2003 (3) TMI 716 - SC - Indian Laws

Summary

Issues Involved:

1. Whether the respondent firm can claim the status of sub-tenant and protection against eviction under the West Bengal Premises Rent Control Act, 1950.
2. The validity of the execution of the compromise decree against the firm.
3. The applicability of res judicata and limitation in the execution proceedings.
4. The status and rights of the firm as a direct tenant under the landlord.

Detailed Analysis:

1. Status of Sub-Tenant and Protection Against Eviction:
The primary issue is whether the respondent firm can claim the status of sub-tenant and protection against eviction under the West Bengal Premises Rent Control Act, 1950. The court examined the history of the tenancy and sub-tenancy, noting that Allenberry & Co. (the tenant) had surrendered the tenancy by a formal notice on 31.8.1953. The landlord obtained a compromise decree of eviction against Allenberry & Co. on 27.4.1955, which included the right to take legal steps to evict sub-tenants. The firm running Waldorf Restaurant claimed it was inducted as a sub-tenant before the surrender and thus sought protection under Section 13 of the Act. However, the court found that the firm was registered on 1.3.1954, after the surrender of the tenancy, and thus could not claim the status of a sub-tenant or protection under the Act.

2. Execution of the Compromise Decree:
The firm resisted the execution of the compromise decree by filing various suits and applications over the years. The court noted that the execution of the compromise decree was delayed due to the firm's tactics. The learned Single Judge of the Calcutta High Court allowed the execution application, concluding that the firm could not claim the status of a protected sub-tenant. The Division Bench, however, set aside this judgment, holding that the firm had become a tenant directly under the landlord by operation of law. The Supreme Court disagreed with the Division Bench, restoring the Single Judge's decision and allowing the execution of the decree.

3. Applicability of Res Judicata and Limitation:
The court addressed the plea of res judicata, noting that since both parties had filed cross suits and the courts concluded that their remedies lay in execution proceedings, the plea of res judicata was not applicable. Regarding the limitation, the court found that the time spent by the landlord in prosecuting civil proceedings bona fide and with due diligence should be excluded under Section 14 of the Limitation Act, thus rejecting the limitation bar against the appellants.

4. Status and Rights of the Firm as Direct Tenant:
The court examined whether the firm could claim the status of a direct tenant under the landlord. It was held that Waldorf Restaurant, as a trade name, was not a legal entity. The original sub-tenant, Eng Chick Wong, who was the sole proprietor, could have claimed the status of a direct tenant. However, after his departure and the formation of the partnership firm, the firm could not claim such status. The court emphasized that the firm, which came into existence after the surrender of the tenancy, could not claim the protection of the Act of 1950. The Division Bench's assumption that the firm had become a direct tenant was erroneous, as the partnership agreements were not disclosed, and there was no evidence that the leased premises became the property of the partnership.

Conclusion:
The Supreme Court concluded that the firm could not claim the status of a direct tenant under the landlord and was not protected under the Act of 1950. The impugned judgment of the Division Bench was set aside, and the judgment of the learned Single Judge was restored. The appeals were allowed, and the respondent firm was directed to vacate the premises. The appellant was also awarded full costs incurred in the courts below and in the Supreme Court.