Summary
A landlord let a commercial showroom in Kolkata at Rs.10,000 a month, with the tenant separately liable for municipal taxes. The landlord terminated the tenancy under Section 106 of the Transfer of Property Act and sued for eviction. It argued that rent plus the tenant's tax share exceeded the Rs.10,000 ceiling in Section 3(f)(i) of the West Bengal Premises Tenancy Act, 1997, so the Act did not apply. The plaint was rejected under Order 7 Rule 11 CPC. The Supreme Court held that Section 231 of the Kolkata Municipal Corporation Act treats the tenant's apportioned tax as rent only for the purpose of recovery. That tax becomes part of the rent only if the agreement says so. Section 18's five-per-cent revisions apply only to fair rent fixed under Section 17. The rent was not above Rs.10,000, the 1997 Act applied, and the suit was barred.
Issues
- Whether the share of municipal tax payable by a tenant under Section 230 of the Kolkata Municipal Corporation Act, 1980 and Section 5(8) of the West Bengal Premises Tenancy Act, 1997 forms part of the 'monthly rent' for the ceiling in Section 3(f)(i) of the 1997 Act.
- Whether the automatic revision of rent under Section 18 of the 1997 Act takes the rent above the ceiling.
Provisions considered
- Section 3(f)(i), West Bengal Premises Tenancy Act, 1997The Act does not apply to non-residential premises with a monthly rent above Rs.10,000. Rent fixed at exactly Rs.10,000, excluding taxes, kept the premises within the Act. (¶¶ 5.2, 11)
- Section 5(8), West Bengal Premises Tenancy Act, 1997This section obliges the tenant to pay its share of municipal tax as an occupier, but that obligation does not make the tax part of the rent. (¶¶ 7, 8)
- Sections 230 and 231, Kolkata Municipal Corporation Act, 1980The owner may recover half the property tax and the surcharge from the occupier. Section 231 gives the owner the remedies available for rent, creating a fiction limited to recovery. (¶¶ 7, 8)
- Sections 17 and 18, West Bengal Premises Tenancy Act, 1997The triennial five-per-cent increase under Section 18 applies only where fair rent has been fixed by the Controller under Section 17, which had not happened here. (¶ 10)
- Order 7 Rule 11, Code of Civil Procedure, 1908Because the 1997 Act applied, the suit under Section 106 of the Transfer of Property Act was impliedly barred and the plaint was rightly rejected. (¶ 11)
Held
- Calcutta Gujarati Education Society, read with its paragraph 46, holds only that the tax apportioned to a tenant is treated as rent so that the landlord can recover it. It does not make the tax part of the rent of the premises. (¶ 8)
- Whether tax forms part of rent depends on the tenancy agreement. If the tenant pays a sum expressly inclusive of taxes, the tax component is part of the rent. If the tenant pays tax separately under the agreement or under statute, it is recoverable as rent but is not part of it. (¶¶ 5.2, 8)
- Popat and Kotecha Property considered only paragraph 45 of Calcutta Gujarati Education Society. It is also distinguishable on facts, because there the agreed rent expressly included municipal taxes and rose with them. (¶ 9)
- Section 18 of the 1997 Act does not apply where fair rent has not been fixed under Section 17. The monthly rent remained Rs.10,000, which is not more than the ceiling, so the 1997 Act applied and the eviction suit under Section 106 of the Transfer of Property Act was barred. (¶¶ 10, 11)
Result
Appeals dismissed. The rejection of the landlord's plaint under Order 7 Rule 11 CPC was upheld. No order as to costs.