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Case Comment: M/S Popat And Kotecha Property v/s Ashim Kumar Dey

The prerequisite in this context is that it is a rented place, the landlord or owner is someone who has acquired this property either by inheritance or by purchase or gift, the landlord is the natural or legal person to whom Rent is paid.

A tenant is someone who pays the landlord the rent in return for the occupancy of the property. The relationship between landlord and tenant is often perceived as contentious and antagonistic in India but is basically demand-driven.

No, the relationship begins with sharpness and therefore it is important to make the pacts that either party will make to make it pleasant, fruitful, and economically rewarding, as a balance needs to be struck and the pendulum not too far in direction one of the parties, as the same person who owns the property can also be a tenant in another city or another area of ​​the same city or municipality.[1]

Rent Control sets a legal limit on the maximum rent, or in other words, limits the rent as it deems appropriate according to the rules set by the state.

In the following case of M/S Popat & Kotecha Property v. Ashim Kumar Dey, As per the West Bengal premises Tenancy Act by Amendment Act No. 14 of 2001 with effect from 10th July 2001 [which had incorporated sub-section (8) to Section 5], it was to be decided that whether the tenant can be evicted on the the basis that there was a default in the payment of the Municipal Taxes as apportioned by the landlord.[2]

Facts And Issues Of The Case
Facts:
  • This appeal is against the order dated 7th December 2016 passed by the Calcutta High Court in a proceeding under the West Bengal Premises Tenancy Act, 1997.
     
  • The relevant lease agreement between the parties were signed in 1991, according to which the parties had agreed that the rent includes all local taxes to be paid and if these taxes are increased, the rent is to be increased proportionately.
     
  • With the amendment of the law on July 10, 2001, and after the addition of paragraph 8 of Article 5, the obligation to pay the municipal tax/taxes fell specifically on the tenant in his capacity as a resident.

    Section 5(8) says that:
    Every tenant shall pay his share of municipal tax as an occupier of the premises in accordance with the provisions of the Kolkata Municipal Corporation Act, 1980 or the West Bengal Municipal Act, 1993.
     
  • In the present case, the property tax payable on the claimed property was revalued and improved. Several tenants were occupied in the lawsuit.
     
  • The landlord distributed the tax to the tenants and issued a decision on this on February 7, 2003. The defendant applied for a decision on 29th March 2003 in the interest of a harmonious relationship between tenant and landlord.
     
  • Since the defendant had not paid the the amount owed as his share of the municipal tax, the landlord initiated the eviction proceedings for failure to pay the rent by the defendant.[3]

    The court of the first instance dismissed the landlord's action because no evidence of the property tax increase had been submitted and the defendant a tenant had deposited the monthly rent with the rental manager so that the tenant was not to be regarded as a defaulting party.
     
  • On appeal, the High Court upheld the the decision of the learned court of the first instance, albeit on a different basis.
     
  • The High Court ruled that even if municipal taxes are included as part of the rent payable, no rent increase will be made by unilateral notice from the landlord under Article 20 of the 1997 Act and that such an improvement will be made by the Comptroller of. rents must be arranged. Since the above condition was not met, the high court rejected the landlord's appeal.

Issue:
  • In the present case, the rental agreement included the municipal taxes in the monthly rent, and any improvement in the same would also lead to an improvement in the monthly rent.
  • According to Article 5 (8), as the tenant of the premises, the obligation to pay municipal taxes fell on the tenant, so the relevant clauses of the lease were replaced by the legal obligation imposed on the tenant by the change in the law.

Judgement
This appeal is against the order dated 7th December 2016 passed by the Calcutta High Court in a proceeding under the West Bengal Premises Tenancy Act, 1997 for eviction of the tenant on the ground that the tenant had defaulted in payment of his share of municipal tax as an occupier under the Kolkata Municipal Corporation Act, 1980. In this case, it was evident that there was a default on the part of the tenant. The application of the landlord for eviction of the tenant was allowed in this case.[4]

While taking the case of Calcutta Gujarati Education Society and another vs. Calcutta Municipal Corpn. and others as a precedent said that:
The whole amount of tax is recoverable from the lessor and may also be recovered from the tenant or sub-tenant through the attachment of the rent. In the case where the lessor or landlord has paid the whole tax including the a portion of tax payable by the tenant or sub-tenant, the landlord has to be equipped with the power to get himself reimbursed by recovery of the portion of the tax paid by him on behalf of the tenant. Section 231 of the Act, therefore, creates a fiction that the tax apportioned on the tenant would be treated as rent and would be recoverable as such.

The word rent has not been defined in the tenancy law and this Court has taken note of this the legal position in the case of Puspa Sen Gupta v. Susma Ghose (1990) 2 SCC 651 which arose out of the provisions of the Tenancy Act applicable to West Bengal. Rent is a compendious expression which may include lease money with service charges for water, electricity and other taxes leviable on the tenanted premises.

Although the provisions of the Calcutta Municipal Corporation Act of 1980 are definite, in contrast to the landlord, the tenant has the primary liability. Also to challenge this through appeals, etc., the 1980 Act does not provide for the valuation of part of the property occupied by tenants or various parts of the property occupied by different tenants, but the Act stipulates that the taxpayer is paid according to section 230 of Act of 1980.

The principal responsible person is the owner who has the right to collect part of the tax paid by him on behalf of the tenant. If necessary, the cost of the occupied area corresponds to the value of the total area of ​​the property. According to the 1980 law, if the landlord does not pay taxes, the rent paid by the tenant is liable to be attached.[5]

In In this case, the defendant tenant's violation of regulations is obvious because the tenant's municipal tax liability exceeds the obligation to pay rent under Article 5 (8) of the law. According to the 1997 Act, the High Court cannot require the landlord to obtain a formal rent increase order from the rent manager.

Judgement Analysis
High Court Judgment:
Tarun Kumar J. set aside the order that was given by the trial court and asked to dismiss the application u/s 7(2) of the West Bengal Premises Tenancy Act of 1997 on the basis that there was less evidence present at the time of the application and asked both the parties to start fresh with the fresh application. It was also said that by providing one notice to the tenant stating the payment of the taxes by the tenant cannot be done by the landlord under section 22 of the West Bengal Premises Tenancy Act of 1997.

While after the amendment of the act and incorporation of clause 8 to section 5 then the duty to pay all the taxes fell on the tenant, it was an obligation of the court to consider the amendment in the act which was applicable from 10th July 2001 and the case was filed in the year 2003 by the landlord as well as maybe the evidence was not provided clearly but it was clear from the facts of the the case that the duty to pay extra taxes which were increased with the time was to be paid by the tenant, this was clearly stated in the agreement signed by the tenant and the landlord as well as when the tenant denied any agreement between the landlord and tenant the court must have understood the intentions of the tenant to not pay the rent. While the landlord paid the taxes which were to be paid by the tenant was the duty of the court to ask the tenant to pay the rent which was paid by the landlord along with the eviction of the landlord's property.

Supreme Court Judgment:
While the supreme court held that the duty to pay the increased taxes were on the tenant and in no way that is to be paid by the landlord as the landlord-tenant the agreement stated the increased taxes to be paid by the tenant himself and if the tenant fails to do so so then he/she can be evicted from the premises by the landlord.

Even in the following case before sending the notice of eviction to the tenant, the landlord asked the tenant for the payment of the taxes which were not paid by the tenant later on. Also after the amendment of 2001 and incorporation of clause 8 to section 5 of the Kolkata Municipal Corporation Act 1980 which stated the obligations of the tenants to pay any share of increased municipal tax as an occupier of the premises. The rent agreement between the parties was executed in the year 1991.

Default on the part of the tenant was clear which was correctly decided by the Supreme court.

I believe that the court took a correct stand in the following case and even proper reasoning was provided by them unlike what was earlier given by the High Court. Considering all the facts and issues of the case along with the statutory amendments which took place in the course of the case were duly understood and put together precisely, correct cases were stated as the precedent in the case due to which the judgment was precise and understandable.

End-Notes:
  1. Fundamentals of Rent Control Legislation in India along with Rent Acts of All States, 1984, by R C Kochatta.
  2. Tenants can be evicted for not Paying Municipal Taxes under West Bengal Tenancy Act https://taxguru.in/corporate-law/tenants-evicted-paying-municipal-taxes-west-bengal-tenancy-act.html
  3. M/s Popat & Kotecha property & ORS. Vs Ashim Kumar Dey (Supreme Court of India) Civil Appeal No. 8149 of 2018
  4. Advocate Cheney ceil, Cheney ceil lawyer, Evict Tenants from your Property, Evict Tenants in Kolkata, Evict Tenants in west Bengal, help eviction of tenant Kolkata, help eviction of tenant West Bengal, legal help evict tenant Kolkata, legal help evict tenant West Bengal, Property in West Bengal, tenant eviction West Bengal, Tenants eviction in Kolkata, Tenants in West Bengal
  5. M/s Popat & Kotecha property & ORS. Vs Ashim Kumar Dey (Supreme Court of India) Appeal Number: Civil Appeal No. 8149 of 2018

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