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TMI Blog1998 (11) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... . ) The building in question came up sometime in or about 1968 and the defendants were one of the early tenants. They have been in the building from 1970. The rate of rent that they pay is only one rupee per square foot. ( 6. ) In the plaint mention has been made of several controlled companies, division and departments of the plaintiff. When giving evidence, one Bhaskar Gupta came as the first witness of the plaintiff and he answered some 900 questions or so. He is the principal architect of the plaintiffs' case on facts. He has emphasized the need for centralization of the plaintiff' departments and controlled companies in the same building at 4, Mangoe Lane. ( 7. ) Thereafter , one Sunder Lall Mitra was called on behalf of the plaintiffs for the purpose of proving mesne profits, which are claimed in the plaint at only ₹ 15/- per square foot. ( 8. ) While granting stay in aid of the appeal, by our interlocutory appellate order dated 24-12-1996 we have permitted occupation by the appellant during pendency of the appeal on deposit of charges @ twenty five rupees per square foot on 24,000 square foot. ( 9. ) The tenanted area is only 10 square foot less tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence and the summary notes a thorough examination, we find that out of the 37,000 square foot claimed by the plaintiff practically the whole (34,700 square foot) is covered by the need for shifting of the plaintiff' own departments, and reopening closed departments; some closed down, as we have said, when the plaintiff shifted from Fairlie Place. It is a matter of interest, but not of much relevance, that Unit Trust was introduced to the Fairlie Place area when Food Corporation refused to move in, and while the appeal was being heard, the building got largely gutted by fire and Unit Trust were thrown out, at least temporarily. A defendant' witness had mentioned about the lack of fire-fighting equipment there. ( 17. ) However , that the departments are the plaintiff' (sic) manned by the plaintiff' employees and are intended to be expanded by employment of further employees by the plaintiff is stated in detail by Bhaskar Gupta. This part of the evidence is not cross-examined upon at all. ( 18. ) The cross-examination has proceeded on the basis that these departments would work for the plaintiff, as well as, and in most cases even more for, the other companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uit. However, two other departments were the plaintiff' departments at the date of filing of the suit, but were turned into companies after the filing. ( 23. ) Numerous authorities were cited as to whether the plaintiff company can obtain eviction of the tenant in West Bengal on the basis that the plaintiff needs the space for companies which are controlled by it. We are not called upon to decide the general question whether a holding company can, in every case, obtain eviction of its tenant on the ground of requirement of space for its subsidiaries or economically controlled group companies. We are called upon to decide here, and that too for the limited balance amount of less than 2500 (37000 less 34700) square foot, as to whether the landlord' requirement changes or ceases to be the landlord' requirement if its 3 departments are converted into separate companies at its own choice. The plaintiff claimed 13200 square foot for its departments converted into companies. So much space is not even available with Food Corporation if the plaintiff gets the full 34700 s. ft. for its own departments. No exact case, however, could be found where the facts are on all fours. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose for the landlord would be to let out the available alternative accommodation, and thereafter also, continue to press for eviction of the statutory tenant. Mr. Chatterjee argued that bringing over controlled companies to the 12,000 s. ft. or so of space, was, on the part of the plaintiff, as impermissible as letting out the space. He showed us the evidence that at 4, Mangoe Lane, the plaintiff company takes ₹ 4/- per s. ft. of table space even from its controlled companies. ( 28. ) Section 13(1)(ff) mentions the lack of availability of alternative accommodation as important. The words are .......... and the landlord ........... is not in possession of any reasonably suitable accommodation. Mr. Chatterjee argued that if the landlord has ceased to be in possession of suitable accommodation because of his own deliberate acts, he cannot even thereafter claim possession from the statutory tenant, because of his unsatisfied need, he having deliberately kept his need unsatisfied. ( 29. ) If the three controlled companies of the plaintiff are not looked upon as separate entities for tenancy purposes, then this objection of the defendants would fail. This point is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and needs of natural persons (see the cases of Mst. Bega Begum reported at AIR 1979 SC 272, K. V. Muthu reported at AIR 1979 SC 628 (sic). Bhairab Chandra Nandan reported at AIR 1988 SC 396, Smt. Bibhabati Ghosh reported at AIR 1989 Cal 244, Himanshu Bikash Das reported at (1991) 1 CLJ 392, Ajit Kumar Majumdar reported at 94 CWN 977, a Single Bench decision in Puspa Lata' case, reported at 85 CLJ 74 and Krishnan Nair reported at (1987) 4 SCC 404 : (AIR 1987 SC 2199) (for son' business, but Tamil Nadu section not expressly quoted). Also Mr. Mitter gave cases where the conversion of a partnership or a single partner' tenancy into a company tenancy, when made by the tenant, was held not to change materially the real tenant so as to affect the position and possession of the tenancy (see M/s. Madras Bangalore Transport Co. reported at AIR 1986 SC 1564 and a Delhi D.B. decision in Inder Mohan Khanna' case, reported at (1978) 2 Ren CJ 99. ( 33. ) Both Mr. Mitter and Mr. Chatterjee relied on passages from pp. 159-177 of the 6th Edition of Gower' Company Law, referring to many English cases regarding piercing of the corporate veil. Both of them cited also cases on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the landlord is an individual, for occupation by a son or daughter of his over eighteen years of age.......... Landlord and Tenant Act, 1954, S. 30(1)(g) :- ........a landlord may oppose an application (for a new tenancy under the Act) .......... (on) ... grounds .... that on the termination of the current tenancy the landlord intends to occupy the holding for the purposes, or partly for the purposes, of a business to be carried on by him therein, or as his residence. ( 35. ) Mr . Mitter cited the single Judge' decision in Nuthall Ltd., (1947) 2 All ER 384, where on the basis of the 1927 Act, the film people odeon were allowed to refuse a new lease on the ground that they intended to carry on a Cafe business in conjunction with film shows. Their Cafe managers would not be themselves, but Nuthall, who would occupy the Cafe and not Odeon themselves. It was said :- ..........a mere legal right to possession is not enough to constitute occupation for the purposes of this provision. (390G); ........if not an individual, any physical occupation must clearly be by proxy. (391A); and Odeon may be briefly described as a closely associated company. ( 36. ) In two ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of veil is, in our opinion, impermissible. Although the New Horizons case reported at (1995) 1 SCC 478 : (1995 AIR SCW 275) mentions (para 34, quotation from Renusagar case) that the horizons of veil lifting are expanding and although the Indian Courts would be more ready to lift the veil wherever the justice of the case so demands (a view not accepted by the House of Lords as can be seen from the case of Adams v. Cape Industries reported at (1990) 2 WLR 786 mentioned in Gower, p. 166, ftnt. 13, referred to above), yet the justice of the case cannot demand that we strip the owner plaintiff company of its veil altogether and look at the corporators themselves for the requirement of the plaintiff company' space for 6 the plaintiff company' own occupation. ( 41. ) In deciding this point, we must again emphasize that the degree of control exercised by the plaintiff company over its subsidiaries and group companies has not come under any challenge from the defendant at all. Exhibit F, which gives the shareholding and controlling pattern of 15 companies, as against only 8 mentioned in the plaint, was not a subject of challenge in the Court below. The refresher sheet was ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of need of the landlord while invoking successfully provisions allowing for possession for the landlord' own occupation; so also in the case of Mattulal, AIR 1974 SC 1596, esp. para 12. Thus, in our opinion, there should be the presence of this need, of the landlord itself, in whatever manner the actual words of the statute might be interpreted. Interpreting Section 13(1)(ff) of the West Bengal Premises Tenancy Act we are also of the opinion that the element of the landlord' need must be present if this provision is to be successfully invoked. The words in this section must be construed as a whole and not dissected into different parts. It would be improper to try to see whether the different parts are independently satisfied. ( 46. ) For example, the words for his own occupation , if interpreted to mean for the occupation of the plaintiff company alone, would lead to results which are in conflict with the ratio, that for successfully invoking such provisions, the element of need of the landlord is to be present. Were we to give this part of the phrase such a restricted meaning, we would be generating cases where in spite of the landlord' own real need, it cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... together with its departments in the same centralized building owned by it. In our opinion the taking of the charge is an economic arrangement made by the plaintiff at its own unilateral choice, and this is not akin to letting out the space to outsider third parties. ( 49. ) In the Court below the allowance for possession was made on the basis (largely) that the employees of the plaintiff would require 85 square feet each for occupation. Both sides have felt aggrieved with this method of calculation. This 85 square feet is mentioned in the notes of the plaintiff also, except for Directors. But the learned Judge in the Court below has calculated it on the basis of the average occupation per employee by the defendants in their tenanted portion, though the notes, based on evidence, give such area as 82 sq. feet. ( 50. ) We do not feel called upon to enter into these calculations as, if the evidence of the sole witness of the plaintiff is to be accepted, there is absolutely no reason why a part of it should be accepted and another part rejected. If the defendant' only defence, that the requirement of the plaintiff, is a way of smuggling in the requirement of the plaintiff' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealing in India, as they have in England, although perhaps not in Ireland (see Phipson, para 1593). Let us see how this rule operates on the facts and the first trial of this case, after one interposing paragraph. ( 56. ) We have duly noted, that as regards one of the two departments converted into companies during the pendency of the suit, Bhaskar Gupta mentioned the name in his evidence, but the exact area needed for it (2500 sq. ft.) is not mentioned, not even once, in his evidence, only in the notes of arguments the estimated requirement of 2500 sq. ft. is given. This we discount, since notes cannot replace the necessity for oral evidence. However, the mention of this 'department company' remains, and the claim for floor area made for the other department company, namely McNeill International and the two other Kilburn companies, which were converted before filing of the suit, would bring the claim to a figure in excess of what is possessed by the Food Corporation, if these are added to the claims made for the departments of the plaintiff which have remained as departments. ( 57. ) The sketchiest part of Bhaskar Gupta' evidence is, to take it as an illustrativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eby impliedly conceded that it had no case, or a weak case on facts. It would be wholly improper, in our opinion, and as correctly argued by Mr. Mitter, to allow the defendant to make a volte-face now, and contend that in the Court below the defendant did not have a weak case, but that its case suffered from a weak conduct of it. ( 61. ) We , therefore, allow the plaintiff' claims in full. The cross-objection is also allowed and eviction is permitted to be had from the entirety of the three floors under occupation of the defendant at premises 4, Mangoe Lane. The evidence regarding mesne profits was equally, if not even more unchallenged during 9 cross-examination. Sundar Lall Mitra had mentioned several rates ranging from 28 rupees per square foot to even near 50 rupees per square foot. The claim in the plaint is a modest 15 rupees per square foot. We do not think it will be just to the parties, although they are perhaps both rich enough to bear litigation costs, to send them now to a referee as has been directed in the Court below. On the basis of the evidence (we have to exercise great judicial restraint not to say on the basis of well-known facts also, but we do not say i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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