Kiran Raj

The Calcutta High Court Division Bench comprising Justice Sabyasachi Bhattacharyya and Justice Uday Kumar has dismissed an appeal challenging the rejection of a plaint in a suit concerning the recovery of khas possession and eviction of certain occupants from a leased property. The court held that the grounds raised by the appellants for the rejection of the plaint were not legally sustainable at the preliminary stage of the proceedings.

The dispute concerns a suit filed by the plaintiff seeking eviction of occupants from a property that was initially leased to Orient Beverages Limited. The original lease, executed by the trust estate of Raja Rajendra Mallick Bahadur, commenced on October 1, 1965, for a period of 50 years, expiring on September 30, 2015. However, during the pendency of this lease, another registered lease deed was executed in favor of the plaintiff on March 31, 2001, to take effect from October 1, 2015, or upon sooner determination of the existing lease.

On August 30, 2020, the plaintiff filed the suit seeking eviction of the defendant nos. 2 to 5, who claimed to be sub-lessees under Orient Beverages Limited. The plaintiff also sought recovery of proportional municipal rates, taxes, and mesne profits. The defendants contested the suit, arguing:

1. The plaintiff lacked the legal standing to seek eviction directly against the sub-lessees without first obtaining an order against Orient Beverages Limited.

2. The lease in favor of the plaintiff was void as no physical possession was handed over at the time of execution.

3. A lease granted while the previous lease was still in effect was legally invalid.

Defendant nos. 2 and 4 moved an application under Order VII Rule 11 of the Code of Civil Procedure for rejection of the plaint, contending that it disclosed no cause of action and was barred by law. However, the Single Judge dismissed the application. Aggrieved, the appellants filed an intra-court appeal challenging this order.

The Division Bench examined the contentions of both parties and examined relevant legal principles. The court first addressed the argument concerning the absence of privity of contract between the plaintiff and the sub-lessees, stating:

"The plaintiff has stepped into the shoes of the erstwhile lessee upon the expiry of the previous lease by efflux of time. Even if the defendant nos.2 to 5 are taken to be sub-lessees, the jural relationship between the current lessee and the sub-lessees would be a first-degree relationship without any intermediary between the two."

The court distinguished this case from Hiralal Vallabhram v. Kastorbhai Lalbhai and Others (AIR 1967 SC 1853), which held that a landlord cannot sue a sub-tenant alone for eviction but must first sue the tenant. The Division Bench observed that in the present case, the plaintiff was not the superior lessor but had assumed the position of lessee upon the expiry of the previous lease. Therefore, the legal bar against suing sub-lessees directly did not apply.

On the issue of whether concurrent leases were permissible, the court stated:

"Indian law does not recognize the creation of concurrent dual leases. However, in the present case, the lease granted in favor of the plaintiff commenced only upon the expiry or determination of the earlier lease. Hence, there arises no question of any overlapping period between the two."

Regarding the validity of the lease in the absence of physical possession, the court analyzed Section 107 of the Transfer of Property Act, 1882, and observed:

"If a lease of immovable property is made by a registered instrument, handing over of possession is not necessary. Only in the event of an oral lease agreement is the delivery of possession required."

The appellants relied on Tirath Ram Gupta v. Gurubachan Singh and Another (1987) 1 SCC 712 and Sukumar Saha v. Shyamal Kumar Saha and Others (2006) 1 CHN 12, arguing that a lease is invalid without possession being handed over. However, the court found these precedents inapplicable, as those cases involved situations where a lessee attempted to surrender only part of a leased property while retaining possession of another portion. In contrast, the plaintiff's lease in the present case was created prospectively, to commence upon the expiry of the previous lease, without any surrender requirement.

The court also addressed the principle of res judicata, rejecting the plaintiff’s argument that a previous order of injunction in the suit precluded the defendants from filing the application for rejection of plaint. It held:

"The scope of consideration of the prima facie case in an injunction application is tentative and limited and does not operate as res judicata at further stages of the suit."

The court further noted that the previous lessee, Orient Beverages Limited, had not contested the eviction suit or raised any objection to the plaintiff’s claim. This fact weakened the appellants’ position, as they were attempting to challenge the plaintiff’s rights in the absence of an objection from the primary lessee.

The High Court upheld the decision of the Single Judge, stating:

"A plain reading of the plaint does not disclose any bar of law or non-disclosure of cause of action to justify the rejection of the plaint at the threshold. The suit court is free to decide all issues upon a full-fledged trial."

The court directed that the suit shall proceed to trial, where all issues will be adjudicated upon considering the pleadings and evidence presented by both parties. Consequently, the appeal (A.P.O.T. No. 415 of 2024) and the associated application (GA No. 1 of 2024) were dismissed, and the impugned judgment and order dated November 13, 2024, passed in C.S. No. 257 of 2016, were upheld. The court further directed that there shall be no order as to costs.

Case Title: Sandeep Agarwal and Another vs. Sidhartha Dealer LLP and Others
Case Number: A.P.O.T. No.415 of 2024 (Arising out of C.S. No.257 of 2016)
Bench: Justice Sabyasachi Bhattacharyya and Justice Uday Kumar

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