SATYANARAYAN SHAH Vs. STAR COMPANY LTD

JUDGEMENT

(1.) This appeal by the defendants arises out of a suit for recovery of arrears of rent and mesne profit. About 21 cottahas 6 chattachs of land in premises No. 8, Circular Garden Reach Road with structures thereon as described in Part I and about 15 cottahs 14 chataks and 8 sq. ft. land in premises No. 5, Circular Garden Reach Road with structures thereon as described in part 2 of the schedule of the plaint formed the subject matter of the suit.

(2.) The plaintiff's case was that he was the owner of the suit premises Nos. 5 and 8 Circular Garden Reach Road by means of purchase from the trustees of the Calcutta Improvement Trust on 15-1-47 in which defendants' predecessor-in-interest Dindayal Shah was a confirming party. The defendants by a lease dated 15-1-47 took the lease of the property in question for 20 years commencing from 15-1-47 at a monthly rental of Rs. 1620/-. It was alleged that the rent should be paid within first week of the month for which rent is due. It is also alleged that in the said document the defendant-tenant is to pay the owner's and occupier's share of municipal taxes. It is further agreed that on determination of the tenancy, defendant would surrender to the company the disputed land and building. It is also stipulated that if the rent is not paid for 9 months, the plaintiff-company would have the right to re-enter the premises. It is alleged that the defendant failed to pay the rent for the period commencing from 15th July, 1949 to 14th Jan. 1951. Hence this suit has been filed.

(3.) Two sets of written statement have been filed by the defendants, one, by defendant No. 1 and other by defendants Nos. 2, 3 and 4. Subsequently, additional written statements were also filed by the said defendants. The defendants' plea was that the company is the ostensible lessor but the real legal relationship between the parties is not that of lessor and lessee but one of creditor and debtor. It was alleged in the written statement that the real intention of the parties was that there should be a relationship of creditor and debtor and the lease rent is only for the interest of the money advanced. It is alleged that the suit property was acquired by the trustees of the Calcutta Improvement Trust and under Section 81 of the Calcutta Improvement Act, 1911, if there is a surplus land, the Improvement Trust must first offer the same to the person from whom the land was acquired before it is sold to any other person or in other words, the defendant had the first right of purchase in respect of the surplus land. Admittedly, the land which is the subject matter of the rent suit was one which was the surplus land and to which the original defendant Dindayal had the first right of purchase. In 1928, Dindayal was asked to exercise his option and by resolution dt. 22-2-28, the Improvement Trust offered the land to be purchased by Dindayal for Rs. 2,23,689/- by two resolutions being ext. D and D1. It appears that from 1926 to 1947, Dindayal. could not procure the money for accepting the offer made by the Calcutta Improvement Trust. It appears further that Dindayal approached different persons and ultimately he approached Gobinda Bangur, the Managing Director of M/s, Mugniram Bangur and Co. Ltd. for financial help. Gobinda Lal allegedly agreed to advance the loan of Rs. 3,25,000/- at an interest of 6% and the transaction should be so effected as not to attract the provision of the Bengal Money Lender's Act. Accordingly a draft agreement between Mugniram Bangur Co. Ltd. and the defendant was prepared by M/s. Khaitan & Co., Solicitor of M/s. Mugniram Bangur. The draft was sent to P. D. Himatsingka Co. After the Solicitors of the parties agreed, the agreement was signed between the parties and subsequently by a deed of conveyance on 15-1-47, the property was sold to Star Company Ltd. the present plaintiff, as the nominee of M/s. Mugniram Bangur Co. Ltd. It further appears that on 15-1-47 a lease for 20 years was executed by the plaintiff company in favour of the defendant wherein the plaintiff company agreed that the lessee will have an option of repurchasing on repayment of the purchase price and such amount as stipulated in the deed of lease. It is further agreed by the lessor and the lessee that the right of purchase will not be enforced within 5 years from the date of lease and that within that 5 years, the lessee will have to spend for the improvement of the lease-hold property by spending Rs. 60,000/-and on payment of the monthly rent of Rs. 1620/-. It appears from the plaint that the lessee did not pay the money and hence this suit was filed for recovery of the arrears of rent.