CANDLEWOOD HOLDINGS LTD Vs. ALLAHABAD BANK

JUDGEMENT

(1.) This is a suit for recovery of Rs. 2,66,54,196/- towards arrear rents, hiring charges, municipal taxes and commercial surcharge with interest and Rs. 17,14,142/- towards compensation for damages to furniture and fixtures, interest and other reliefs.

(2.) The miniaturised version of the plaintiff is that the Calcutta Credit Corporation Ltd., hereinafter referred to as the Corporation, was the owner of fourth floor of premises No. 24, Park Street, Calcutta 16 consisting of two portions having covered areas of 9000 and 1400 sft., as described in schedule 'A' to the plaint. By an agreement for lease dated 27.08.84 the said Corporation leased out 9000 sft. to United Industrial Bank Ltd. for a period of fifteen years from 01.09.84 at a monthly rental of Rs. 81.000/- on condition that after completion of every five years the rent would be increased by at least ten per cent and that lessee would bear and pay to the lessor the occupier's share of the municipal rates and taxes and other municipal levies in respect of the said 9000 sft. without insisting upon production of assessment orders and/or bills. By a supplemental agreement dated 27.08.89 the Corporation hired out various furniture and fixtures to the said Bank for a period of fifteen years from 01.09.84 at a monthly hire-charges of Rs. 24,300/- to be enhanced after every five years by at least ten per cent. By another agreement for lease dated 22.01.85 the said Corporation leased out 1400 sft. of the said premises to the aforesaid Bank for a period of fifteen years from 01.02.85 at a monthly rental of Rs. 12,600/- to be enhanced after completion of every five years by at least ten per cent and that lessee would bear and pay the lessor the occupier's share of municipal rates and taxes and other municipal levies in respect of the said portion without insisting upon production of assessment orders and/or bills. By a supplemental agreement dated 22.01.85 the Corporation let out further furniture and fixtures to the said Bank for a period of fifteen years from 01.02.85 at a monthly hire-charges of Rs.3,780/- to be enhanced at every five years by at least ten per cent. In July, 1989 on account of merger of the said United Industrial Bank Ltd. with the defendant Bank, all rights and obligations of the United Industrial Bank in respect of the said tenancy and hiring of furniture and fixtures stood transferred to the defendant Bank. The monthly rental in respect of portion of 9000 sft. was mutually enhanced to Rs.89,100/- with effect from 01.09.89 and thereafter to Rs.2,25,000/- @ Rs.25/- per square foot with effect from 01.09.94. Similarly, the monthly rental in respect of portion of 1400 sft. was mutually enhanced to Rs.13.860/- from 01.02.90 and thereafter to Rs. 35,000/- @ Rs.25/- per sft. from 01.02.95. The hire-charges for the furniture and fixtures under the supplemental agreement dated 27.08.84 stood enhanced to Rs.26,730/- from 01.09.89 and to Rs.29,403/- from 01.09.94 in view of the escalation clause. Similarly the hire-charges for the furniture and fixtures under the supplemental agreement dated 22.01.85 stood enhanced to Rs.4,158/- with effect from 01.02.90 and to Rs. 4,573.80 from 01.02.95. The defendant and/or its predecessor-in-interest duly paid the occupier's share of municipal rates and taxes as also other municipal levies i.e. commercial surcharge upto August, 1994. It was agreed between the parties and/or their predecessors-in-interest that the defendant would bear the entirety of the municipal rates and taxes with effect from 01.09.94 which was recorded in a letter dated 14.12.94 by the defendant to the predecessor-in-interest of the plaintiff. With the expiry of February, 1995 the defendant surrendered the entirety of 1400 sft. portion as also 1753 sft. out of 9000 sft. portion to the predecessor-in-interest of the plaintiff and retained 7247 sft. of the premises, and thus the defendant and the predecessor-in-interest of the plaintiff also terminated the supplemental agreement dated 22.01.85. The Corporation by diverse process of merger ultimately came to be named "Magma Leasing Ltd." to whom the defendant attorned the tenancy. The defendant offered to surrender 7247 sft. to the plaintiff with the expiry of August, 1999, but ultimately made over the vacant possession thereof to the plaintiff on 12.01.2000. The supplemental agreement dated 27.8.84 as such stood terminated on the same date. The defendant failed to pay the rental of Rs. 1,81,175/- in respect of the said 7247 sft. from the month of January, 1996 till 12.01.2000 aggregating to Rs. 87,68,870/-. The defendant made part payment towards hire-charges for furniture and fixtures upto December, 1995 leaving an amount of Rs. 2,40,475/- as short-fall and failed to pay any hire-charges for furniture and fixtures from January, 1996 till the date of delivery of possession on 12.01.2000 thus aggregating a sum of Rs. 13,72,320/-. The defendant also failed to pay Rs. 66,67,732/- on account of municipal rates and taxes and commercial surcharge. In acknowledgement of its liability to pay the arrear rent and hire-charges for furniture and fixtures, the defendant forwarded a letter dated 30.08.99 along with a banker's cheque for a sum of Rs. 67,91,787/- to the plaintiff towards arrear rent and hire-charges upto August 1999 in purported full and final settlement of its claim which was returned by the plaintiff as its claim on such account was far larger. In respect of municipal rates and taxes and commercial surcharge though the defendant through its letters acknowledged its liability wrongfully insisted upon production of municipal bills and proof of payment thereof. The plaintiff is entitled to interest on the said sum of Rs. 1,68,08,922/- @ 18% p. a., and the sum on this count as on 29.02.2000 stood at Rs. 98,45,274/-. Thus the total sum due comes to Rs. 2,66,54,196/-. On the date of delivery of possession of the said 7247 sft. to the plaintiff after a joint inventory many items of furniture and fixtures were found in damaged condition, several items missing, and the physical condition of the premises was damaged, and the value of the damage as reported by a Chartered Engineer and valuer, engaged by the plaintiff was to the tune of Rs.17,14,142 which the plaintiff is entitled to claim. Hence the suit.

(3.) The suit is contested by the defendant by filing a written statement inter alia denying the material allegations made in the plaint and contending that originally Calcutta Credit Corporation Ltd. was the landlord of the defendant in respect of the said two portions. On the basis of instructions from the said Corporation, the defendant attorned its tenancies in favour of ARM Group Enterprise Ltd. and subsequently on the basis of instructions from the said ARM Group Enterprise Ltd. the defendant attorrled its tenancies in favour of Magma Leasing Ltd. On the basis of instructions from Magma Leasing Ltd. the defendant attorned its tenancies in favour of several companies viz. Puneet Developers (P) Ltd., Puneet Holdings Ltd., Seville Estates (P) Ltd. and Bansal Estates (P) Ltd., and paid rents to them as per their respective shares but Magma Leasing Ltd. continued to collect furniture charges from the defendant. By a letter dated 19.11.98 the plaintiff informed the defendant that by in order dated 20.11.97 passed by this Court the said four companies were amalgamated with the plaintiff company. By a letter dated 30.08.99 the defendant informed the plaintiff about its decision to vacate its tenanted portion by the end of August, 1999 and forwarded a banker's cheque for Rs.67,91,787/- towards full and final settlement upto 31.08.99. On 31.08.99 the defendant forwarded to the plaintiff the keys of the tenanted premises along with its letter dated 31.08.99 with the object of delivering vacant possession, but the plaintiffs representative Mr. S. Tulsyan refused to accept the keys and also delivery of possession of the tenanted premises which was duly informed by the defendant to the representative of the plaintiff during subsequent discussion. Followed by a letter dated 04.01.2000 to the plaintiff intimating that the defendant had no liability to pay any rent and other charges from 1st September, 1999 and that the defendant was holding the keys from 01.09.99 due to wrongful refusal on the part of the plaintiffs representative, by a letter dated 10.01.2000 the plaintiffs advocate made certain false allegations. By its letter dated 12.01.2000 the defendant on denying the allegations reiterated the same thing and forwarded the keys of the premises which was accepted by the plaintiff through its representative. While going through the records it transpired that the said four companies by a letter dated 15.09.98 claimed rent till September, 1998 and the landlords of the defendant including the plaintiff arbitrarily collected from time to time a sum of Rs. 99,15,959.60p. from the defendant by way of municipal rates and taxes and surcharge thereon without rendering any accounts thereof. The defendant was liable to pay such municipal rates and taxes and commercial surcharge on actuals and proportionate to the area occupied. The defendant called upon the plaintiff to render true and faithful accounts of the amounts actually payable by the defendant as against the amounts paid by it, but the defendant failed to render such accounts. In 1992 during discussion it was agreed that the generator hire charges shall be increased from Rs. 20,000/- to Rs. 28,000/- per month from 01.04.92 and statutory payment as regards municipal taxes and surcharges in respect of the occupier's share will be paid to the landlord by the defendant subject to verification of the bills/receipts of CMC but there will be no increase in furniture rent. The defendant had or has no liability to pay any rent or other charges beyond 31.08.99. Hence, the suit merits dismissal. The defendant has prayed for a decree for accounts of the amounts paid by it by way of municipal rates and taxes and commercial surcharge as against the amounts actually payable by it and for the amounts found due and payable by the plaintiff to the defendant.