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Castle Wood (India) v. Life Insurance Corporation Of India .
Factual and Procedural Background
The revisional application arises from an order dated August 17, 1988, passed by the Estate Officer under the Public Premises (Eviction of Unauthorised Occupation) Act, 1971 (“Act”), which held that an application by an occupier for assessment of arrears of rent and for direction of payment under Section 7 of the Act was not maintainable. The petitioner, a lawful occupier of a public premise governed by the Act, alleged that the opposite party, Life Insurance Corporation of India, had accepted rent till March 1997 but refused rent for April 1997 at an increased agreed rate. Subsequent attempts by the petitioner to pay rent were refused by the opposite party, who also declined to accept payment by cheque. The petitioner filed an application under Section 7(1) of the Act before the Estate Officer seeking adjudication of arrears and direction for payment. The Estate Officer rejected the application on the ground that his jurisdiction was limited to eviction proceedings and incidental acts, and he could not pass directions for payment of rent. Dissatisfied, the petitioner filed the present revisional application under Article 227 of the Constitution of India.
Legal Issues Presented
- Whether the Estate Officer has jurisdiction under Section 7(1) of the Public Premises Act to entertain an application by a lawful occupier for adjudication of arrears of rent and direction for payment before eviction proceedings are initiated.
- Whether the order refusing to entertain such an application is appealable under Section 9 of the Act.
- Whether the petitioner has any alternative remedy other than approaching the Estate Officer under Section 7(1) of the Act for adjudication of rent arrears.
Arguments of the Parties
Petitioner's Arguments
- Section 7(1) of the Act authorizes the Estate Officer to entertain applications for adjudication of arrears of rent at the instance of a lawful occupier.
- The Act is self-contained and excludes jurisdiction of Civil Courts and Rent Controllers for disputes regarding arrears under Section 7(1).
- The Estate Officer erred in refusing to exercise jurisdiction vested in him and did not consider the merits of the application.
Opposite Party's Arguments
- The Estate Officer has no jurisdiction to direct the owner to accept rent; his role is limited to passing eviction orders and incidental acts.
- The order under Section 7 is appealable under Section 9, and the existence of an efficacious alternative remedy bars the revisional application under Article 227.
- An order under Section 7 can only be passed at the time of eviction, and before an occupier is declared unauthorized, no adjudication can arise.
- The application by the petitioner before the Estate Officer was not maintainable.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Brahma Das Chowdhury v. Rishikesh Prasad, AIR 1997 SC 85 | Third party can maintain application under Order 21 Rule 97 before actual dispossession for adjudication of independent right. | The Court analogized this principle to support the interpretation that a lawful occupier can approach the Estate Officer before eviction for adjudication of arrears under Section 7 of the Act. |
Court's Reasoning and Analysis
The Court examined the language of Section 7 of the Public Premises Act, noting that Sub-section (1) empowers the Estate Officer to require payment of arrears of rent by any person, which includes lawful occupiers. Sub-section (2) deals with unauthorized occupation and assessment of damages. The Court rejected the opposite party's contention that no proceedings under Section 7 can be entertained at the instance of an occupier before eviction, holding that the provision is intended to prevent unlawful branding of an occupier as a defaulter without adjudication. The Court interpreted Sub-section (3) as requiring notice and hearing before passing orders but not as a bar on applications by occupiers. It further observed that the Act excludes jurisdiction of Civil Courts and Rent Controllers, leaving the Estate Officer as the sole authority for such disputes. The Court also considered the appealability of the order and held that the impugned order refusing to exercise jurisdiction under Section 7 is not appealable under Section 9, as no substantive order on arrears was passed. Reliance on the Supreme Court precedent regarding third party rights under Order 21 of the Code of Civil Procedure reinforced the interpretation that a lawful occupier should be able to approach the Estate Officer pre-eviction. Consequently, the Court found the Estate Officer's order erroneous for refusing to entertain the application and directed that the Estate Officer adjudicate the matter on merits.
Holding and Implications
The revisional application is allowed.
The Court set aside the Estate Officer's order rejecting the application under Section 7 of the Public Premises Act and directed the Estate Officer to adjudicate the petitioner's application for assessment and payment of rent arrears. This decision affirms that lawful occupiers have a right to seek adjudication of rent arrears before eviction proceedings and that the Estate Officer has jurisdiction to entertain such applications. The Court clarified that refusal to exercise this jurisdiction is not appealable, thus ensuring that occupiers have a direct remedy under the Act. No broader precedent beyond the direct effect on the parties was established. There was no order as to costs.
1. This revisional application is at the instance of an occupier governed under the provision of Public Premises (Eviction of Unauthorised Occupation) Act, 1971 (“Act”) and is directed against order dated August 17, 1988 passed by the Estate Officer in Misc. Case No. EO/24/1197/Misc. 4, C.R Avenue, Calcutta-700073, thereby holding that an application at the instance of an occupier for assessment of any arrear of rent and for giving direction for payment of such rent under Section 7 of the Act was not maintainable.
2. There is no dispute that the petitioner was induced in the disputed property by the opposite parry. Life Insurance Corporation of India, and the occupation of the present petitioner is governed by the provision of the Act.
3. The case of the petitioner is that the opposite party duly accepted rent till March 1997 at the rate of Rs. 650/- a month but when the petitioner in the month of May, 1997 sent the rent for April, 1997 at the rate of Rs. 875/- per month in terms of the earlier agreement between the parties dated June 6, 1992, the opposite party refused to accept the same. Thereafter the petitioner, contacted the concerned official of the opposite party for acceptance of rent but he did not accept such rent, as a result, the petitioner started sending rent to the opposite party by cheque every month but the opposite party refused the same with the intimation that it was not in a position to accept rent through cheques. Under the aforesaid circumstances, the petitioner came up with an application under Section 7(1) of the Act before the Estate Officer for adjudicating the amount of arrears and for a direction for payment of such arrears to the petitioner.
4. The opposite party contested the said application by filing written objection thereby opposing the prayer of the petitioner. The objection of the opposite party was that the Estate Officer had no jurisdiction to entertain any application for direction upon the owner to accept rent. The other allegations in the application were also disputed.
5. The Estate Officer by the order impugned has rejected the application on the sole ground that he was appointed only for passing eviction order after holding necessary enquiry and to perform other incidental act arising out of the eviction order in connection with the tenancy; but no direction can be passed for payment of rent either at the instance of the Estate Officer or of the occupier.
6. Being dissatisfied, the occupier has come up in this application under Article 227 of the Constitution of India.
7. Mr. Dasgupta, the learned senior counsel appearing in support of this application has placed strong reliance upon Section 7(1) of the Act and has contended that the language used in the said Section is wide enough authorising the Estate Officer to entertain an application for adjudication of arrears at the instance of a lawful occupier. Mr. Dasgupta further contends that the Act itself is a self contained Act and there is no scope of even going before a Civil Court for adjudication of the dispute as regards arrears of rent. Under such circumstances, Mr. Dasgupta contends, the Estate Officer refused to exercise jurisdiction vested in him by law by not going into the merit of the application.
8. Mr. Das, the learned counsel appearing on behalf of the opposite party has on the other hand supported the order passed by the Estate Officer and has made twofold submissions in opposing this application.
9. The first contention of Mr. Das is that an order under Section 7 of the Act is an appealable one under Section 9 and as such in view of existence of an efficacious alternative remedy by way of an appeal, this Court should not entertain this application under Article 227 of the Constitution of India.
10. The other submission of Mr. Das is that an order under Section 7 of the Act can be passed only at the time of eviction of the occupier and before an occupier is declared as unauthorised occupier, no question of making any adjudication arises. At any rate, Mr. Das contends, the application at the instance of the petitioner before the Estate Officer was not maintainable.
11. As indicated earlier, the occupation of the present petitioner is undisputedly governed under the provision of the Act. In the application filed before the Estate Officer the petitioner has complained that although he had sent rent as per agreement, the opposite party was not accepting such rent and as such the Estate Officer should make necessary direction so that for no fault on the part of the petitioner he may not be afterwords called a defaulter.
12. As rightly pointed out by Mr. Dasgupta appearing on behalf of the petitioner, Section 15(d) of the Act excludes jurisdiction of other Court to entertain any suit or proceeding in respect of arrears of rent payable under Section 7(1) of the Act. Therefore, the petitioner cannot approach the Civil Court for deciding such a dispute. It is needless to mention here that the doors of Rent Controller under Section 21 of the West Bengal Premises Tenancy Act are also closed for the petitioner. In order to appreciate whether Section 7 authorises the Estate Officer to entertain an application at the instance of a lawful occupier, the said provision is quoted below:—
“Section 7. Power to require payment of rent or damages in respect of public premises.—
1) Where any person is in arrears of rent payable in respect of any public premises, the estate officer may, by order, require that person to pay the same within such time as in such instalments as may be specified in the order.
2) Where any person is, or has at any time been, in unauthorised occupation of any public premises, the estate officer may, having regard to such principles of assessment of damages as may be prescribed, assess the damages on account of the use and occupation of such premises and may, by order, require that person to pay the damages within such time and in such instalments as may be specified in the order.
2A) While making an order under sub-section (1) or sub-section (2), the estate officer may direct that the arrears of rent or, as the case may be, damages shall be payable together with simple interest at such rate as may be prescribed, not being a rate exceeding the current rate of interest within the meaning of the Interest Act, 1978.
3) No order under sub-section (1) or sub-section (2) shall be made against any person until after the issue of a notice in writing to the person calling up to him to show cause within such time as may be specified in the notice, why such order should not be made, and until his objections, if any, and any evidence he may produce in support of the same, have been considered by the estate officer.”
13. A plain reading of the aforesaid section makes it clear that sub-section (1) deals with the dispute in case when any lawful occupier is in arrears. Sub-section (2) speaks of a case where somebody is in unauthorised occupation of a public premises and the said sub-section authorises the Estate Officer to assess the damages on account of such use and occupation. Sub-section (2A) gives power to the estate officer to pass a direction for payment of interest in addition to arrears of rent or damages as the case may be. Sub-section (3) however recognises the well settled principle that no order under sub-section (1) or sub-section (2) shall be made against any person until a notice has been given to such person and until his objections, if any, have been considered by the estate officer.
14. Mr. Das wanted to submit that sub-Section (3) indicates that notice is to be given to the occupier of the property before passing any order and as such it necessarily follows that at the instance of occupier, either lawful or unlawful, no proceeding under Section 7 of the Act can be entertained.
15. I am unable to accept such contention. Sub-section (3), although not happily drafted, manifests the intention of the legislature that the person affected by any order under sub-section (1) or sub-section (2) must be given an opportunity of being heard before such order is passed. Where a lawful occupier came forward with an application alleging that the owner was not accepting rent in spite of tender of the actual amount, it is the duty of the Estate Officer to entertain such allegation; for an occupier governed under provision of the Act has no other alternative remedy. In such a case, before passing any order determining the actual amount of arrears, the estate officer should also give notice to the owner. Therefore, the “person” mentioned in sub-section (3) refers not only to the “lawful occupier” or “unauthorised occupier” but may also to the owner in a given case. The use of the ‘may’ in sub-section (2A) indicates that direction for payment of interest is not mandatory and if due to wilful refusal on the part of owner but not for the fault of the occupier, an occupier is in arrears, the estate officer may not grant such interest.
16. Therefore, in my view, on consideration of the entire provision of the Act it must be held that sub-section (1) of Section 7 can be invoked by a lawful occupier before he is declared “an unauthorised occupant” for alleged non-payment of rent.
17. I have already indicated that the language or Section 7 is not free from doubt and there is some ambiguity as to the power of the estate officer to entertain an application at the instance of a lawful occupier.
18. In this connection I may refer to the provisions contained in Order 21 Rules 97, 98 and 99 of the Code of Civil Procedure. Although Rule 97 on a plain reading does not indicate that a third party before dispossession can complain to the executing Court asserting his independent right but nevertheless the position has been settled by the Apex Court in the case of Brahma Das Chowdhury v. Rishikesh Prasad reported in AIR 1997 SC 85 that at the instance of a third party an application under Order 21 Rule 97 is maintainable before actual dispossession and in such a case, a third party can come forward with the application for adjudication of his independent right in accordance with Rule 101 of Order 21 of the Code.
19. In my view, Section 7 of the Act should be so interpreted enabling a lawful occupier to come up before Estate Officer before he is illegally branded as a defaulter and a notice of eviction is served upon him, for the intention of the Act is that the dispute referred to in Section 7 should not be decided in any other suit or proceeding.
20. Regarding other contention of Mr. Das that the order impugned is an appealable one. I do not find any substance in it. Under Section 9, an appeal lies against an order passed under Section 7. In this case no order under Section 7 has been passed directing the occupier to pay any amount or adjudicating whether the occupier is in arrears. By the order impugned herein, the estate officer refused to exercise his power under Section 7. Such an order is not at all appealable under Section 9 of the Act. Moreover, even if it is assumed for the sake of argument that order impugned herein was an appealable one, existence of an alternative remedy is not always a bar in entertaining an application under Article 227 of the Constitution of India, particularly if the authority concerned refuses to exercise his power on an erroneous plea. I thus find no merit in the second contention of Mr. Das.
21. I therefore set aside the order impugned and direct the estate officer to adjudicate the question raised by the petitioner in his application under Section 7 of the Act and to pass necessary order on such application.
22. The revisional application is thus allowed.
23. In the facts and circumstances there will be however no order as to costs.
Petition allowed.
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