Safiya Malik

The Calcutta High Court, in an order delivered by Justice Krishna Rao, in favor of the eviction of a tenant from a disputed commercial property in Burrabazar, Kolkata. The judgement follows a legal battle over tenancy rights, rent payments, and lease validity under the Transfer of Property Act, 1882, and the West Bengal Premises Tenancy Act, 1997. The court directed the tenant to vacate the premises and settle outstanding dues while appointing a special referee to determine mesne profits.

The dispute arose between the plaintiff, Jatia Estates Limited, and the defendant, Nirwan Finvest Private Limited, over tenancy rights concerning a commercial property located at 21, Rupchand Roy Street, Burrabazar, Kolkata-700007. The plaintiff sought the eviction of the defendant, alleging default in rent payments and unauthorized subletting.

The defendant occupied the premises based on two unregistered agreements dated June 2, 1997, and September 1, 1997. The agreements stipulated monthly rents of Rs. 3,000 and Rs. 3,150, respectively, with the latter including service charges of Rs. 1,000 per month. While the second agreement provided for a 5% rent increase every ten years, the first agreement contained no such escalation clause.

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The plaintiff issued notices on August 1, 2017, demanding a sixfold increase in rent, which the defendant disputed. The defendant claimed that the tenancy was governed under the West Bengal Premises Tenancy Act, 1997, and the unilateral increase in rent was illegal. The plaintiff, however, insisted that the defendant had already been making payments at the enhanced rate, referencing multiple instalments paid by the defendant from October 2018 to March 2019.

The defendant submitted that although payments were made, they did not amount to an acknowledgment of the revised rent demand. It further argued that the plaintiff had issued two separate notices under the West Bengal Premises Tenancy Act, 1997, and then proceeded with eviction proceedings under the Transfer of Property Act, 1882, which, according to the defendant, was not legally sustainable.

The defendant also raised concerns over the non-registration of the tenancy agreements. It contended that since the agreements were unregistered, the terms agreed upon in those documents could not be used against them. However, the plaintiff countered that the nature of the tenancy created a binding contractual obligation.

Justice Krishna Rao stated that the tenancy agreements were compulsorily registrable under Section 17 of the Registration Act, 1908, and Section 107 of the Transfer of Property Act, 1882. Since they were unregistered, they could not be relied upon to establish tenancy rights beyond a month-to-month basis. The court held that "for unregistered tenancy agreements, reference may be made to Sections 17 and 49 of the Registration Act, 1908. The terms of an unregistered agreement cannot be looked into and are not regarded as evidence of collateral transaction."

The court dismissed the defendant’s argument that the tenancy was governed solely by the West Bengal Premises Tenancy Act, 1997. It concluded that the tenant had accepted the increased rent demand through payments made between October 2018 and March 2019. The judgment stated: "The defendant on receipt of the notices dated 1st August, 2017, and the bills raised by the plaintiff, accepted the enhanced rent and paid the same to the plaintiff from the month of October, 2018, till March, 2019, and also paid TDS without any objection."

The court further noted that the defendant had failed to reply to the eviction notice served under Section 106 of the Transfer of Property Act, 1882, and had only raised objections after legal proceedings had commenced. Citing precedents, the court held that failure to challenge a notice at the first opportunity amounted to waiver. The court referred to multiple cases where tenants who did not respond to eviction notices were deemed to have accepted them as valid.

The court also examined whether the rent increase demanded by the plaintiff was lawful. It found that while the West Bengal Premises Tenancy Act, 1997, allows for controlled rent increments, the defendant had voluntarily paid the revised rent for a substantial period before ceasing payments. This indicated that the defendant had, in effect, acquiesced to the new rent structure.

1. The defendant was directed to vacate the disputed premises at 21, Rupchand Roy Street, Burrabazar, Kolkata-700007, and hand over peaceful possession to the plaintiff.

2. The defendant was ordered to pay Rs. 21,38,942 as outstanding consolidated rent for the period from April 2019 to July 2024.

3. The court appointed Advocate Anuj Singh as a special referee to determine mesne profits from August 1, 2024, until the defendant vacates the premises. The referee's remuneration was fixed at Rs. 3,00,000, initially to be borne by the plaintiff but recoverable from the defendant.

4. The special referee was directed to complete the inquiry within three months and submit a report by June 11, 2025.

5. The defendant’s application under Order VII, Rule 11 of the CPC for rejection of the plaint was dismissed.

Advocates Representing the Parties

• For the Plaintiff: Mr. Tilak Bose (Senior Advocate), Mr. Arindam Guha, Mr. Shuvasish Sengupta

• For the Defendant: Mr. Shyamal Sarkar (Senior Advocate), Mr. Ram Anand Agarwal, Mr. Rajesh Gupta, Ms. Nibedita Pal, Mr. Ananda Gopal Mukherjee, Ms. Sonam Ray, Mr. Viraj Gupta

Case Title: Jatia Estates Limited v. Nirwan Finvest Private Limited

Case Number: CS No. 185 of 2024

Bench: Justice Krishna Rao

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