Hindustan Petroleum Corporation ... vs Shoma Roy Sarkar Banerjee & Ors
2023 Latest Caselaw 6178 Cal

            IN THE HIGH COURT AT CALCUTTA
                     Civil Appellate Jurisdiction
                            (Appellate Side)
                          S.A. 106 of 2014
                                with
          I.A. No. CAN/2/2018 (Old No. CAN/1958/2018)
          I.A. No. CAN/3/2019 (Old No. CAN/8790/2019)
                       I.A. No. CAN/4/2022
              Hindustan Petroleum Corporation Ltd.
                               Vs.
               Shoma Roy Sarkar Banerjee & Ors.


Before:             The Hon'ble Justice Arijit Banerjee
                                  &
                    The Hon'ble Justice Apurba Sinha Ray


For the Appellant           : Mr. D.K. Kundu, Adv.
                              Mr. A. Basu, Adv.


For the Applicants       / : Mr. Suddhasatua Banerjee, Adv.
respondent                   Mr. Domingo Gomes, Adv.

Mr. Jishnujit Roy, Adv.

Mr. Aayush Lakhotia, Adv.

Judgment On                 : 14.09.2023


Arijit Banerjee, J. :-


In Re: IA NO: CAN/4/2022

1. This is an application for modification of an order dated January 7,

2014, passed in this second appeal. By that order, a Coordinate Bench

admitted the appeal on the questions of law recorded in the order and

further directed "stay of operation of the decree provided the appellant would

continue to pay Rs. 50,000/- per month as occupation charges for the suit

premises commencing from January, 2013, until further order." There was

also a direction for payment of the arrear amount in 12 equal monthly

instalments. We are told that the arrear amount has been paid.

2. The material facts of the case in so far as the same are relevant for the

present purpose, are that the respondents/applicants are the owners of land

measuring about 31.09 kathas on Hill Cart Road in Siliguri. The predecessor

in interest of the first applicant along with other owners of the land entered

into a lease agreement Dated March 1, 1962, with one Standard Vacuum Oil

Company for a period of 10 years with an option for renewal of the lease for

a further period of ten years, in respect of the said land. In 1974, Standard

Vacuum Oil Company came to be known as ESSO Standard Eastern Inc.

Subsequently, ESSO was converted to Hindustan Petroleum Corporation

Limited (in short "HPCL"), the present appellant, under an acquisition made

by the Government of India. In the year 1988, an ejectment suit being O.C.

Suit No. 23 of 1988 was filed by the predecessor-in-interest of the applicants

against HPCL, in the Court of the leanred Munsiff at Siliguri. The suit was

decreed in favour of the plaintiffs on June 19, 1995. The plaintiffs being the

predecessors in interest of the present applicants, were granted khas

possession of the suit property and the appellant herein was directed to

vacate the said property by the end of August, 1995.

3. The appellant challenged the decree before the learned District Judge

at Darjeeling by filing Appeal No. 2 of 1995. The appeal was dismissed by a

judgment and order dated December 19, 2012. Against such dismissal

order, the present second appeal has been preferred by HPCL.

4. At the time of the admission of the second appeal the order dated

January 7, 2014 was passed by a Coordinate Bench, modification of which

is sought for by the applicants (respondents in the appeal) in the present

application.

5. The applicants say that occupational charge of Rs. 50,000/- per

month is not commensurate with the actual value of the land in question.

The land is situate in a prime commercial locality in the heart of Siliguri. The

property is adjacent to the Courtyard of Hotel Marriot. The applicants rely on

a valuation report dated September 13, 2022, furnished by a Government

approved Valuer namely Shri P.K. Das who is also registered with the

Income Tax Department. According to such report the present market value

of the land in question is approximately Rs. 31.09 Crore and the present

monthly occupational charge would be Rs. 11, 66, 000/-.

6. The applicants also rely on an E-Assessment Slip issued by the

government of West Bengal, Directorate of Registration & Stamp Revenue

which shows that the market value of the land as approximately Rs. 38.10

Crore.

7. Learned Advocate for the applicants submitted that once an eviction

decree has been passed and execution is delayed due to operation of stay

order of the appellate forum, depriving the decree holder of the fruits of the

decree, the appellate forum should pass appropriate orders so that

reasonable occupational charge equivalent to the market rent is paid by the

judgment debtor who is holding on to the property in question. In this

connection learned Advocate relied on Paragraphs 4, 5, 18 and 19 of the

decision of the Hon'ble Supreme Court in the case of Atma Ram Properties

(p) Ltd. v. Federal Motors (p) Ltd., reported at (2005) 1 SCC 705, which

read as follows.

"4. Ordinarily, this Court does not interfere with discretionary

orders, more so when they are of interim nature, passed by the

High Court or subordinate Courts/Tribunals. However, this appeal

raises an issue of frequent recurrence and, therefore, we have

heard the learned counsel for the parties at length. Landlord-

tenant litigation constitutes a large chunk of litigation pending in

the Courts and Tribunals. The litigation goes on for unreasonable

length of time and the tenants in possession of the premises do not

miss any opportunity of filing appeals or revisions so long as they

can thereby afford to perpetuate the life of litigation and continue

in occupation of the premises. If the plea raised by the learned

senior counsel for the respondent was to be accepted, the tenant,

in spite of having lost at the end, does not lose anything and rather

stands to gain as he has enjoyed the use and occupation of the

premises, earned as well a lot from the premises if they are non-

residential in nature and all that he is held liable to pay is

damages for use and occupation at the same rate at which he

would have paid even otherwise by way of rent and a little amount

of costs which is generally insignificant.

5. Shri K. Ramamurthy, the learned senior counsel for the

appellant submitted that once a decree or order for eviction has

been passed, the tenant is liable to be evicted and if he files an

appeal or revision and opts for retaining use and occupation of the

premises, he should be prepared to compensate the landlord by

paying such amount as the landlord would have been able to earn

in the event of the premises being vacated and, therefore, the

superior court, passing an order of stay, acts well within its

discretionary jurisdiction by putting on terms the appellant who

seeks an order of stay. On the other hand, Shri Ranjit Kumar, the

learned senior counsel appearing for the respondent, defended the

order of the High Court by raising several pleas noticed shortly

hereinafter.

18. That apart, it is to be noted that the appellate Court while

exercising jurisdiction under Order 41 Rule 5 of the Code did have

power to put the appellant tenant on terms. The tenant having

suffered an order for eviction must comply and vacate the

premises. His right of appeal is statutory but his prayer for grant of

stay is dealt with in exercise of equitable discretionary jurisdiction

of the appellate Court. While ordering stay the appellate Court has

to be alive to the fact that it is depriving the successful landlord of

the fruits of the decree and is postponing the execution of the

order for eviction. There is every justification for the appellate

Court to put the appellant tenant on terms and direct the

appellant to compensate the landlord by payment of a reasonable

amount which is not necessarily the same as the contractual rate

of rent. In Marshall Sons & Co. (I) Ltd. V. Sahi Oretrans (P) Ltd. &

Anr., (1999) 2 SCC 325, this Court has held that once a decree for

possession has been passed and execution is delayed depriving the

judgment-creditor of the fruits of decree, it is necessary for the

Court to pass appropriate orders so that reasonable mesne profits

which may be equivalent to the market rent is paid by a person

who is holding over the property.

19. To sum up, our conclusions are:-

(1) while passing an order of stay under Rule 5 of Order 41 of

the Code of Civil Procedure, 1908, the appellate Court does

have jurisdiction to put the applicant on such reasonable

terms as would in its opinion reasonably compensate the

decree-holder for loss occasioned by delay in execution of

decree by the grant of stay order, in the event of the appeal

being dismissed and in so far as those proceedings are

concerned. Such terms, needless to say, shall be reasonable;

(2) In case of premises governed by the provisions of the Delhi

Rent Control Act, 1958, in view of the definition of tenant

contained in clause (l) of Section 2 of the Act, the tenancy

does not stand terminated merely by its termination under

the general law; it terminates with the passing of the decree

for eviction. With effect from that date, the tenant is liable to

pay mesne profits or compensation for use and occupation of

the premises at the same rate at which the landlord would

have been able to let out the premises and earn rent if the

tenant would have vacated the premises. The landlord is not

bound by the contractual rate of rent effective for the period

preceding the date of the decree;

(3) The doctrine of merger does not have the effect of

postponing the date of termination of tenancy merely because

the decree of eviction stands merged in the decree passed by

the superior forum at a later date."

8. Learned Advocate also relied on the decision of the Hon'ble Apex Court

in the case of Martin and Harris Private Limited & Anr. v. Rajendra

Mehta & Ors., reported at (2022) 8 SCC 527 and in particular on

paragraphs 18 and 19 of the reported judgment, which read as follows:-

"18. Thus, after passing the decree of eviction the tenancy

terminates and from the said date the landlord is entitled for

mesne profits or compensation depriving him from the use of the

premises. The view taken in Atma Ram (supra) has been reaffirmed

in the case of State of Maharashtra vs. Super Max International

Pvt. Ltd. and others (2009) 9 SCC 772 by three Judges Bench of

this Court. Therefore, looking to the fact that the decree of eviction

passed by Trial Court on 03.03.2016 has been confirmed in

appeal; against which second appeal is pending, however, after

stay on being asked the direction to pay mesne profits or

compensation issued by the High Court is in consonance to the

law laid down by this Court, which is just, equitable and

reasonable.

19. The basis of determination of the amount of mesne profits, in

our view, depends on the facts and circumstances of each case

considering place where the property is situated i.e. village or city

or metropolitan city, location, nature of premises i.e. commercial or

residential area and the rate of rent precedent on which premises

can be let out are the guiding factor in the facts of individual case."

9. In short, learned Advocate for the applicants argued that given the

location and size of the land in question, the reasonable occupational charge

should be around Rs. 11.66 lakh. However, the applicants are willing to

accept Rs. 9.66 lakh as monthly occupational charges.

10. Learned Advocate for HPCL submitted that when the appeal was

admitted and the appellant was directed to pay Rs. 50,000/- as occupational

charge, that amount was acceptable to the applicants. Even assuming that

the value of property has increased manifold, it cannot be argued that what

Rs. 50,000/- was in 2014, will be Rs. 9.66 lakh as on date. Even assuming

that rental income has increased 400% between 2014 and 2023, a

maximum of Rs. 2 lakh per month should be the reasonable occupational

charges in respect of the land in question, as on date. He submitted that

HPCL is prepared to pay Rs. 2 lakh per month as occupational charge till the

disposal of the appeal.

11. We have considered the rival contentions of the parties.

12. Keeping in mind the observations of the Hon'ble Supreme Court in the

two decisions referred to above, we are of the view that Rs. 50,000/- per

month cannot be said to be the reasonable occupational charge in respect of

the land in question. The land measures approximately 31 kathas, i.e.,

approximately 22, 320 Sq. ft. The land is located in the heart of Siliguri, in a

prime commercial area. HPCL is commercially exploiting the property for a

long time. According to the valuation report of a Government approved

Valuer who is also registered with the Income Tax Department, the current

market value of the concerned land is approximately Rs. 31 crore and the

present monthly rental would be approximately Rs. 11.66 lakh. If we go by

the E-Assessment Slip generated by the Directorate of Registration and

Stamp Revenue, Government of West Bengal, the present market value of

the land is approximately Rs. 38 Crore.

13. Keeping in mind that Siliguri is the second biggest city in West Bengal,

the general level of land price in that city and the other factors like location

etc. mentioned above, in our opinion, Rs. 5 lakh per month would be the

reasonable letting out value of the land in question. In other words, if HPCL

had vacated the land in terms of the eviction decree obtained by the

applicants, the applicants could have let out the land at a monthly rental of

at least Rs. 5 lakh. However, the applicants cannot do so because HPCL

continues to occupy the land and carry on business therefrom on the

strength of the stay order passed by a Coordinate Bench in January, 2014.

Therefore, it is only just and fair that HPCL pays to the applicants monthly

occupational charge at the rate at which the applicants could have rented

out the property, had HPCL handed over vacant possession thereof to the

applicants in terms of the eviction decree.

14. In January 2014, when the Coordinate Bench directed HPCL to pay

Rs. 50,000/- per month as occupational charge, the same was done without

reference to the observations of the Hon'ble Supreme Court in the case of

Atma Ram Properties (supra). In any event, in our considered opinion, Rs.

5 lakh would currently represent the reasonable monthly occupational

charge in respect of the land in question.

15. Accordingly, we modify the order dated January 7, 2014, to the extent

that HPCL shall pay occupational charge at the rate of Rs. 5 lakh per month

to the applicants for the period starting from October 1, 2023, till disposal of

the appeal.

16. The application being I.A. No. CAN/4/2022 is accordingly disposed

of.

17. Urgent certified website copies of this judgment, if applied for, be

supplied to the parties subject to compliance with all the requisite

formalities.

I agree.

(APURBA SINHA RAY, J.)                             (ARIJIT BANERJEE, J.)