2019 (6) TMI 1014 - HC - Indian Laws

Eviction of a lessee of the first respondent from a property belonging to the first respondent - HELD THAT - The lease dated August 9, 2006 was granted by the first respondent to the fourth respondent on various terms and conditions. Apparently, the fourth respondent failed to honour its obligations under the deed of lease dated August 9, 2006. Apparently, the first respondent obtained a non-functioning report on March 27, 2014. It issued a showcause notice dated January 11, 2017 to the fourth respondent and a hearing notice dated May 11, 2017. It also obtained a further nonfunctioning report on June 21, 2017. The prescribed authority issued an order terminating the lease on November 14, 2017. The prescribed authority also passed an order requiring possession on January 19, 2018. The first respondent obtained possession of the immovable property on February 16, 2018. The proceedings undertaken by the first respondent was under the provisions of the Act of 1976. Although, the first respondent is entitled to prefer an appeal from an order passed by the prescribed authority, the first respondent did not do so. There are no ground to interfere with the decision of the first respondent to terminate the lease and take over possession thereof - petition dismissed.

Issues:
1. Jurisdiction of prescribed authority under West Bengal Government Premises (Tenancy Regulation) Act, 1976.
2. Rights of a mortgagee in case of eviction of lessee.
3. Consent of lessor for mortgage of leasehold rights.
4. Non-performance of lessee's obligations leading to termination of lease.

Issue 1: Jurisdiction of prescribed authority under West Bengal Government Premises (Tenancy Regulation) Act, 1976:
The petitioner challenged the decision of the prescribed authority directing eviction of a lessee under the Act of 1976. The prescribed authority exercised jurisdiction to pass the eviction order. The first respondent initiated proceedings for eviction against the lessee based on events stipulated in the lease agreement. The prescribed authority issued notices and orders in accordance with the provisions of the Act of 1976. Despite the availability of an appeal provision, the lessee did not challenge the eviction order.

Issue 2: Rights of a mortgagee in case of eviction of lessee:
The petitioner, as a mortgagee, claimed that its valuable security was affected by the eviction decision. The petitioner argued that if informed earlier, it could have taken steps under the SARFAESI Act, 2002. However, the Senior Advocate for the first respondent contended that the mortgagee cannot have rights superior to those of the lessee. Referring to the terms of the lease agreement, it was established that the lessor retained the right to terminate the lease and take possession upon specified events, as provided in the deed of lease dated August 9, 2006.

Issue 3: Consent of lessor for mortgage of leasehold rights:
The first respondent granted consent for the lessee to mortgage the leasehold rights to the petitioner. However, this consent was subject to the rights of the lessor as mentioned in the lease agreement. The lessor retained the right to evict the lessee in case of default, as per the terms of the consent letter dated September 13, 2006. The consent was conditional and did not absolve the lessee from its obligations under the lease agreement.

Issue 4: Non-performance of lessee's obligations leading to termination of lease:
The lessee failed to honor its obligations under the lease agreement, leading to the lessor obtaining non-functioning reports and issuing showcause notices. The prescribed authority terminated the lease and ordered possession to the lessor under the Act of 1976. The lessor exercised its rights as per the terms of the lease agreement, and the decision to terminate the lease and take possession was upheld based on the principles established in a prior judgment.

In conclusion, the High Court dismissed the petition, finding no grounds to interfere with the decision of the first respondent to terminate the lease and take over possession of the property. The judgment emphasized the rights of the lessor as per the lease agreement and established legal principles regarding the rights of a mortgagee in cases of eviction of a lessee.

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