Full Judgment Text
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S).8149 OF 2018
[ARISING OUT OF SLP(C) NO.13912 OF 2017]
M/S POPAT & KOTECHA PROPERTY & ORS. ..APPELLANT(S)
VERSUS
ASHIM KUMAR DEY .RESPONDENT(S)
J U D G M E N T
RANJAN GOGOI, J.
1. Leave granted.
2. This appeal by special leave by the
th
landlord is against the order dated 7 December,
2016 passed by the Calcutta High Court in a
proceeding under the West Bengal Premises Tenancy
Act, 1997 (hereinafter referred as “the 1997 Act”)
for eviction of the respondent-tenant on the
ground that the tenant had defaulted in payment of
his share of municipal tax as an occupier under
the provisions of the Kolkata Municipal
Corporation Act, 1980 (hereinafter referred to as
“the 1980 Act”). The application filed by the
Signature Not Verified
Digitally signed by
NEETU KHAJURIA
Date: 2018.08.09
18:04:36 IST
Reason:
landlord was dismissed by the learned Trial Court
2
which view has been upheld in appeal by the High
Court.
3. The matter lies in a very short compass and
the question arising may be formulated as
hereunder:
“Whether after the amendment of the
West Bengal premises Tenancy Act by
Amendment Act No. 14 of 2001 with
th
effect from 10 July, 2001 [which had
incorporated sub-section (8) to
Section 5] whether a tenant who
defaults in payment of his/her share
of municipal tax as apportioned by the
landlord would be in default of rent
rendering him/her liable to eviction.”
4. The rent agreement governing the parties in
the present case was executed in the year 1991.
Under the said agreement the parties had agreed
that the rent would include all municipal taxes
payable and that as and when such taxes are
enhanced rent should be proportionately raised.
However, with the amendment of the Act with effect
th
from 10 July, 2001 and after incorporation of
sub-section (8) of Section 5 the obligation to pay
the municipal tax/taxes was specifically cast on
the tenant in his/her capacity as an occupier.
Sub-Section (8) of Section 5 is in the following
3
terms:
“5. Obligations of tenant.-
*
*
(8)Every tenant shall pay his share of
municipal tax as an occupier of the
premises in accordance with the
provisions of the Kolkata Municipal
Corporation Act, 1980 (West Bengal Act
LIX of 1980) or the West Bengal
Municipal Act, 1993 (West Bengal Act
XXII of 1993).
5. In the present case, the property tax
payable in respect of the suit property was
reassessed and enhanced. There were several
tenants in occupation of the suit property. The
landlord apportioned the tax between the tenants
th
and issued a notice dated 7 February, 2003 upon
the respondent-tenant to pay his share of the
municipal taxes. The respondent-tenant by reply
th
dated 29 March, 2003 to the said notice had
sought for a reconsideration/review of the matter
on a “co-operative spirit for the sake of
harmonious relation between tenant and landlord.”
As the respondent-tenant had not remitted the
amount due as his share of the municipal tax, the
landlord instituted the proceedings for eviction
4
on the ground of default of payment of rent on the
part of the respondent-tenant.
6. The learned Trial Court dismissed the
claim of the landlord on the ground that no
documentary evidence with regard to the
enhancement of property tax was forthcoming and as
the respondent-tenant had been depositing the
monthly rent payable with the Rent Controller, the
tenant cannot be deemed to be the defaulter.
7. In appeal, the High Court upheld the
order of the learned Trial Court though on a
different reasoning. The High Court held that
even if the municipal taxes are to be held to be
part of the rent payable, there is no automatic
enhancement of the rent by an unilateral notice on
the part of the landlord under Section 20 of the
1997 Act and that such enhancement has to be
ordered by the Rent Controller. As the aforesaid
requirement was not met, the High Court dismissed
the appeal filed by the landlord.
8. In the present case, under the tenancy
agreement municipal taxes were included in the
monthly rent payable and any enhancement thereof
5
was to result in enhancement of the monthly rent
also. With the amendment made to the Act with
th
effect from 10 July, 2001 and upon incorporation
of sub-section (8) of Section 5, the obligation to
pay municipal taxes as an occupier of the premises
fell upon the tenant. The relevant clauses in the
rent agreement therefore stood superseded by the
statutory obligation cast on the tenant by the
amendment to the Act.
9. In the present case following the
enhancement of municipal taxes by the Municipal
Corporation in respect of the suit property an
apportionment of the share of each tenant was made
by the landlord and a notice to pay was served on
the respondent-tenant. As already noticed, in his
reply, the respondent-tenant did not dispute his
liability to pay his share of the municipal tax
and had sought for a reconsideration/review. In
the written statement apart from an evasive denial
in the following terms there was no other denial
or dispute raised:
“7…………The defendant further denies the
legitimacy and/or authenticity of the
calculation with regard to the
enhancement of the rent…..”
6
10. The respondent-tenant nowhere denied in
any specific terms that the share of municipal
taxes demanded was disproportionate or excessive
or otherwise unauthorized in law. The argument
advanced at the bar that the landlord cannot
apportion the municipal taxes among different
tenants if the premises is to be occupied by more
than one tenant and it is the Municipal
Corporation who is the authority to separately
assess the tax payable by each tenant does not
find any support from the provisions of the 1980
Act.
11. This aspect of the matter came up for
consideration before this Court in Calcutta
Gujarati Education Society and another vs.
1
Calcutta Municipal Corpn. and others and the
views expressed by this Court is found to be in
paragraph 45 of the said report which is extracted
below:
“45. We find that the machinery
provisions for assessment and recovery
of tax basically involve the owner or
the lessor who is “primarily liable”
for the tax on property although in
1. (2003) 10 SCC 533
7
the course of assessment and recovery
of portion of tax from the tenants,
sub-tenants or occupants, their
involvement is also directed. It is
with the purpose to make the procedure
of recovery of tax simpler that the
owner or the lessor is proceeded
against as the “person primarily
liable”. The owner or lessor of the
property is “primarily” required to
satisfy the demand towards tax with
right to recover it from the tenant,
sub-tenant or the occupant. If the
landlord or the owner is obliged to
make payment of whole amount of tax
inclusive of his own share and share
of the tenant, sub-tenant or the
occupant, the owner or lessor has to
be conferred with the power to recover
the portion of tax payable by the
tenant, sub-tenant or occupant who is
actually enjoying the property and
putting it to use for commercial or
non-residential purpose. The
legislature has taken note of the fact
that a large number of properties in
the metropolitan city of Calcutta are
in occupation of tenants, sub-tenants
or occupants on a comparatively small
amount of rent or lease money. In such
a situation, to impose entire burden
of tax on the owner or lessor, would
be inequitable, more so when the
tenancy law does not allow increase in
rent beyond a particular limit and the
right of eviction of the landlord is
restricted to the grounds under the
Tenancy Act. By the impugned
provisions of the Act, therefore, the
legislature has thought of
apportioning the tax burden between
owner or the lessor as one party and
the tenant, sub-tenant or occupier as
the other parties. The whole amount of
tax is recoverable from the lessor and
may also be recovered from the tenant
8
or sub-tenant through attachment of
the rent. In case where the lessor or
landlord has paid the whole tax
including the portion of tax payable
by the tenant or sub-tenant, the
landlord has to be equipped with the
power to get himself reimbursed by
recovery of the portion of tax paid by
him on behalf of the tenant. Section
231 of the Act, therefore, creates a
fiction that the “tax” apportioned on
the tenant would be treated as “rent”
and would be recoverable as such. The
word “rent” has not been defined in
the tenancy law and this Court has
taken note of this legal position in
the case of Puspa Sen Gupta v. Susma
Ghose (1990) 2 SCC 651 which arose out
of the provisions of the Tenancy Act
applicable to West Bengal. Rent is a
compendious expression which may
include lease money with service
charges for water, electricity and
other taxes leviable on the tenanted
premises .” (underlining is ours)
As already seen, in paragraph 45 of the
report, extracted above, the provisions of Section
231 of the 1980 Act was also considered and it was
held that municipal taxes would be a part of the
“rent” payable by the tenant to the landlord.
12. While the provisions of the 1980 Act
make it very clear that an occupier as
distinguished from the owner i.e. ‘person
primarily liable’ is entitled to pre-assessment
notice and to participate in the assessment
9
proceedings and also to question the same by way
of an appeal, etc. assessment of a part of the
premises in occupation of a tenant or different
parts of such premises in occupation of different
tenants is not contemplated under the 1980 Act.
Rather, from the provisions of Section 230 of the
1980 Act, it is clear that the person to be
assessed to tax is the person primarily liable to
pay i.e. the owner who is vested with the right to
recover the portion of the tax paid by him on
behalf of the tenant, if required, proportionately
to the extent that the value of the area occupied
bears to the value of the total area of the
property. Under the 1980 Act, in the event of any
default on the part of the owner to pay the tax
the rent payable by the tenant(s) is liable to be
attached.
13. In the present case, default on the part
of the respondent-tenant is clear and evident. The
obligation to pay municipal taxes on the tenant
being over and above the obligation to pay the
rent by virtue of the provisions of Section 5(8)
of the 1997 Act, the High Court could not have
10
imposed on the landlord the requirement of
obtaining a formal order of enhancement of rent
from the Rent Controller.
14. For the aforesaid reasons, we allow this
appeal and set aside the order of the High Court
affirming the order of the learned Trial Court.
The application filed by the landlord for eviction
of the respondent-tenant is allowed.
...................,J.
(RANJAN GOGOI)
...................,J.
(R. BANUMATHI)
...................,J.
(NAVIN SINHA)
NEW DELHI
AUGUST 09, 2018