Apollo Zipper India Limited vs W. Newman And Co. Ltd.

CIVIL APPEAL NO.4249 OF 2018 (Arising out of S.L.P.(c) No. 27775 of 2017)

Apollo Zipper India Limited ….Appellant(s)

VERSUS

W. Newman And Co. Ltd. ….Respondent(s)

JUDGMENT

Abhay Manohar Sapre, J.

1. Leave granted.

2. This appeal is directed against the final

judgment and decree dated 13.06.2017 passed by

the High Court at Calcutta in APD No. 510 of 2015

whereby the Division Bench of the High Court

Signature Not Verified allowed the appeal filed by the respondent herein Digitally signed by ASHA SUNDRIYAL Date: 2018.04.20 15:42:23 IST Reason: 1 and set aside the order dated 14.10.2015 passed by

the Single Judge of the High Court and granted

unconditional leave to the respondent to defend the

suit and remanded the suit for its trial on merits.

3. The short issue involved in this appeal relates

to grant of leave to the respondent (defendant) to

defend the summary eviction suit filed by the

appellant against them in relation to the suit

premises.

4. In order to appreciate the issue involved, it is

necessary to set out the background facts which led

to filing of the summary eviction suit leading to

passing of the impugned order.

5. The background facts of the case are as

follows:

6. The appellant is the plaintiff whereas the

respondent is the defendant in a summary suit out

of which this appeal arises.

2

7. There is a Hotel in the city of Kolkata called

“Great Eastern Hotel” (hereinafter referred to as

“GEH”). It is situated in Old Court House Street

(Hemanta Basu Sarani), Kolkata. The Hotel has

been in existence for the last more than a century.

It is a heritage Hotel. The Hotel building has several

floors and consists of several shops, business

premises including the Hotel. The building and the

Hotel was owned and run by the Company called

“Great Eastern Hotel Limited” (hereinafter referred

to as “GEHL” ).

8. The shops and business premises in the Hotel

building are mostly on the ground floor and were let

out by GEHL to different persons as their tenants.

One such business premises (No.18) measuring

around 6000 sq. feet, which is the subject matter of

this appeal (hereinafter referred to as the “suit

3 premises”), was let out by GEHL, a century back, to

the respondent for non-residential purpose. The

monthly rent of the suit premises at the relevant

time was Rs.40,000/-.

9. In the year 1975, the State of West Bengal

passed an Act called “The Great Eastern Hotel

(Taking Over of Management) Act, 1975 (Act XXXII

of 1975)” (hereinafter referred to as “the Act 1975”).

The Act 1975 was passed to provide for taking over

of the management of the undertaking of the GEHL

as defined under Section 2(d) for a limited period of

five years in public interest and also to secure its

proper management. Pursuant thereto, the State

Government took over the management of the

undertaking of the GEHL.

10. The Act of 1975 was followed by another Act

passed by the State of West Bengal on the expiry of

five years in 1980 called “The Great Eastern Hotel

4 (Acquisition of Undertaking) Act, 1980 (Act No XXVII

of 1980)” (hereinafter referred to as “the Act 1980”).

The Act 1980 was passed for the acquisition of the

undertaking of the GEHL.

11. On 18.06.1981, the State Government issued a

notification under Section 3(1) of the Act 1980

whereby the undertaking of GEHL stood transferred

to and vested absolutely in the State Government

with effect from 17.07.1980.

12. The Governor issued a notification under

Section 3 (2) of the Act 1980 for better and efficient

management and administration of the GEH, and

directed therein that the undertaking of the GEHL

shall stand transferred to and vest in the Great

Eastern Hotel Authority (for short, “GEHA”)

constituted under Section 5 (1) of the Act 1980.

13. Consequent upon enacting of the Act 1980 and

issuance of the aforementioned notification under

5 the Act of 1980, the State Government (GEHA)

became the owner of the GEHL (which included the

land, Hotel building, assets and the management of

GEHL) by operation of law.

14. As a consequence thereof, the respondent, who

was originally the tenant of GEHL, became the

tenant of the State Government, i.e., GEHA on the

same terms and conditions with effect from

17.07.1980. The respondent too accepted this

transfer of ownership of the suit premises and

accordingly started paying monthly rent of

Rs.40,000/- to GEHA which they paid till 2005.

15. On 05.10.2005, the Governor issued another

notification under Section 3(2) of the Act 1980 and

directed therein that all the fixed and current assets

of the GEHA be vested in the Company called

"Apollo Zipper India Limited" (appellant herein).

6

16. As a result of issuance of this notification, all

the assets (fixed and current) of GEHA stood vested

in the appellant-Company with effect from

05.10.2005. This is how the appellant became the

absolute owner of GEHA including the suit premises

let out to the respondent.

17. By letter dated 24.02.2006, GEHA informed

the respondent about the transfer of their entire

assets to the appellant with effect from 05.10.2005

followed by another letter dated 28.04.2006 of the

Advocates of GEHA sent to the respondent

informing them about the transfer of ownership and

assets of GEHA to the appellant with effect from

05.10.2005 including transfer of the suit premises

to the appellant.

18. On 17.05.2012, the appellant sent a quit

notice to the respondent under Section 106 of the

Transfer of Property Act, 1882(hereinafter referred

7 to as “the TP Act”) and terminated the respondent's

tenancy with effect from 03.06.2012 and demanded

arrears of rent and vacant possession of the

tenanted premises from the respondent. On receipt

of the quit notice, the respondent did not reply to it.

(See page180 of SLP- order of the Single Judge).

19. This led to filing of the summary suit being

Civil Suit No.201/2012 by the appellant against the

respondent on the original side of the High Court at

Calcutta claiming therein arrears of rent

(Rs.39,20,000/-), the vacant possession of the suit

premises and mesne profits at the rate of

Rs.40,000/- per day.

20. The suit was filed under Chapter XIII- A (Rule

1-B) of the Rules of the High Court at Calcutta

(original side), 1914 (for short, “The Rules”). The

appellant filed evidence by way of affidavit in

support of their case. The respondent on being

8 served of the summons of the suit also filed affidavit

opposing the suit of the appellant.

21. It may be mentioned here that the appellant

filed another Civil Suit No.53/2007 against the

respondent in the High Court at Calcutta for

permanent injunction restraining them from

carrying out any changes in the nature and

character of the suit premises and from transferring

and alienating the suit premises to any third party.

22. Similarly, the respondent also filed one suit

(Title Suit No.1183/2012) in the City Civil Court at

Calcutta against the appellant for a declaration that

the quit notice dated 17.05.2012 sent by the

appellant to the respondent under Section 106 of

the TP Act is void, that the respondent is a monthly

tenant of the suit premises, and also prayed for

issuance of mandatory injunction against the

appellant, who was made defendant No.1 in the said

9 suit, and Bharat Hotels Ltd., GEHA and the State of

West Bengal as defendant Nos. 2, 3 and 4

respectively, directing them to accept the monthly

rent from the respondent(plaintiff) at the rate of

Rs.1600/- in respect of the tenanted premises. This

suit is pending.

23. The respondent also filed Writ Petition

No.569/2004 in the High Court at Calcutta

challenging therein the rate of monthly rent of the

suit premises.

24. Coming now to the facts of the summary suit

filed by the appellant (C.S. No.201 of 2012) out of

which this appeal arises, the appellant (plaintiff)

claimed that they are entitled to a decree for

eviction against the respondent from the suit

premises and also a decree for arrears of rent and

mesne profits under Rule 6 of the Rules because the

respondent has failed to raise any arguable and

10 substantial defense on merits in support of their

case in answer to the appellant's summary suit.

25. The respondent, however, raised essentially

three grounds to oppose the appellant's suit by way

of defense and sought leave to defend the suit on

the said grounds.

26. First, the suit, as filed by the appellant by

taking recourse to the provisions of the TP Act, is

not maintainable. According to the respondent, the

suit should have been filed under the West Bengal

Premises Tenancy Act, 1997 (for short, “the

Tenancy Act”) because the monthly rent of the suit

premises is less than the limit prescribed under

Section 3(f) of the Tenancy Act (monthly rent is

Rs.1600/- whereas the limit prescribed is

Rs.10,000/-.)

27. Second, the respondent has not attorned to

the appellant inasmuch as it is also not clear as to

11 who is the owner of the suit premises, viz., the

appellant-Company or Bharat Hotels limited and,

therefore, the appellant is required to prove their

title over the suit premises. It is more so for want of

any attornment made by the respondent of the

appellant's ownership and the tenancy in question.

This, according to the respondent, needs an

elaborate trial in the suit.

28. Third, the monthly rent of the suit premises is

Rs.1600/- whereas the respondent is paying

Rs.38,400/- towards maintenance charges to the

landlord. It was contended that since there is a

dispute as to whether the monthly rent is

Rs.40,000/- or Rs.1600/-, the same also needs an

elaborate trial on merits in the suit.

29. The Single Judge, by order dated 14.10.2015,

declined to grant leave to defend to the respondent

and decreed the appellant's suit by passing an

12 eviction decree against the respondent in relation to

the suit premises. The Single Judge held that none

of the grounds raised by the respondent to seek

leave to defend the suit are prima facie arguable and

nor have any merit and nor these grounds

constitute any substantial defense, which may

require an elaborate trial on such grounds and,

therefore, no case is made out to grant any leave to

defend the suit to the respondent.

30. In other words, the Single Judge held, that the

summary suit is maintainable under the provisions

of the TP Act, that the monthly rent of the suit

premises is Rs.40,000/-, that the respondent has

attorned to the appellant, that the appellant has

prima facie proved their title over the suit premises,

that the provisions of the Tenancy Act has no

application because the monthly rent of the suit

premises is above the prescribed limit of

13 Rs.10,000/- and lastly, to record these findings, no

elaborate trial in the suit is required inasmuch as

such findings can be recorded on the basis of the

documents filed by the parties.

31. The respondent felt aggrieved and filed appeal

before the Division Bench of the High Court. By

impugned judgment, the Division Bench allowed the

respondent's appeal, set aside the order of the

Single Judge and granted unconditional leave to

defend the suit to the respondent and remanded the

suit for its trial on merits.

32. The Division Bench was of the view that there

is some dispute regarding the title over the suit

premises as to who is the owner of the suit

premises, namely, whether the appellant-Company

or the other Company,i.e., M/s Bharat Hotels Ltd.

33. In other words, the Division Bench held that

the question of title over the suit premises needs to

14 be gone into detail in the suit with a view to find out

as to who is the actual owner of the suit premises

and hence an arguable case in defense has been

made out by the respondent while seeking leave to

defend the summary suit.

34. The plaintiff (appellant) felt aggrieved and filed

this appeal by way of special leave against the

judgment of the Division Bench in this Court.

35. Heard Mr. Mukul Rohtagi and Mr. Ranjeet

Kumar, learned senior counsel for the appellant and

Mr. Jaideep Gupta, learned senior counsel for the

respondent.

36. Mr. Mukul Rohatgi, learned senior counsel for

the appellant (plaintiff) while assailing the legality

and correctness of the impugned judgment, mainly

reiterated the same submissions, which were urged

by the appellant before the two Courts below in

support of their case.

15

37. In substance, his submission was that the

reasoning and the conclusion arrived at by the

Single Judge is just, proper and legal and hence the

order of the Single Judge deserves to be restored by

setting aside the impugned judgment.

38. Learned counsel urged that none of the three

grounds raised by the respondent for grant of leave

to defend the suit were either arguable or had any

prima facie merit therein. In other words, the

submission was that all the three grounds were

raised for the sake of raising having no arguable

and substantial defense whether on facts or in law

and, therefore, Single Judge was justified in

declining to grant leave to defend the suit to the

respondent and was justified in passing decree for

eviction against the respondent.

39. On merits, learned counsel pointed out with

reference to each ground that the documents on

16 record would prima facie show that firstly, the

monthly rent was Rs.40,000/-, Secondly, the

appellant was the owner of the suit premises,

thirdly, the respondent had duly attorned to the

appellant and fourthly, the suit was rightly filed by

invoking the provisions of the TP Act because the

provisions of the Tenancy Act had no application to

the suit premises due to monthly rent of the suit

premises exceeding the limit specified under Section

3 (f) of the Tenancy Act.

40. In reply, Mr. Jaideep Gupta, learned senior

counsel for the respondent supported the impugned

judgment and contended that no case is made out

to interfere in the impugned judgment. Learned

counsel then elaborated his submission in support

of the impugned judgment and prayed for dismissal

of the appeal.

17

41. Having heard the learned counsel for the

parties and on perusal of the record of the case, we

are inclined to allow the appeal, set aside the

impugned judgment and restore the order of the

Single Judge.

42. In our considered opinion, the reasoning and

the conclusion arrived at by the Single Judge while

declining to grant leave to defend the suit to the

respondent and decreeing the appellant's suit for

eviction deserves to be restored as against the

impugned judgment passed by the Division Bench.

43. In other words, we are of the considered

opinion that the grounds, which were pressed in

service by the respondent, to seek leave to defend

the suit are neither arguable nor have any prima

facie merit therein and, therefore, there does not

arise any need to have any trial in the suit on merits

18 on such grounds. This we say for the following

reasons.

44. The first question that arises for consideration

in this appeal is whether the respondent attorned to

the appellant or whether the appellant is required to

prove their title over the suit premises or whether

there exists any doubt or confusion over the issue of

title of the suit premises so as to grant leave to

defend to the respondent to probe these questions

elaborately on merits in the summary suit filed by

the appellant against the respondent for eviction.

45. It is a settled principle of law laid down by

this Court that in an eviction suit filed by the

landlord against the tenant under the Rent Laws,

when the issue of title over the tenanted premises is

raised, the landlord is not expected to prove his title

like what he is required to prove in a title suit.

19

46. In other words, the burden of proving the

ownership in an eviction suit is not the same like a

title suit. (See Sheela & Ors. vs. Firm Prahlad Rai

Prem Prakash, 2002 (3) SCC 375, Para 10 at page

383 and also Boorugu Mahadev & Sons & Anr. vs.

Sirigiri Narasing Rao & Ors. 2016 (3) SCC 343,

Para 18 at page 349 ).

47. Similarly, the law relating to derivative title to

the landlord and when the tenant challenges it

during subsistence of his tenancy in relation to the

demised property is also fairly well settled. Though

by virtue of Section 116 of the Evidence Act, the

tenant is estopped from challenging the title of his

landlord, yet the tenant is entitled to challenge the

derivative title of an assignee of the original landlord

of the demised property in an action brought by the

assignee against the tenant for his eviction under

the Rent laws. However, this right of a tenant is

20 subject to one caveat that the tenant has not

attorned to the assignee. If the tenant pays rent to

the assignee or otherwise accepts the assignee's title

over the demised property, then it results in

creation of the attornment which, in turn, deprives

the tenant to challenge the derivative title of the

landlord. [See Bismillah De (dead) by Legal

Representatives vs. Majeed Shah. 2017 (2) SCC

274 Para 24]

48. It is equally well-settled law with regard to

attornment that it does not create any new tenancy

but once the factum of attornment is proved then by

virtue of such attornment, the old tenancy

continues. (See Uppalapati Veera Venkata

Satyanarayanaraju & Anr. Vs. Josyula

Hanumayamma & Anr. AIR 1967 SC 174 ).

49. In the case at hand, we find that it is not in

dispute that the original owner of the suit premises

21 was GEHL, who had created the original contract of

tenancy with the respondent in relation to the suit

premises.

50. It is also not in dispute that the GEHL was

then acquired by the State by Act of 1975 and the

Act of 1980, as a consequence thereof, the suit

premises stood vested in an authority called the

GEHA by operation of law as per Section 3 read with

Section 5 of the Act 1980 with effect from

17.07.1980 and 22.06.1981.

51. It is also not in dispute that the respondent

accepted this change of ownership and accordingly

started paying monthly rent to the GEHA from 1980

as monthly tenant of the GEHA and which they paid

till 2005.

52. It is also not in dispute that in terms of the

notification issued by the Governor on 05.10.2005

under Section 3(2) of the Act of 1980, the suit

22 premises then stood transferred and vested in the

appellant-Company (see notification dated

05.10.2005) by operation of law and the appellant

accordingly became the owner of the suit premises

with effect from 05.10.2005.

53. It is further not in dispute that the GEHA and

their lawyer, vide letters dated 24.02.2006 and

28.04.2006, informed the respondent about the

change of ownership of the suit premises and the

appellant acquiring the ownership of the suit

premises vide notification dated 05.10.2005.

54. In our considered opinion, the aforementioned

undisputed facts, which are matter of record, are

sufficient to hold in the eviction suit that the

appellant became the owner of the suit premises

with effect from 05.10.2005.

55. In our considered view, the respondent also

attorned to the appellant and accepted the

23 ownership of the appellant over the suit premises,

which is prima facie proved by the three facts and

circumstances as set out below.

56. First, when the appellant sent a quit notice

dated 17.05.2012 to the respondent under Section

106 of the TP Act determining the tenancy and

calling upon the respondent to pay the arrears of

rent and vacate the suit premises, despite receipt of

the quit notice, they did not reply to it.

57. In our view, the respondent ought to have

replied to the notice at the first available

opportunity, which they failed to do so. It amounts

to waiver on their part to challenge the invalidity or

infirmity of the quit notice including the ownership

issue raised therein.

58. In the case of Parwati Bai vs. Radhika, AIR

2003 SC 3995, the question arose as to whether the

tenancy was terminated in accordance with the

24 provisions of Section 106 of the TP Act. The

defendant despite receiving the notice from the

plaintiff did not reply to it.

59. This Court held that if the defendant does not

raise any objection to the validity of quit notice at

the first available opportunity, the objection will be

deemed to have been waived. The following Para 6 of

the decision is apposite which reads as under:

“6. The singular question to be examined in the present case is whether the tenancy was terminated in accordance with the provisions of Section 106 of the Transfer of Property Act. The receipt of notice by the defendant is admitted in the written statement. The defendant has not raised any specific objection as to the validity of the notice. An objection as to invalidity or infirmity of notice under Section 106 of the TP Act should be raised specifically and at the earliest; else it will be deemed to have been waived even if there exists one. It cannot, therefore, be said that the notice in the present case suffered from any infirmity. A copy of the notice was exhibited and proved by the plaintiff as Ext. P-4.”

25

60. Second, the respondent by letters dated

13.06.2006, 27.06.2006, 05.07.2006 and

11.07.2006, sent to the appellant on the question of

ownership of the suit premises and payment of rent

had expressed their willingness to attorn and

continue the tenancy with the appellant and also

offered to pay rent to the appellant. (See pages 198

& 199 of the SLP Paper Book-order of the Single

Judge)

61. Third, the respondent in their civil suit

(No.1183 of 2012) filed against the appellant in

Paras 15, 17, 18 and relief clause (e) of the plaint

admitted the ownership of the appellant over the

suit premises and went to the extent of seeking the

mandatory injunction against the appellant

directing them to accept the monthly rent of the suit

premises from the respondent.

26

62. In other words, reading of the aforementioned

paras in the respondent’s plaint including the relief

clause (e) would go to show that the respondent was

all along willing to accept and indeed actually

accepted the ownership of the appellant over the

suit premises and, therefore, sought mandatory

injunction against the appellant to accept them as

tenant. The conduct of the respondent, therefore,

disentitles them to now raise a new plea questioning

the title of the appellant over the suit premises and

a plea of attornment. Both, in our opinion, are

wholly misconceived pleas and, therefore, deserve to

be rejected.

63. As mentioned above, the title of the landlord

over the tenanted premises in a suit for eviction

cannot be examined like a title suit. Similarly, the

attornment can be proved by several circumstances

27 including taking into consideration the conduct of

the tenant qua landlord.

64. The aforesaid three circumstances, in our

opinion, are, therefore, more than sufficient to

record a finding that the appellant was prima facie

able to prove their title over the suit premises so

also was able to prove the factum of “attornment”

made by the respondent in relation to the suit

premises in appellant’s favour thereby entitling the

appellant to determine the contractual tenancy

which was devolved upon them by operation of law.

65. In the light of the foregoing discussion, we are

unable to agree with the view taken by the Division

Bench that there was some dispute or confusion as

to who is the owner of the suit premises. In our

view, there was neither any dispute and nor

confusion and nor any ambiguity over the question

28 of title over the suit premises which needed any

elaborate inquiry.

66. This takes us to examine the next question as

to what was the monthly rent of the suit premises –

whether Rs.1600/- towards monthly rent and

Rs.38,400/- towards maintenance charges as

claimed by the respondent or Rs.40,000/- as

claimed by the appellant.

67. In our view, the monthly rent of the suit

premises was Rs.40,000/-. It is for the reason that

Firstly, the respondent had been paying

Rs.40,000/- per month to their previous landlord –

GEHA for a long time; Second, the bifurcation of

Rs.40,000/- was being sought by the respondent so

that they may get the benefit of applicability of the

Tenancy Act to defend therein tenant’s right which

they failed to prove and lastly, the rent receipts filed

by the parties clearly proved that the monthly rent

29 of the suit premises was Rs.40,000/- and not

Rs.1600/-.

68. This takes us to examine the next question as

to whether the suit filed by the appellant invoking

the provisions of the TP Act was maintainable or it

should have been filed under the Tenancy Act.

69. In our opinion, the appellant rightly filed the

suit by invoking the provisions of the TP Act. It is

for the reason that once the monthly rent of the suit

premises was found to exceed the limit prescribed

under Section 3(f) of the Tenancy Act, the provisions

of the Tenancy Act had no application to the suit

premises.

70. Section 3(f) of the Tenancy Act says that any

premises let out for non-residential purpose when

carries more than Rs. 10,000/- as monthly rent in

the areas included within the limits of Municipal

30 Corporation, the provisions of the Tenancy Act will

not apply.

71. In the case at hand, the monthly rent of the

suit premises was Rs.40,000/- and, therefore, the

appellant was well within their right to file summary

suit against the tenant's eviction and for recovery of

the arrears of rent by taking recourse to the

provisions of the TP Act read with Rule 1(B) of The

Rules applicable to the suits filed on the original

side jurisdiction of the High Court at Calcutta.

72. In the light of the foregoing discussion, we are

of the view that the respondent failed to raise any

arguable and substantial defense as required under

Rule 6 read with Rule 9 of the Rules and the three

grounds raised for seeking leave to defend the suit

were only for the sake of raising and had no factual

or/and legal foundation to stand for trial in the suit

and hence no leave can be granted to the

31 respondent on such grounds under Rule 9 of the

Rules. It was, therefore, rightly declined by the

Single Judge but wrongly granted by the Division

Bench.

73. In view of the foregoing discussion, the appeal

succeeds and is allowed. Impugned judgment is set

aside and that of the Single Judge is restored.

74. The respondent is granted six months’ time to

vacate the suit premises subject to the condition

that they shall deposit the entire arrears of rent up

to date at the rate of Rs.40,000/- per month within

one month from the date of this order and also

deposit six months’ rent by way of damages for use

and occupation within one month in advance.

75. The entire amount, as directed above, be

deposited with the High Court. The appellant shall

be entitled to withdraw the sum so deposited. The

respondent shall also furnish the undertaking in

32 this Court within two weeks stating therein that

they will vacate the suit premises within six months

from the date of this order and will also deposit the

sum, as directed above, in time. Failure to file the

undertaking and deposit of the amount will entitle

the appellant to execute this order against the

respondent on the expiry of one month.

76. As a consequence of this judgment, all the

pending cases mentioned above such as, C.S.

No.53/2007, Title Suit No.1183/2012, and W.P. No.

569 of 2004 which were filed by the parties against

each other in various Courts in relation to the suit

premises and, if pending till date, stand accordingly

disposed of.

………...................................J. [R.K. AGRAWAL]

…...……..................................J. [ABHAY MANOHAR SAPRE] New Delhi;

April 20, 2018

33