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Kali Prosad v. Jagadish Pada Opposite Party.

Calcutta High Court
Dec 19, 1951
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Factual and Procedural Background

This opinion arises from an application in revision concerning the nature of the relationship between two parties under an agreement related to the operation of a cinema business. The appeal court had previously held that the agreement constituted a letting within the meaning of the Rent Control Act. The petitioner challenged this finding, arguing that the opposite party was not a lessee and that the Rent Control Act provisions on fixing rent were therefore inapplicable. The agreement involved the first party, who had been conducting a cinema business, entering into an arrangement with the second party to carry on the cinema business on the premises, with a premium payment involved.

Legal Issues Presented

  1. Whether the agreement between the parties constituted a lease or letting within the meaning of the Rent Control Act.
  2. Whether the term "premises" as defined in Section 2(8) of the Rent Control Act includes furnished cinema premises, including furniture and fittings used in the business.

Arguments of the Parties

Petitioner's Arguments

  • The opposite party cannot be regarded as a lessee under the agreement.
  • The provisions of the Rent Control Act for fixing rent do not apply to this arrangement.
  • The agreement merely provided for the continuation of the cinema business on payment of a premium of Rs. 3000/- and was not a lease of the premises.
  • The definition of "premises" under Section 2(8) of the Rent Control Act does not include the kind of arrangement present in this case.

Opposite Party's Arguments

  • The agreement constituted a lease of the premises where the cinema business was conducted.
  • The agreement granted the second party the right to use the premises, furniture, machines, and fittings exclusively.
  • The second party was entitled to exclusive enjoyment of the premises in consideration of a lump sum monthly payment.
  • The agreement required the second party to pay all taxes and rates and allowed for expenditure on improvements to the premises, indicating a leasehold interest.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court analyzed the terms of the agreement and concluded that the arrangement granted the second party an exclusive right to use and enjoy the furnished cinema premises, including furniture and machinery. The court interpreted the definition of "premises" under Section 2(8) of the Rent Control Act broadly to include any building along with furniture and fittings affixed therein, without restriction to residential houses. It found that the agreement's terms, including the requirement for the second party to pay taxes and the possibility of improvements treated as loans against the premium, supported the conclusion that a lease existed. The court rejected the petitioner's contention that the arrangement was merely a business continuation on a premium without constituting a lease. Therefore, the court upheld the lower court's finding of letting within the meaning of the Act.

Holding and Implications

The court held that the agreement constituted a letting of furnished premises within the meaning of Section 2(8) of the Rent Control Act.

As a result, the provisions of the Rent Control Act apply to the agreement, and the lower court's decision was affirmed. The petitioner's application was dismissed with costs. No new precedent was established beyond the direct effect of confirming that cinema premises with furniture and fittings fall within the Act's scope.

Show all summary ...

G.N Das, J.:— This is an application in revision. The question in controversy between the parties is what is the nature of the relationship between the parties by virtue of an agreement which was entered into by them. The appeal court has held that there was letting within the meaning of the Rent Control Act. Dr. Sen Gupta appearing for the petitioner contends that on a true construction of the terms of the agreement the opposite party cannot be regarded as a lessee and the provisions of the Rent Control Act for fixing the rent would not be attracted. It would appear from the terms of the lease that the first party named therein who had been carrying on a business in cinema shows entered into an agreement with the second party who is the opposite party in this revision case, for the carrying on of the cinema business. According to Dr. Sen Gupta the arrangement merely provided for the further carrying on of the cinema business on a premium of Rs. 3000/-.

2. The contention of the opposite party, however, is that on a true construction of the agreement it was a lease of the premises on which the cinema business was being run. It would appear that the agreement entitled the second party to the use of the premises. It also entitled the opposite party to the use of the furniture, the machines and other fittings on the premises. An exclusive right to the enjoyment of the premises was conferred on the second party, in consideration of a lump payment per month. The agreement does not provide that the second party to the document must carry on the business. The agreement requires the second party to pay all taxes and rates. It entitles the second party to spend money for the improvement of the premises, the sum to be advanced being treated as loan to be set off against the premium on certain conditions. In my opinion, a perusal of the terms of the document clearly indicates that what was granted was a right to a furnished cinema house. An exclusive right to the enjoyment of the premises was conferred on B in consideration of a lump sum for month. Thus there was letting of the premises.

3. The question then arises whether, assuming it was a grant of a right to the use of a furnished cinema house, it would be regarded as letting within the meaning of the Act. Dr. Sen Gupta contends that this is not included in the definition of “Premises” as defined in Section 2(8) of the Rent Control Act. The word “Premises” includes the use of any furniture or fittings affixed in the building. The word “building” used in S. 2(8) is not restricted in any way as being confined to residential houses. In my opinion Section 2(8) of the Act is wide enough to include a case where premises on which a cinema was being carried on are let out. The question as to the basis on which the rent of such premises will be standardized is not a matter with which we are now concerned. The only question now is whether on a true construction of the agreement it can be said that there was a letting of the premises and secondly, whether the letting was included within the meaning of the word “Premises” as defined in Section 2(8) of the Act.

4. I have already stated that there was a letting of the premises, the second party being entitled to the exclusive use and possession of the premises on which the business was being run. I have also held that the word “premises” is wide enough to include any building including any furniture and fittings therein.

5. It cannot be said that the furniture and fittings in S. 2(8) cannot include the furniture as also machines which are used for the carrying on of a cinema business.

6. In this view the court below was right in its conclusion and this Rule must accordingly be discharged with costs.

7. Let the affidavit in reply filed in court today be kept on the record.

8. Harries, C.J:— I agree.

B/V.B.B

9. Rule discharged.