'Rent' Includes All Charges Paid By Tenant In Connection With Suit Premises: Calcutta HC While Including Commercial Surcharge & Municipal Taxes

Single Judge Bench of Justice Ravi Kapur held:

"Ordinarily, the term rent is comprehensive enough to include all payments agreed to be paid by the tenant to the landlord for use and occupation not only of the building and its appurtenances but also includes furnishing, electrical installations and other amenities agreed between the parties to be provided by and at the cost of the landlord. Thus, rent is the consideration or price paid for enjoyment of the suit premises." [Karnani Properties Limited vs. Augustin, AIR 1957 SC 309].

In this light, the Court considered commercial surcharge and municipal taxes as part of rent while determining whether the the commercial relationship between the instant parties was governed under the West Bengal Premises Tenancy Act, 1997 or the Transfer of Property Act, 1882.

The bench was hearing an application filed by the petitioner under Chapter XIIIA of the Calcutta High Court Original Side Rules in a suit for eviction and mesne profits, seeking summary decree of eviction against the respondent in respect of the suit premises which had been let out for commercial purposes.

The plaintiff-petitioner by a notice under S. 106 read with S. 111(h) of the Transfer of Property Act 1882 had sought for recovery of possession of the suit premises and mesne profits.

Counsels for the respondent placed reliance upon S. 3(f)(i) of the West Bengal Premises Tenancy Act, 1997 to argue that while the last paid aggregate rent amount in the instant case was above Rs. 10,000, the base rent amount as evidenced by rent receipts issued in respect of payments made by the respondent was below Rs. 10,000 without taking into account amounts paid by the respondent under the heads of property taxes and commercial surcharge. Accordingly, the respondent assailed the jurisdiction of the Court to entertain the instant suit on the ground that the commercial relationship existing between the parties was governed by the West Bengal Premises Tenancy Act, 1997 and not the Transfer of Property Act, 1882.

S. 3(f)(i) of the West Bengal Premises Tenancy Act, 1997 exempts the application of lease agreements which contemplate payment of monthly rent of more than Rs. 10,000 in respect of any premises let out for non-residential purpose within the limits of the Kolkata and Howrah.

The Court observed that payments made under the heads of property taxes and commercial surcharge were neither unconnected or unrelated to the enjoyment of said suit premises. Deeming that such payments form part of the phrase "monthly rent" within S. 3(f)(i) of the West Bengal Premises Tenancy Act, 1997, the Court held that in light of the last paid rent amount being more than Rs. 10,000, the matter was beyond the purview of the 1997 Act.

Finding that the commercial relationship between the instant parties was governed under the provisions of the Transfer of Property Act, 1882, the Court allowed the instant application by the plaintiff petitioner. On merits, the Court found no infirmity with the notice issued by the petitioner to the respondent under S. 106 read with S. 111(h) of the Transfer of Property Act 1882, duly determining the commercial arrangement by and between the parties and accordingly deemed such determination of the lease agreement to be valid.

Case: T.E. Thomson & Company Ltd. v. Rajshri Productions Private Limited, CS 257 of 2018

Date: 13.12.2022

Citation: 2022 LiveLaw (Cal) 369 

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