken as the lead case, may be noticed at the outset. 3. One Durgaprasad Lashkari (predecessor of the appellants) had leased out land admeasuring 35,772 sq. mtrs. in favour of one Bechardas Spinning and Weaving Mills Ltd. (subsequently known as Prasad Mills Ltd.) for a period of 199 years by a lease deed dated 10.12.1916. A secured creditor of Prasad Mills Ltd. had in the year 1984 filed a company petition seeking the winding up of the aforesaid Prasad Mills Ltd. While the company petition was pending some of the legal heirs of Durgaprasad Lashkari had filed a suit in the Small Causes Court seeking permanent injunction against the sale of assets of company more particularly the sale of the leased property. 4. An order date....
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....ng it to be in possession of the demised land; (ii) admitted non payment of rent for a period of over 15 years rendering the company and now the official liquidator liable to eviction under Section 12 of the Bombay Rent Act; (iii) admitted non user of the land for a period of over 6 years attracting Section 13(1)(k) of the Rent Act; (iv) sub-letting in favour of the company, Prasad Mills, in violation of Section 13(1)(e) of the Rent Act. 5. The learned Company Judge by a very elaborate order dated 13.10.2004 rejected all the three company applications. Aggrieved, the appellant and other legal heirs of Durgaprasad Lashkari filed three separate appeals before the Division Bench of the High Court. The High Court by a common order dated 17.10.2008 dismissed all the appeals on grounds and reasons that will be noticed shortly. It is against the aforesaid common order dated 17.10.2008 that the present appeals have been filed. 6. We have heard Shri Mihir Thakur learned senior counsel appearing for the appellants in civil appeal arising out of SLP(C) No. 29282-84/2008; Shri P.S. Narasimha, learned Additional Solicitor General appearing for the official liquidator; Shri Tushar Mehta, le....
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....of hearing of the suit or oil or before such" other date as the Court may fix, the tenant pays or tenders in Court the standard rent and permitted increases then due.3[and thereafter,-- (i) continues to pay or tender in Court such rent and permitted increases till the suit is finally decided; and (ii) pays costs of the suit as directed by the Court. (4) Pending the disposal of any such suit, the Court may out of any amount paid or tendered by the tenant pay to the landlord such amount towards payment of rent or permitted increases due to him as the court thinks fit.] Explanation.---In any case where there is. a dispute as to the amount of standard rent or permitted increases recoverable under this Act the tenant shall be deemed to be ready and. willing to pay such amount if, before the expiry of the period of one month after notice referred to in sub-section (2), he makes an application to the Court under sub-section (3) of section 11 and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by the Court." "13. - When land-lord may recover possession- (1) Notwithstanding anything contained in this Act1[but subject to the provis....
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....shall, on conviction, be punished with imprisonment for a term which may extend to six months and shall also be punished with fine which shall not be less than the sum of the value of the consideration received by him." The terms of the lease deed are as follows : "............;And whereas the above mentioned three pieces of land are owned by the First Party, and the Second Party has rented the same from First Party; And whereas the rent is fixed at Rs. 3501-00 - Rs. three thousand five hundred and one. for one year of 12 months to be paid to First Party, by the Second Party; as rent on the following conditions : (1) The said rent will be given to First Party, by Second Party every year and if the Second Party does not pay the rent due to them every year, the First Party will give registered notice for recovery of rent; and in spite of such notice the Second Party or their successors, heirs or administrators do not pay the rent, First Party or their successors, heirs, attorneys or administrators are entitled to obtain possession of the land with buildings, either by mutual understanding or through government. (2) This rent note is valid for 199, in words one hundred ninety....
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....Party is entitled to take possession of the land immediately on expiry of 199 years. (8) The First Party, or their successors, heirs, administrators or attorneys are entitled to take possession of the land before the expiry of rent period, if the Second Party fail to pay rent to First Party every year. (9) The government tax on this land is to be paid by we, First Party; but if some additional tax is levied because of construction on the land, it will be borne by the Second Party. Municipal tax is Rs. 500/- per year at present. However, hereafter if municipality levies some additional tax on First Party or on Second Party; or the government decide to levy some new tax; then all such taxes will be borne by the Second Party, and will not claim it from First Party; nor will adjust it against rent payable to the First Party; and the First Party has no right to take possession of the land before expiry of 199 years, but the First Party has right to receive amount of rent till the above period. (10) The First Party and the Second Party and their successors, heirs, administrators, attorneys and assignees, are accepting the terms and conditions set out in this agreement. Thus the S....
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.... enumerated in clauses (a) to (p) of sub-section (1) of Section 21 of the Act. (ii) Any ground contained in the agreement of lease other than or in addition to the grounds enumerated in clauses (a) to (p) of sub-section (1) of Section 21 of the Act shall remain inoperative. (iii) Proceedings for eviction of a tenant under a fixed-term contractual lease can be initiated during subsistence or currency of the lease only on a ground as may be enumerated in clauses (a) to (p) of sub-section (1) of Section 21 of the Act and it is also provided as one of the grounds for forfeiture of the lease rights in the lease deed, not otherwise. (iv) The period of fixed-term lease is ensured and remains protected except in the cases indicated in the preceding paragraph." 11. The Division Bench of the High Court took note of the fact that the non-obstante clause in Section 13 of the Rent Act only gave the said Section 13 an overriding effect over the other provisions of the Act. Section 13 was also made subject to the provisions of Section 15 of the Bombay Act. This is in contrast to Section 21 of the Karnataka Act which had an overriding effect over any other law or contract to the contrary. ....
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....ured creditor, we direct that within one month from today, the Official Liquidator shall supply to the secured creditor the particulars of the rent for the demised land for the period upto 31st October, 2008, remaining unpaid so far, and the secured creditor - State Bank of India shall deposit the amount with the Official Liquidator within one month thereafter. It will be open to the lessors to withdraw such amount." 14. On behalf of the appellants it is urged that the company in liquidation i.e. Prasad Mills Ltd. and the official liquidator appointed by the learned Company Judge in the liquidation proceedings involving the said company have rendered themselves liable to eviction on the ground of default in payment of rent under Section 12 of the Rent Act. It is further contended on behalf of the appellants that eviction of the official liquidator is required to be ordered on the grounds enumerated in Sections 13(1)(e) and 13(1)(k) of the Rent Act. Pointing out the provisions of Section 15 of the Rent Act it has been urged that the official liquidator has assigned the property contrary to the provisions of Section 15, such act not being saved either by express term of the contrac....
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....89. 16. The main plank on which the appellants have based their case, as already noticed, is the operation of Sections 12 (default), 13(1)(e) (unauthorized assignment) and 13(1)(k) (non-user of the leased land). We may now take up the aforesaid issues in seriatim. 17. Section 12 of the Rent Act confers protection on a tenant who is regularly paying or is ready and willing to pay the rent. In the present case while there is no doubt that rent has not been paid, equally, there is no doubt that the secured creditors including the State Bank of India had all along been ready and willing to pay the rent and the reasons for non payment appears to be (para 43 of the impugned order of the High Court) lack of communication by the official liquidator to the SBI of the precise amount of rent due. While there can be no doubt that mere readiness and willingness to pay without actual payment cannot enure to the benefit of the tenant in perpetuity what is required under Sub-section (2) of Section 12 is a notice in writing by the landlord raising a demand of rent and only on the failure of the tenant to comply with such notice within a period of one month that the filing of a suit for recovery o....
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....ent case by the High Court, by virtue of the decision of this Court in Laxmidas Bapudas Darbar vs. Rudravva (supra), is that in view of the limited operation of the non obstante clause in Section 15 of the Bombay Rent Act, unlike Section 21 of the Karnataka Act, the provisions of the Transfer of Property Act [Section 118 (o)] will not become irrelevant to the relationship between the parties in which event assignment may also be permissible notwithstanding the specific content of clause 7 of the lease deed in question. However, we need not dwell on this issue at any length or would also be required to consider the efficacy of the arguments of the learned Additional Solicitor General on the strength of the two Privy Council decisions mentioned above i.e. Hans Raj vs. Bejoy Lal Sel and Ram Kinkar Banerjee vs. Satya Charan Srimani (supra) inasmuch as from Company Application No. 34 of 2004, which deals with the claim of the appellants for eviction of the official liquidator from the leased property, what is clear and evident is that the case of sub-letting of the leased premises on which basis eviction has been prayed for is not sub-letting/assignment by the official liquidator but as....
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....gh Court dated 17.10.2008 in O.J. Appeal Nos. 65 of 2006, 66 of 2006 and 67 of 2006 and dismiss the civil appeals arising out of SLP(C) Nos. 29282-29284 of 2008 wherein the said order is under challenge. 22. The other civil appeals, which have been heard analogously, can be divided into two categories. The first is where the order dated 17.10.2008 passed in O.J. Appeal No. 65 of 2006 [Jabal C. Lashkari & Ors. Vs. Official Liquidator & Ors.] impugned in civil appeals arising out of SLP(C) Nos. 29282-29284 of 2008 has been followed. In the other group are the cases where the said order has been followed and also an additional ground has been cited namely that in view of the order dated 17.07.2006 passed in Company Application No. 250 of 2006 a direction has been issued to handover possession of the leased premises to the State Government; hence the question of putting the property to sale does not arise. 23. Though we have affirmed the order dated 17.10.2008 of the Gujarat High Court passed in O.J. Appeal Nos. 65 of 2006, 66 of 2006 and 67 of 2006 and dismissed the civil appeals arising out of SLP(C) Nos. 29282-29284 of 2008 [Jabal C. Lashkari & Ors. Vs. Official Liquidator & Ors.]....