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Tenants to pay rent when lease not officially terminated: High Court of Calcutta

When a case determining the legality of the termination of a lease agreement is in the judicial machinery, the tenants, while occupying the same premises cannot escape from paying the required rent to the landlord. This was decided in the case of Green Band Apartments Private Limited & Ors.  vs. The Mint Matrix & Ors. [C.O. No. 1460 of 2020] in the High Court at Calcutta by Justice Shampa Sarkar.

The facts of the case are that the petitioners have challenged the order passed by the Civil Judge (Junior Division), 2nd Court at Alipore, The petitioners as plaintiffs filed suit against for a decree of recovery of vacant possession of the suit property, for a decree of a sum of Rs. 4,50,000/- as profits, tentatively calculated up to the date of filing of the suit, further mesne profits @ Rs. 50,000/- per day from September 9, 2016 till the delivery of vacant possession, damages, compensation and permanent injunction.

The petitioners are the joint owners of premises in a building Kolkata. The petitioners were interested to start a business of running a guest house it into a guest house consisting of 36 rooms. Then they entered into an agreement with the opposite party, to lease out the said floors for the purpose of running a guest house with effect from December 15, 2014. According to the lease agreement, it was the obligation of the opposite parties/defendants to obtain necessary licences and registration for running and operating the said business. During the course of running and operating the business, the petitioners came to know that the requisite licences, permissions and approvals. ven after repeated reminders, the opposite parties failed to comply with the terms of the said agreement and continued with their illegal activities. Thus the petitioners terminated the agreement. Subsequently the petitioners filed an application, seeking direction upon the opposite parties to deposit Rs. 48 lakh with interest @ 15% per annum on such amount before the court.

The lower court relied on the decision of this court in the matter of K.K. Saha & Co. Pvt. Ltd v. Ashok Agarwal reported in 2018 (1) CHN (CAL) 497, the Judge held that an order for payment of occupational charges could be passed only when a tenant having suffered a decree of eviction had preferred an appeal along with a prayer for a stay of the execution of the 4 decree. In the decision of the Delhi High Court in the aforementioned matter, it was held as follows: “. The combined effect of Order 12 Rule 1 and Order 39 Rule 10 of the Code of Civil Procedure is that a Court can, in a case of this kind, in fair exercise of its judicial discretion order for deposit of money pending decision of a suit.”

The court observed that such claims will be subject to the final decision of the suit but the defendants cannot avoid payment of the contracted rent and enjoy the premises for free during the pendency of the suit. The relationship of landlord and tenant is admitted saying “In my opinion, the opposite parties/defendants Nos.1 to 4 are liable to pay the agreed monthly rent at the last paid rate with all arrears payable.”

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