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Bengal Chemicals and Pharmaceuticals Limited & Ors. v. Ajit Nain & Anr.

Civil Appeal · 2019 INSC 740Decided 9 Jul 2019
Civil Appeal Nos. 5314-5315 of 2019
Justice R. Banumathi · Justice A.S. Bopanna

Background

Bengal Chemicals and Pharmaceuticals Ltd., a government enterprise, had leased out a building in Kolkata to the respondent, who ran a school there, for 21 years under a 1995 lease that expired in May 2014. After the lease expired, negotiations over renewal broke down, and the company initiated proceedings under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 before the Estate Officer. The Calcutta High Court quashed the Estate Officer's order and remitted the matter back to the Estate Officer for fresh consideration, prompting the company to appeal to the Supreme Court. Meanwhile, the respondent had stopped paying rent since June 2014 except for a one-time deposit of Rs. 25,00,000 made under High Court orders.

Decision Breakdown

The Supreme Court affirmed the High Court's order sending the matter back to the Estate Officer for a fresh decision, agreeing the respondent deserved a proper opportunity to present his defence rather than having it decided without one. However, since the respondent had occupied the valuable commercial premises without paying rent for years, the Court directed him to pay interim damages for use and occupation, Rs. 2,50,000 per month from June 2014 to May 2018, and Rs. 3,00,000 per month thereafter, with the arrears payable in three instalments. The Court made clear these amounts were tentative, to be finally determined by the Estate Officer, and warned that failure to pay any instalment would forfeit the respondent's right to contest, leading to an eviction order.

Lesson Learnt

A tenant who continues occupying premises after a lease expires and while litigation is pending cannot simply withhold rent: a court will typically require interim payment for the value of continued occupation even while the underlying dispute is sent back for a fresh, fair hearing.

Official source (sci.gov.in)View Judgment (PDF)

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