Landlord’s Diligence and Compliance with Prescribed Withdrawal Procedures are Pre-requisites for Claiming Interest on Deposited Rent

The petitioner, a landlord, inducted K.G. Industries Pvt. Ltd. as a monthly tenant for premises in Burrabazar, Kolkata. From March 2014 to January 2025, the tenant deposited monthly rent (totaling Rs. 11,13,500) with the Rent Controller (Respondent No. 2) under the West Bengal Premises Tenancy Act, 1997

In a previous writ petition (WPO 461 of 2025), the court directed the Rent Controller to disburse the amount upon the petitioner fulfilling statutory formalities

Consequently, Rs. 9,43,500 was released, followed by the remaining Rs. 1,70,000 during the pendency of the current writ

The petitioner filed the present petition seeking 12% interest per annum on the delayed remittance, alleging that the Rent Controller failed in its statutory duty to notify the landlord of the deposits

1. Whether the claim for interest is barred by the principle of constructive res judicata because it was prayed for but not expressly granted in the earlier writ petition

2. Whether the petitioner is entitled to interest on the rent amounts deposited with the Rent Controller in the absence of a specific statutory provision for interest

The court applied Section 11, Explanation V of the Code of Civil Procedure (CPC), which states that relief claimed but not expressly granted is deemed refused, provided there was an actual adjudication of the issue

It relied on Saroja vs. Chinnusamy (Dead) regarding the conditions for res judicata

Regarding the merits, the court interpreted Sections 21 and 23 of the West Bengal Premises Tenancy Act, 1997, and Rules 9 and 11 of the 1999 Rules, which mandate that a landlord must file a specific application for withdrawal of rent and undergo a quasi-judicial verification process

It distinguished the precedent Poornima Advani vs. Govt. of NCT, which allows interest on the refund of taxes/duties retained without authority, noting such principles do not apply to private rent deposits held in trust

On the first issue, the court held that res judicata did not apply because the previous Bench only granted liberty to file a withdrawal application and did not "hear and finally decide" the entitlement to interest; thus, there was no adjudication to trigger Explanation V

On the second issue, the court found that under Section 23 of the 1997 Act, remittance is not automatic; the landlord must proactively apply for withdrawal

The court observed that the petitioner knew of the deposits since 2014 but failed to file the prescribed Form 4 applications until 2025

The Rent Controller, acting in a quasi-judicial capacity, does not "collect" rent as a tax or duty but holds it to the credit of the landlord

Since the delay was primarily due to the petitioner's lack of diligence in following statutory procedures, the doctrine of "unjust enrichment" or "retention" by the State did not apply

The court held that the petitioner is not entitled to interest because the delay was self-inflicted by failing to file the required withdrawal applications timely

The court dismissed the writ petition, making no order as to costs