Calcutta High Court
Kanak Projects Ltd vs Stewarts & Lloyds Of India Ltd on 3 December, 2019 1 IN THE HIGH COURT AT CALCUTTA ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL SIDE Present: The Hon’ble Justice Shivakant Prasad C.S. No. 247 OF 2010 KANAK PROJECTS LTD. Versus STEWARTS & LLOYDS OF INDIA LTD. For the Plaintiff : Mr. Dhruba Ghosh, Sr. Adv. Mr. A. Guha, Adv. Mr. Debnath Ghosh, Adv. Mr. Sarasij Dasgupta, Adv
For the Defendant : Mr. Aritra Basu, Adv. Ms. P. Tibrewala, Adv.
C.A.V. On : 30.09.2019 Judgment On : 03.12.2019 The plaintiff prayed for a decree of Rs. 1,33,37,923/- for mesne profits as pleaded in paragraph 22 hereinabove; decree for further mesne profits @ Rs. 12,88,086/- per month till recovery of vacant and peaceful possession of the suit premises. The Premises No. 41, Chowringhee Road, Kolkata-700071 (known and hereinafter referred to as the Kanak Building) situate within the aforesaid jurisdiction was owned by Kanak Investments Private Ltd. possessed of the said premises comprised of about 128 cottahs of land with several buildings constructed thereon, all situate within the aforesaid jurisdiction. 2 On or about 15th December, 1984 the said Kanak Investments Private Limited was converted into public limited company under the provisions of 43A(1) of the Companies Act and was named Kanak Investments Ltd. The certificate of incorporation of the said Kanak Investments Ltd. issued by the Registrar of Companies. By an order dated January 30, 1989 passed in Company Petition No. 603 of 1988 this Hon’ble Court sanctioned a scheme of amalgamation of Kanak Investments Ltd. and two other companies with Kanak Investments Ltd. under the provisions of Companies Act, 1956 and by reason whereof the properties rights and interest of Kanak Investments Ltd. in the Kanak Building stood transferred to and vested in Kanak Projects Limited, the plaintiff herein. Prior thereto the defendant had been inducted as a monthly tenant into a portion of the said Kanak Building by the aforesaid previous owner by a letter dated 8th February, 1985 issued and signed by the defendant and confirmed and accepted by the owner; but mistakenly in its previous name. The defendant paid rent according to English Calendar month at the rates as agreed and recorded in the said letter of 8th February, 1985 with escalation so provided therein month by month to Kanak Investments Ltd., who accepted and issued rent receipts to the defendant. The plaintiff, thus, became the absolute owner of Kanak building including the aforesaid tenanted portion. The defendant has attorned the 3 tenancy to the plaintiff and has paid monthly rents and other charges to the plaintiff month by month. The defendant under the cover of a letter dated 12th October, 1989 sent a draft lease agreement to the plaintiff with suggestions for the changes from the letter dated 8th February, 1985 for incorporation into the proposed lease agreement. The plaintiff did not approve or accept the said draft lease agreement and informed the defendant accordingly by a letter dated 9th November, 1989 and thereafter, once again by a letter dated 28th September, 1992. The defendant did not proceed further with the matter and negotiation for finalisation of lease agreement. After 28th September, 1992 the plaintiff did not pursue the same nor did the defendant want execution of any lease agreement. Thus, the defendant continued as a monthly tenant under the plaintiff and paid monthly rents at the rate per sq. ft. as per letter dated 8th February, 1985. The defendant failed to reimburse the share of commercial surcharge on Municipal tax under Section 194 and Section 230 (a) (b) of Calcutta Municipal Correspondence Act 1980. So, the plaintiff by its Advocate’s letter dated 29th July, 1997 terminated the tenancy of the defendant with the expiry of last day of September, 1997 in respect of the suit premises by institution of a suit being no. 248 of 1998 for recovery of possession of the demised premises. The said suit was decreed on 15th February, 1999 in 4 terms of compromise petition and the defendant continued to remain as a monthly tenant in respect of the suit premises mentioned in the schedule C to the plaint. In June, 2000, the defendant surrendered and made over to the plaintiff vacant and peaceful possession of a part of the 1st floor of the tenanted portion of the said premises and thereafter in or about August, 2000 the defendant surrendered and made over vacant and peaceful possession also of a part of the top floor of the tenanted portion of the said premises to the plaintiff and also surrendered and made over vacant and peaceful possession of the second floor of the tenanted portion in the said premises to the plaintiff in December, 2000. The amount of monthly rent last paid by the defendant and accepted by the plaintiff was for the month of September, 2009 was Rs. 86,474/- but the defendant defaulted in payment of rent thereafter. So, the plaintiff through its Advocate duly terminated the tenancy of the defendant in respect of the suit premises calling upon the defendant to deliver up vacant and peaceful possession on expiry of 15 days from the date of receipt of the notice dated 1st October, 2009 issued under Section 106 of Transfer of Property Act and the said notice was duly served upon the defendant. Hence, the instant suit. The defendant complainant contested the suit by filing a written statement denying all material particulars made in the plaint and contended, inter alia, that admittedly the defendant was first inducted by 5 the predecessor-in-interest of the plaintiff as a lessee in respect of the second floor of the north portion of premises no. 41 Chowringhi Road, Calcutta having an area of 4999 for a period of fifteen years commencing from 1st August, 1960 as per the registered lease executed in favour of the defendant on 24th August, 1960. In different floors were also led out to the defendant from time to time and the defendant was enjoying the production under West Bengal Premises Tenancy Act, 1966. Thus, prior to 1985 defendant was occupying 17573 square feet and different floors of the said premises. The plaintiff had filed a suit for eviction in 1998 by terminating the tenancy of the defendant but the said suit was compromised as the purpose for institution of the suit was to recover commercial surcharge. The agreement entered into by the plaintiff and the defendant was accepted binding by all the successor-in-interest of plaintiff, namely, Kanak Investment Limited even after the plaintiff was corresponding regarding the draft lease. The agreement which was accepted as binding by the parties contained a term that a lease agreement in an initial at the portion for a over period of 30 years would be registered in due course and the lease agreement was so signed will be obtained on plaintiff and its successor and will equally bind the defendant and its successor. In 2009 the plaintiff has issued the notice termination of the tenancy as there was connection between the parties for execution of lease with the suggested alteration in the proposed by the defendant but in violation of the agreement the plaintiff had promised to execute a lease as stated in agreement dated 8th February, 1985. It appears that the plaintiff filed a suit for eviction on the basis that the defendant is merely a monthly tenant and that they noticed of 6 termination is not legal plaint and validity and the plaintiff is not entitled to a decree as prayed for in the suit. It is contended that since the plaintiff was accepting rent in accordance with 1985 agreement, the defendant believed that the lease would continue in due course. It is submitted that the defendant is a lessee in respect of the suit premises as the plaintiff has accepted the defendant in terms of the letter dated 8th February, 1985. Accordingly, the defendant has prayed for dismissal of the suit. On the above pleadings following issues are framed on recast– 1. Is the suit maintainable in law and in fact? 2. Is the defendant a tenant in respect of the suit premises? 3. Whether the tenancy was terminated by a notice under Section 106 of the Transfer of Property Act? If so, was it duly served upon the defendant? 4. Is the defendant a trespasser in respect of the suit premises? 5. Is there any agreement dated 8th February, 1985 by and between the parties for execution and registration of a lease deed in respect of the suit premises in favour of the defendant? 6. Is the plaintiff entitled to a decree as prayed for? 7. To what relief or relieves if any is the plaintiff entitled? Issue nos. 2 and 4 — Both issues are taken up together as they are interlinked. 7 According to the plaint case the defendant was inducted as a monthly tenant in respect of the suit premises and subsequently the tenancy of the defendant in a portion of Kanak Building was confirmed and accepted by the plaintiff on the basis of a letter dated 8th February, 1985 and in terms thereof defendant paid rent according to English calendar month with the escalation of rate of rent so provided in the term of tenancy reduced in writing by the said letter proved as exhibit C on behalf of the plaintiff through its constituted power of attorney holder Mr. Arun Kumar Sharma who has proved in evidence his authority to depose on behalf of the plaintiff as he is manager now working in sister concern of the plaintiff company which has been marked as exhibit A being the power of attorney dated 14th day of November, 2006 by Kanak Project Ltd and in support thereof extract of resolution of the board of directors dated 4th January, 2006 has also been adduced and proved as evidence in Exhibit-B. It is reflected from the letter Exhibit-C that the parties had agreed on the arrangement for rent of premises occupied by the defendant to the effect that a lease agreement for an initial period of thirty years renewable at option for a further period of twenty-one years which shall be registered in due course and the lease agreement so signed will be binding on Kanak Investments Private Ltd. and its successors and equally binding on Stewarts and Lloyds of India Ltd. and its successors. It would reveal that defendant was inducted as tenant as per the terms of tenancy vide term nos. 1 to 4 of the said letter of tenancy Exhibit-C. 8 On behalf of defendant company a copy of draft lease agreement as approved by the defendant after incorporating therein the suggestions/changes by the defendant was enclosed and forwarded to the plaintiff company for necessary incorporation of the changes in the draft lease agreement with a request to approve the agreement and to finalise for registration which fact is depicted from the letter dated 12th October, 1989 Exhibit-D. In reply to the said letter the plaintiff company sent a letter reference no. KPL/60A dated 09.11.1989 to the defendant to arrange for its documentation with a request to send a copy of the same to the plaintiff vide Exhibit-E. It further reveals from a letter reference no. KPL/60A dated 28.09.1992 Exhibit-F issued by the plaintiff requesting the defendant to take necessary steps for execution and registration of the formal lease deed without any further delay. By adverting to the aforesaid documents, Mr. Dhruba Ghosh learned senior Advocate appearing for the plaintiff submitted that the defendant has failed and neglected in adhering to the terms of the letter of tenancy dated 08.02.1985 and for failing to reimburse to the plaintiff a sum of Rs. 15,32,216/- (Rupees Fifteen Lacs Thirty Two Thousand Two Hundred Sixteen) only being the share of commercial surcharge on municipal tax under Section 194 and Section 230 (a) (b) of the Calcutta Municipal Corporation Act, 1980, upto 31.3.1996. So, a suit being suit no. 248 of 1998 was instituted against the defendant for a decree for recovery of possession of the suit premises after termination of tenancy by a notice dated 29.07.1997 Exhibit-I. The said suit was decreed in terms of settlement 9 which is reflected from the certified copy of the decree dated 15.02.1999 Exhibit-G. The rent receipts Exhibit-H and J collectively reflect the payment of rent for the year 2006 to 2009. In the above premises, I hold that the defendant was a tenant in respect of the suit premises. Thus, the above issues are accordingly decided. Issue no. 3 – The plaintiff issued a notice dated 1st October, 2009 Exhibit-K collectively with the speed post with acknowledgement card which reflects that defendant’s tenancy in respect of the tenanted premises was terminated as the tenancy in favour of the defendant was from month to month terminable on 15th days notice in writing. I find that notice dated 1st October, 2009 calling upon the defendant to quit and vacate the tenanted premises and deliver of peaceful possession unto the plaintiff thereof has been duly served on the defendant and the notice is legal, valid and sufficient as per Section 106 of the T.P. Act which provides for duration of certain leases in absence of written contract or local usage as under – “106. Duration of certain leases in absence of written contract or local usage.– (1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months’ notice; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice. (2) Notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub-section (1) shall commence from the date of receipt of notice. 10 (3) A notice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in that sub-section. (4) Every notice under sub-section (1) must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property.] On plain reading of the above provision it would go to show that no reasons are required to be given for termination of tenancy under Section 106 of T.P. Act 1882 because in the instant case there is no registered lease in favour of the defendant in respect of the suit premises. In this context Mr. Ghosh has referred to a decision in case of Payal Vision Ltd. Vs. Radhika Choudhary reported in (2012) 11 Supreme Court Cases 405 to argue that in suit for recovery of possession from a tenant whose tenancy is not protected under the provisions of the Rent Control Act, all that is required to be established by the plaintiff landlord is the existence of the jural relationship of landlord and tenant between the parties and the termination of the tenancy either by lapse of time or by notice served by the landlord under Section 106 of the Transfer of Property Act. In this aspect Mr. Ghosh further relied on a decision in case of Park Street Properties Private Limited Vs. Dipak Kumar Singh and Another reported in (2016) 9 Supreme Court Cases 268 (at para 17 and 19) which are reproduced hereunder for profitable consideration :- “17.A perusal of Section 106 of the Act makes it clear that it creates a deemed monthly tenancy in those cases where there is 11 no express contract to the contrary, which is terminable at a
notice period of 15 days. The section also lays down the
requirements of a valid notice to terminate the tenancy, such as
that it must be in writing, signed by the person sending it and be
duly delivered. Admittedly, the validity of the notice itself is not
under challenge. The main contention advanced on behalf of the
respondents is that the impugned judgment and order is valid in
light of the second part of Section 107 of the Act, which requires
that lease for a term exceeding one year can only be made by
way of a registered instrument.
19.It is also a well settled position of law that in the absence of a
registered instrument, the courts are not precluded from
determining the factum of tenancy from the other evidence on
record as well as the conduct of the parties. A three Judge bench
of this Court in the case of Anthony v. KC Ittoop & Sons, held as
“A lease of immovable property is defined in Section 105 of the TP Act. A transfer of a right to enjoy a property in consideration of a price paid or promised to be rendered periodically or on specified occasions is the basic fabric for a valid lease. The provision says that such a transfer can be made expressly or by implication. Once there is such a transfer of right to enjoy the property a lease stands created. What is mentioned in the three paragraphs of the first part of Section 107 of the TP Act are only the different modes of how leases are created. The first paragraph has been extracted above and it deals with the mode of creating the particular kinds of leases mentioned therein. The third paragraph can be read along with the above as it contains a condition to be complied with if the parties choose to create a lease as per a registered instrument mentioned therein. All other leases, if created, necessarily fall within the ambit of the second paragraph. Thus, dehors the instrument parties can create a lease as envisaged in the second paragraph of Section 107 which reads thus………
13.When lease is a transfer of a right to enjoy the property and such transfer can be made expressly or by implication, the mere fact that an unregistered instrument came into existence would not stand in the way of the court to determine whether there was in fact a lease otherwise than through such deed.
12 16. Taking a different view would be contrary to the reality when parties clearly intended to create a lease though the document which they executed had not gone into the processes of registration. That lacuna had affected the validity of the document, but what had happened between the parties in respect of the property became a reality. Non registration of the document had caused only two consequences. One is that no lease exceeding one year was created. Second is that the instrument became useless so far as creation of the lease is concerned. Nonetheless the presumption that a lease not exceeding one year stood created by conduct of parties remains un- rebutted.” (emphasis laid by this Court) Thus, in the absence of registration of a document, what is deemed to be created is a month to month tenancy, the termination of which is governed by Section 106 of the Act.” In respectful consideration of the cited decisions, I fully agree with the contention of Mr. Ghosh that in a suit for recovery of possession from tenant, it is not open for the tenant to even question the title of the landlord and the suit of this nature is quite maintainable after termination of tenancy under Section 106 T.P. Act because in case of unregistered lease agreement of immovable property, Section 106 T.P. Act is applicable as the tenancy of the defendant is deemed to be a lease from month to month.
Thus, the issue no. 3 is decided in favour of the plaintiff. Issue nos.1 and 5 – Both issues are taken up together for the sake of convenience in discussion and for brevity.
This fact cannot be lost sight of that the defendant company has undergone liquidation as submitted by Mr. Aritra Basu appearing for the liquidator appointed in the proceeding of liquidation. It is submitted that suit is not maintainable in law and in fact in the circumstances of the
13 present case. It is argued that pursuant to an order dated 26th October, 2017 passed by Hon’ble National Company Law Tribunal, Kolkata the defendant went into liquidation in Company Petition (IB) No. 213/KB/2017 filed under Section 10 of Insolvency and Bankruptcy Code 2016 (in short Code). In the said proceeding, an order for liquidation under Section 33 of the Code was passed seeking recommendation for Insolvency and Bankruptcy Board of India (IBBI) name of any Resolution Professional for appointment as liquidator. Ms. Mamta Binani was appointed as liquidator. It is argued that there was an agreement on 8th February, 1985 for execution of the lease deed in respect of the suit property. The plaintiff has relied on this agreement and derived benefit. Hence, the plaintiff cannot resile from the terms of this document and invited my attention to Exhibit-D, Exhibit-E and Exhibit-F to argue that plaintiff and the defendant followed the terms and conditions as recorded in the letter dated 8th February, 1985 as the defendant has admittedly tendered rents in terms of the said agreement. And the same was received by the plaintiff and it goes to show that terms and conditions were accepted by the plaintiff so the plaintiff cannot be allowed to resile from the said terms and conditions and the plaintiff should not be allowed to approbate and reprobate at the same time. To support his contention Mr. Basu relied on a decision in case of Shyam Telelink Limited Now Sistema Shyam Teleservices Limited Vs. Union of India reported in (2010) 10 Supreme Court Cases 165 wherein it has been observed thus–
“The unconditional acceptance of the terms of the package and the benefit which the appellant derived under the same will estop the
14 appellant from challenging the recovery of the dues under the package or the process of its determination. No dispute has been raised by the appellant and rightly so in regard to the payment of outstanding licence fee or the interest due thereon. The controversy is limited to the computation of liquidated damages of Rs.8 crores out of which Rs.7.3 crores was paid by the appellant in the beginning without any objection followed by a payment of Rs.70 lakhs made on 29th May, 2001. Although the appellant had sought waiver of the liquidated damages yet upon rejection of that request it had made the payment of the amount demanded which signified a clear acceptance on its part of the obligation to pay. If the appellant proposed to continue with its challenge to demand, nothing prevented it from taking recourse to appropriate proceedings and taking the adjudication process to its logical conclusion before exercising its option. Far from doing so, the appellant gave up the plea of waiver and deposited the amount which clearly indicates acceptance on its part of its liability to pay especially when it was only upon such payment that it could be permitted to avail of the Migration Package. Allowing the appellant at this stage to question the demand raised under the Migration Package would amount to permitting the appellant to accept what was favourable to it and reject what was not. The appellant cannot approbate and reprobate. The maxim qui approbate non reprobate (one who approbates cannot reprobate) is firmly embodied in English Common Law and often applied by Courts in this country. It is akin to the doctrine of benefits and burdens which at its most basic level provides that a person taking advantage under an instrument which both grants a benefit and imposes a burden cannot take the former without complying with the latter. A person cannot approbate and reprobate or accept and reject the same instrument.” A reference to a decision in case of State of Punjab And Others Vs. Dhanjit Singh Sandhu reported in (2014) 15 Supreme Court Cases 144 has also been made to the observation at page 20 and 22 to argue that the doctrine of approbate and reprobate is only a species of estoppel, it implies only to the conduct of parties and to argue that by the conduct of the party was to go for execution and registration of lease for thirty years initially renewable for further period of twenty-one years to be registered in due course as per term 5 of agreement of tenancy dated
15 8th February, 1985 Exhibit-C. Mr. Basu further pointed out that draft lease was forwarded to the plaintiff for approval but the same was not acted upon on the ground that the same was not in consonance with the agreement dated 8th February, 1985 and that plaintiff was always agreeable to execute a lease provided the same is in terms of the said agreement and that there were correspondences between the parties for execution of lease deed in favour of the defendants for a period of thirty years for which period the defendant was inducted as a monthly tenant as such a new agreement between the parties fructified and the earlier agreement ceased to have effect.
As I have discussed in the forgoing paragraphs that the lease draft was not settled by and between the parties and there is no registered lease deed in favour of the defendant. Therefore, the defendant cannot claim specific performance of agreement though in a reply to notice dated October 1, 2009 the defendant for the first time after long time had raised a demand for specific performance. It is well settled that a tenant cannot dispute the title of the landlord as per Section 116 A of the Evidence Act, 1872 (See: Kamaljit Singh Vs. Sarabjit Singh (2014) 16 SCC 472 paras 14 -16).
In rebuttal, Mr. Basu further placed reliance in case of R. Kanthimathi And Another Vs. Beatrice Xavier (Mrs) reported in (2000) 9 Supreme Court Cases 339 wherein it has been held that any jural relationship between two persons could be created through
16 agreement and similarly could be changed through agreement subject to the limitations under the law. Earlier when the appellants were inducted into tenancy it only means both agreed that their relationship was to be that of landlord and tenant. Later when the landlord decided to sell this property to the tenant and the tenant agreed by entering into agreement, they by their positive act changed their relationships as purchaser and seller. When the seller-landlord accepts the sum he actually acts under this agreement. This acceptance preceded by agreement of sale changes their relationship. This is what they intended. Once accepting such a change, their relationship of landlord-tenant ceases. I have gone through the decision cited on behalf of the defendant through liquidator which in my considered opinion is not well nigh within the facts and circumstances of the instant case as in this case lease draft was not accepted by either parties and no step taken on behalf of the defendant for execution and registration of the lease. Therefore, the relationship between the plaintiff and the defendant cannot be stated to be that of a lesser and lessee.
On the contrary, it is argued on behalf of the plaintiff that the defendant filed a suit being C.S. No. 2 of 2011 which is not maintainable in as much as the defendant was not ready and willing to continue the hearing of the said suit and the same was directed to be delisted by an order dated June 30, 2017 passed by the Hon’ble Justice Sahidullah Munshi. So, the defendant having failed to prove its readiness and
17 willingness to continue with the suit claiming for a specific performance of an agreement vide letter dated 8th February, 1985, the defendant is not entitled to claim any equitable relief under Specific Relief Act (see: I.S. Sikandar (Dead) By LRS Vs. K. Subramani & Ors. (2013) 15 SCC 27). Mr. Basu argued on behalf of the liquidator that the suit property is in possession of the liquidator. So, liquidator is entitled to defend the suits, prosecution, legal proceedings, civil or criminal in the name of and on behalf of the Corporate Debtor i.e. the defendant herein. Despite the order dated 26th October, 2017 being passed by the Hon’ble NCLT, Kolkata Bench, no steps were taken by the plaintiff to implead the liquidator in the present suit. It is further argued that since there is no pleading and issues framed in the present suit against the liquidator a decree cannot be passed against the liquidator and the judgment or the decree cannot be passed dehors the issues framed in the suit and the decree would be without jurisdiction and has relied on decision in cases of Shivaji Balaram Haibatti Vs. Avinash Maruthi Pawar, reported at 2018 (11) SCC 652, paras 24 to 26; Union of India Vs. E.I.D. Parry (India) Limited, reported at 2000 (2) SCC 223, para 4; Trojan & Co. Ltd. Vs. Rm. N.N. Nagappa Chettiar, reported at AIR 1953 SC 235, para 22. This Court is not entertaining the suit against the liquidator who is not a party to the suit. So, question of passing decree against the liquidator does not arise. It is pertinent to take judicial notice of an order dated September 11, 2017 passed in G.A. 2791 of 2017 wherein the
18 decision in case of M/s Innovative Industries Ltd. Vs. ICICI Bank & Anr. reported in AIR 2017 SC 1025 has been relied upon which held that the moment initiation of the corporate insolvency resolution process takes place a moratorium is announced by the adjudicating authority vide Sections 13 and 14 of the Code by which institution of suit and pending proceeding etc. cannot be proceeded with. This continues until the approval of a resolution plan under Section 31 of the said Code. Mr. Ghosh submitted that during pendency of the suit and after completion of evidence, insolvency proceeding was initiated against the defendants behind the back of the plaintiff and an order by National Company Law Tribunal (NCLT), Kolkata Bench dated May 1, 2017 was disclosed before this Hon’ble Court by the Advocate of the defendant to the effect that there was a moratorium for six months. As such, the hearing of the suit was adjourned. The moratorium period expired and there was no further extension. It is also pertinent to note that the liquidator appointed in the NCLT proceeding also appeared before this Hon’ble Court through Advocate Ms. Priyanka Tibrewal, as recorded in the order dated June 7, 2018 and purported to contest the suit. It is further submitted that the company liquidation has no right over property and there cannot be any legal impediment in passing a decree for recovery of possession in favour of the plaintiff. The liquidator has stepped into the shoes of the tenant/defendant and it is argued that status of the plaintiff is that of a creditor of a company in liquidation,
19 even if it is in possession of an asset of a third party. It is argued on behalf of the liquidator that the liquidator is not obliged to pay any rent to the plaintiff under the Code. Such contention of the liquidator on behalf of the defendant is baseless and without any legal basis for the reasons firstly that Section 35 of the Code provides for power and duties of liquidator empowering the liquidator to take into custody and control, only the assets, property, affects and actionable claims of the corporate debtor. The liquidator is only entitled to protect the estate and property of the corporate debtor and secondly, under Section 36 (1) of the said Code liquidator has to form an estate of assets mentioned under Sub-Section 3 of Section 36 of the Code. Section 36 (4) of the said Code specifically provides that asset owned by a third party which are in possession of a corporate debtor shall not for part of the liquidation estate. Thus, it is clear that the liquidator has fiduciary interest but has not direct interest because the right of tenancy cannot be claimed as assets or property affects and actionable claim of the corporate debtor/defendant of the suit. The provision of Section 12 of the Code provides for time limit for completion of insolvency resolution process which enshrines that corporate insolvency resolution process must be completed within a period of one hundred eighty days from the date of admission of the application to initiate such process with further extension of ninety days once which can be extended, if an adjudicating authority is satisfied that the subject matter of the case is such that
20 corporate insolvency resolution process cannot be completed within one hundred eighty days. It is expected that within the time frame the insolvency proceeding would be completed. It is submitted that time has not been extended and the moratorium announced by the adjudicating authority as per Sections 13 and 14 of the Code by which institution of suits and pending proceedings etc. cannot be proceeded which continues until the approval of a resolution plan under Section 31 of the said Code. With the passage of time the resolution process must have been completed now in absence of any evidence on contrary placed on record. The provision of Section 36(3)(a) and Section 36(4) cannot be overlooked by which provision the liquidator hands are tied.
Lastly, Mr. Basu submitted that the suit is not maintainable as the suit has been filed by a person who is not authorised under law to deposed and invites my attention to answer to question 129 of Arun Kumar Sharma who has deposed on behalf of the plaintiff company as the constitution power of attorney holder and he has signed the plaint. It is pointed out that admittedly Mr. Sharma has been working in the Sister concern for the last thirty years as Manager and so he is not competent to institute suit on behalf of the plaintiff. Mr Basu has referred to a decision in case of Janki Vashdeo Bhojwani And Another Vs. Indusind Bank Ltd And Others reported in (2005) 2 Supreme Court Cases 217 wherein it has been observed thus–
21 “Order III, Rules 1 and 2 CPC, confines only in respect of “acts” done by the power of attorney holder in exercise of power granted by the instrument. The term “acts” would not include deposing in place and instead of the principal. In other words, if the power of attorney holder has rendered some “acts” in pursuance to power of attorney, he may depose for the principal in respect of such acts, but he cannot depose for the principal for the acts done by the principal and not by him. Similarly, he cannot depose for the principal in respect of the matter which only the principal can have a personal knowledge and in respect of which the principal is entitled to be cross-examined.” In the present case as I have discussed above that Mr. Sharma who filed the suit on behalf of the company is a Manager of the Sister Concern of the plaintiff working for thirty years and in conversant with the facts and circumstances of the case and was authorised by execution of power of attorney of the plaintiff Exhibit-A pursuant to the resolution of the plaintiff company to that effect vide Exhibit-B. Therefore, I am unable to agree with the Mr. Basu learned Advocate for the liquidator who is no way a party to the suit and should not step into the shoes of the defendant. The duty of the liquidator under the Code provides for taking possession of the assets and affects an actionable claim of the corporate debtors. The right of tenancy in respect of the suit premises held by the corporate debtor/defendant cannot form estate of assets for the purpose of taking control and possession of the suit premises by the liquidator.
22 Yet a unreported decision dated 24.04.2019 in case of Amiaya Kanti Das And Ors. Vs. Sefalika Ash in GA No. 966 of 2019, APO No. 60 of 2019 and T.S. No. 25 of 2016 is referred to argue that whole of the evidence of Mr. Sharma has to be expunged being not a true power of attorney holder. I have gone through the decision which is not applicable in the given facts of the case.
In the context of the above discussion in the forgoing paragraph I hold that the suit is maintainable in law and in fact as the plaintiff has cause of action for the suit and there was an agreement for tenancy dated 8th February, 1985 between the parties with a term no. 5 for execution and registration of a lease deed in respect of the suit premises in favour of the defendant but the defendant neglected to perform his part as per the agreement. Thus the above issues are decided.
Issue nos. 6 and 7 both the issues are decided in the affirmative in the context of what has been discussed and held in the forgoing issues. Therefore, the plaintiff is entitled to a decree for recovery of possession and for mesne profits as prayed in the plaint. In the result suit succeeds. Consequently, the suit is decreed with cost on contest by the liquidator appointed for the corporate debtor/defendant. The plaintiff do get a decree for recovery of vacant, peaceful possession of the suit premises, morefully described in schedule E.
23 The defendant is directed to quit, vacate and deliver up the suit premises peacefully unto the plaintiff within two months from the date of the decree in default the plaintiff shall be entitled to put the decree into execution through Court.
The plaintiff is also entitled to a decree for a sum of Rs. 1,33,37,923/- for mense profits as pleaded in paragraph 22 together with interest @ 9% and further mesne profits to be determined in a separate proceeding on enquiry.
(SHIVAKANT PRASAD, J.)