SHIV KUMAR SHARMA,J. - (1.) CHALLENGE in these two appeals is the order dated 20 -1 -2000 of the Company Law Board (for short 'CLB') whereby following directions were issued: In our order dated 7 -4 -1999, we had observed that non -vacation of the shops belonging to the petitioners was a clear act of discrimination and a grave act of oppression against the family shareholders and further observed that in view of pending civil proceedings initiated by the respondents for vacation of the shops, we did not propose to pass any order regarding the vacation of the shops. While doing so, we also noted that the lease agreement with the petitioners regarding the shops expired on 15 -5 -1995. Accordingly we directed that arrears of rent for the shops should be paid to the petitioners without delay. No doubt the company has paid the arrears at the rate of Rs. 550 per shop as per the lease agreement. Since the lease agreement had already earlier and the company is getting a large amount of rent as indicated either, nonpayment of the proportionate increase in the rent to the petitioners is an act of oppression against the petitioners. Accordingly, we direct that the company, should pay 75 per cent of the rent received for 2 shops to the petitioners. Arrears of rent, as calculated above, should be paid latest by 31 -3 -2000. Since one of the contentions of the respondents was that the company has incurred certain expenditure on the shops at the time when the shops were taken on lease, we also direct that the company should indicate the amount of expenditure incurred on these shops at the time of shops were taken on lease by the company from the petitioners and adjust the same against the arrears of rent. The company will also actively pursue the civil suit filed by it for getting the shops vacated so that they can be handed over to the petitioners without avoidable delay.
(2.) CONTEXTUAL facts depict that two lease deeds were executed between M/s. Trinity Combines Associates Pvt. Ltd. (for short 'tenant company') and Prabhu Chitlangia (for short 'Landlord') in regard to shops N. A -48 and A -51. Initially rent of two shops was Rs. 325 per month and presently the rent is Rs. 550 per month. The landlord approached CLB under Sections 397 and 398 of the Companies Act, 1956 (for short 'the Act') complaining mismanagement in the affairs of the company and oppressive acts of the directors. CLB issued certain directions on 7 -4 -1999 and 21 -1 -1998. However, on 20 -1 -2000 the CLB issued further directions as indicated above. The tenant -company seeks to quash the order dated 20 -1 -2000 of CLB on the following grounds: (i) Even after expiry of lease period the tenant still holds the property in tenancy on the principle of holding over and it could not have been held that the tenant was a trespasser. (ii) Section 3(iv) of the Rejasthan Premises (Control of Rent and Eviction) Act (for short 'Rent Act') defines the term 'lease' which includes a sub -lease also. Thus the finding of CLB that the tenant -company was a trespasser and liable to pay increased rent is bad. (iii) The CLB had no jurisdiction to pass a decree of enhancement of rent. The provisions of Section 397 of the Act are not applicable to personal contract. The validity of lease agreement could not have been examined by the CLB. (iv) Section 5 of the Rent Act mandates that the rent payable is ordinarily as may be agreed between landlord and the tenant. Section 6 provides for fixation of standard rent and for this purpose a suit has to be filed. Section 8 bars a landlord to accept excessive rent otherwise under a decree. The procedure for increasing the rent has been prescribed in Section 10. Reliance is placed on V. Dhanapal Chettiar v. Yesodai Ammal : [1980]1SCR334 and Damadilal v. Par ashram : AIR1976SC2229 .
(3.) THE landlord however seeks direction that till such time a matching cost of construction of shops leased to the tenant company are not paid by the company, no deduction be made from the arrears of rent to be paid to the landlord by the tenant -company pursuant to the order dated 20 -1 -2000 of the CLB. A direction be also issued to the tenant -company to call an extraordinary general meeting of the shareholders and placed the audited accounts of the company for the period 1995 onwards and proceedings under Section 629 of the Act be initiated against Dwarka Prasad Chitlangia and Ramesh Kumar Chitlangia.;