2005 (4) TMI 613 - HC - Indian Laws

Summary

Issues Involved:
1. Enforceability of the agreement for fixation of rent through Government valuers.
2. Jurisdiction of Civil Court versus Rent Controller under the West Bengal Premises Tenancy Act, 1956.
3. Applicability of Section 23 of the Contract Act in the context of the West Bengal Premises Tenancy Act, 1956.
4. Validity of specific performance of an agreement that conflicts with statutory provisions.

Issue-wise Detailed Analysis:

1. Enforceability of the agreement for fixation of rent through Government valuers:
The core issue was whether the agreement between the parties to appoint Government valuers for fixing the rent could be specifically enforced. The plaintiff-landlord sought specific performance of an agreement where both parties agreed to appoint Government valuers to assess the valuation of the Godown and fix the rent as per Government Rules. The defendant had not honored this agreement, prompting the lawsuit.

2. Jurisdiction of Civil Court versus Rent Controller under the West Bengal Premises Tenancy Act, 1956:
The defendant contended that the Civil Court had no jurisdiction to enforce such an agreement, as the matter of fixation of fair rent or increase of existing rent should be addressed by the Rent Controller as per Sections 8 to 12 of the West Bengal Premises Tenancy Act, 1956. The learned Trial Judge, however, overruled this objection and passed a preliminary decree for specific performance, which was challenged in the appeal.

3. Applicability of Section 23 of the Contract Act in the context of the West Bengal Premises Tenancy Act, 1956:
The appellant argued that the agreement to refer the dispute to Government valuers for rent assessment was violative of the West Bengal Premises Tenancy Act and thus hit by Section 23 of the Contract Act, which renders agreements void if they are contrary to public policy or statutory provisions. The appellant relied on several precedents to support this contention.

4. Validity of specific performance of an agreement that conflicts with statutory provisions:
The respondent countered that the West Bengal Premises Tenancy Act did not explicitly bar alternative methods of rent fixation agreed upon by the parties. The respondent cited various judgments to argue that the agreement should be enforceable. However, the court held that statutory provisions based on public policy, such as those in the West Bengal Premises Tenancy Act, cannot be overridden by mutual agreements that are inconsistent with those provisions.

Judgment Analysis:

The court concluded that the West Bengal Premises Tenancy Act, 1956, being a statute based on public policy, mandates specific procedures for rent fixation and enhancement, which cannot be bypassed by mutual agreement. The court emphasized that Sections 8 to 12 of the Act provide the exclusive mechanism for determining fair rent and any agreement contrary to these provisions cannot be specifically enforced.

The court held that the learned Trial Judge erred in law by granting a decree for specific performance of an agreement that was in conflict with the statutory provisions of the West Bengal Premises Tenancy Act. The court reiterated that if the landlord believes the existing rent is inadequate, the proper recourse is to approach the Rent Controller, not to enforce an agreement that contravenes the Act.

The court set aside the judgment and decree of the learned Trial Judge and allowed the appeal, emphasizing that statutory provisions cannot be waived or altered by private agreements if they are designed to protect public policy interests.

The appeal was allowed, and the previous interim direction for depositing specified amounts was recalled, permitting the appellant to withdraw the deposited amount. The court did not award any costs, considering the facts and circumstances of the case.

Separate Judgment:
R.N. Sinha, J., concurred with the judgment delivered, agreeing with the analysis and conclusions reached.