Afr High Court
Case Details
1 2025:CGHC:34753 AFR HIGH COURT OF CHHATTISGARH AT BILASPUR FA No. 185 of 2016 Judgment reserved on 08.05.2025 Judgment delivered on 22.07.2025. Rahul Bajpai S/o Late Shri Pandit Rohini Kumar Bajpai, Aged About 57 Years Proprietor Of M/s R.K. Udyog Tifra Industrial Area, Bilaspur, Residing Near District Jail, Tehsil And District Bilaspur, Chhattisgarh ................Plaintiff, Chhattisgarh ---------Appellant/ Plaintiff versus Chhattisgarh State Industrial Development Corporation Ltd. Through Its Managing Director, 1st Floor, Udyog Bhawan, Ring Road No.1, Telibandha, Raipur, 492006 Chhattisgarh --------Respondent/ Defendant For Appellant : Mr. Abhyuday Singh, Advocate For Respondent(s) : Mr. Ayaz Naved, Advocate Hon’ble Justice Shri Narendra Kumar Vyas C A V Judgment 1. This first appeal under Section 96 CPC has been filed by appellant/ plaintiff assailing the judgment and decree dated 30.04.2016 passed by learned 5 th Additional District Judge, Bilaspur in Civil Suit No. 24-A of 2013, by which
Facts
the trial Court has dismissed the suit filed by the plaintiff for declaration that no provision of lease deed has been violated, therefore, the defendant has no right to dispossess the plaintiff from the suit property. 2 2. For the sake of convenience, the parties shall be referred to in terms of Civil Suit No. 24-A/2013. 3. Brief averments as pleaded in the plaint are as under:- (a) That the appellant is the proprietor of M/s. R.K. Udyog, the said company was involved in production of Aluminum Notch Bars and supply the same to small scale steel plants. A lease deed was executed between M/s. R.K. Udyog and defendant for admeasuring 3600 Sq. feet land situated at Tifra Industrial Estate, District Bilaspur, The said land is hereinafter referred to as “suit land”. (b) It is contended that the lease deed was executed between the appellant and the defendant twice. First lease deed was executed between the appellant and the defendant from 06.11.1982 to 05.11.2012 for 30 years. Second lease deed was executed between them from 16.02.1989 to 15.02.2088 for 99 years. Thereafter, on 13.08.1991 a conveyance sale deed was executed between the plaintiff and defendant No. 1 wherein the appellant purchased the shed on the suit land measuring 1800 Sq. feet from respondent for sum of Rs. 23,927/-. (c) It is also contended that M/s. R.K. Udyog used to produce aluminum notch bars and supply the same to small steel plants for cleaning melt iron and due to recession, appellant suffered huge loss in the business and he had to face difficulty for recovery of its own money, therefore, he decided to wind up the said industry by reducing production, as such he had to close the plaint completely in the year 2004 and thereafter, he tried to establish new unit for manufacturing plastic scrap on the suit land, therefore, he 3 started collecting more raw material for manufacturing plastic scrap in the said shed, so that he may not face shortage of raw material in future. 4. It is also contended that before the plaint could be established on 01.03.2006 the defendant ordered for cancellation of lease deed dated 06.11.1982 and order dated 16.02.1989 on the ground for violation of certain provisions mentioned in the lease deed. The defendant conducted investigation in the said premises and alleged panchnama was prepared by them in absence of appellant without following due process of law. Being aggrieved by the order dated 01.03.2006 of cancellation of lease deed, the appellant preferred an appeal before Chairman, CSIDC, Raipur. However, the appeal filed by the appellant has been dismissed by the Appellate Authority without opportunity of hearing given to him vide order dated 29.11.2006 and directed the appellant to handover the land to the defendant No. 1 by 10.10.2007. 5. The defendant has filed his written statement denying the allegation made in the plaint mainly contending that after production was stopped thereafter, the plaintiff gave the said unit on rent violating clause-12 of the agreement. It has contended that the other condition of the lease deed was also violated by the plaintiff and he has tried to close old industry and set up new industry, therefore, the plaintiff was required to obtain permission from defendant No. 1 before closing old industry and setting up new industry but he did not take permission which is violative clause No. 9 of the "Lease Deed, as such cancellation of lease deed by defendant is in accordance with the law and terms of lease deed. It is also contended that an opportunity was given to him to correct his mistake but he did not appear, 4 therefore, cancellation order was issued against him. It is also contended that notice was given to him thrice for appearance before Chairman, but he remained absent in every hearing, as such Chairman passed ex-parte order against him and would pray for dismissal of the suit. 6. On the pleadings of the parties, learned trial court has framed as many as two issues which are as under:- 1- क्या वादी ने दावा का उचि(cid:13)त मूल्यांकन कर न्याय-शुल्क अदा किकया है? 2. क्या वादी के वादभूकिम प्ሾा संबंधी अचिधकार यथावत् एवं अ्ቌुण्य है एवं ्ቚचितवादी ्ቛारा उसके हक एवं आचिधपत्य की संपቈኌ, पर बेदखल नहीं किकया जा सकता ? 3.वाद व्यय एवं सहायता ? 7. The plaintiff to substantiate his case has examined himself as (PW-2), Mohammad Usman Khan (PW-1) and exhibited documents namely lease deed (Ex.P-1), Form of conveyance deed (Ex.P-2), land cancellation order 01.03.2006 (Ex.P-3), Appeal filed by the appellant (Ex.P-4), letter dated 27.09.2006 (Ex.P-5), Registered notice letter under Section 80 CPC (Ex.P- 6), receipt (Ex.P-7), postal card (Ex.P-8), photographs (Ex.P-9 to Ex.P-15) and Appeal memo (Ex.P-16). 8. Defendant examined P.S. Patta as (DW-1) and exhibited note sheets (Ex.D-1). 9. Rahul Bajpai (PW-2) in his examination-in-chief by way of affidavit as provided under Order 18 Rule 4 CPC has reiterated the averments made in the plaint and in paragraph 15 of his cross-examination he has admitted that he has obtained land lease from manufacturing aluminum notch bars and has taken possession of the land from the defendant. He has also 5 admitted that as per the lease terms, prior permission in writing has to be obtained from the defendant for any other use of the lease land. The witness has also admitted in paragraph 17 of his cross-examination that only aluminum notch bar manufacturing activity was carried out for 15 years after obtaining lease and in paragraph 18 of the cross-examination, he has admitted that after 15 years of starting of his business, he has stopped business of aluminium notch bar as per terms of the lease and he has obtained prior permission to start new manufacturing business. 10. The plaintiff has admitted in paragraph 19 of his cross-examination that the conveyance deed (Ex.P.-2) was not for acquiring the entire land on lease, it was executed only in relation to the purchase of the shed. In paragraph 20 of his cross-examination, he has also admitted that the conditions of the lease deed were applicable for the land acquired on lease and if any business is carried out other than notch bar without the permission, then there is provision for 10 % penalty in the premium on the request of lessee. 11. P.S. Patta (DW-1) was examined before the Court, this witness has denied all the suggestions made to him and supported the stand taken by him in the written statement. 12. Learned trial Court after appreciating the oral and documentary evidence found that the plaintiff has not proved his case and has dismissed the suit. Being aggrieved by the judgment and decree passed by the trial court on 30.04.2016, the plaintiff has preferred First Appeal under Section 96 CPC before this Court. 13.
Legal Reasoning
22. Further, Section 111(g) itself requires that for forfeiture, lessee should commit breach of 'an express condition' which provides that on breach thereof, the lessor may re-enter. The words 'express condition' itself stipulates that condition must be clear, manifest, explicit, unambiguous and there is no question of drawing any inference. In our view, as there is no express condition restraining partial alienation of the leasehold property, it would not be open to the transferee of the lessor's right to invoke the forfeiture clause for 12 determining the perpetual lease and such conditions cannot be inferred by implication. 23. On similar clause, it appears that there is uniformity of interpretation by various High Courts that unless there is an express condition restraining partial alienation, forfeiture clause would not apply. 24. In A Venkataramana Bhatta vs. Krishna Bhatta 1902 (1) Ch 727, the Court held thus:- "A clause for forfeiture must always be construed strictly as against the person who is trying to take advantage of it, and effect should be given to it, only so far as it is rendered absolutely necessary to do so by the wording of the clause. A covenant against assignment does not prevent the tenant from assigning for any part of the term or from assigning a portion of the premises and unless the covenant is expressly worded to exclude a partial alienation of the premises, a partial alienation will not work forfeiture under a clause which prevents alienation of the premises. It is always open to the landlord to put into his lease a covenant against alienation either complete or partial, if he intends that forfeiture should result from partial alienation as well, but where he does not do so, the covenant will not apply to a partial alienation. Grove v. Portel (1902) 1 Ch. Dn. 727." 25. In David Cutinha vs. Salvadora Minazes and Others [AIR 1926 Madras 1202}, the Court observed thus:- ".There is ample authority in the English Law and in fact in the law here too to show that unless there is a restriction against the assignment of any portion of the demised property, the restraint on the alienation of the demised premises will not prevent the alienation of a portion. I am not impressed with the reasoning of the learned District Judge as to the grant of a mulgeni lease not being an alienation. It clearly is an alienation. But I think that the respondents must succeed on the ground that the restriction on alienation of a portion of the demised premises is not contained in the words of the lease which I have set out above. It is perhaps not necessary to multiply examples, but there are some cases which have been cited and which lend support to the contention for the respondent, for instance in Grove v. Portal [(1902) 1 Ch. D. 727], Joyee, J., quotes the passage already cited from Church v.Brown [(1808) 15 Ves. 258] and says that the dictum of the lower Court has never been disapproved of; and again in Russell v. Beecham [(1924) 1 K.B.525] Serutton, L.J. says quoting Lord Eldon again that a covenant not to part with possession of premises would not restrain the tenant from parting with a part of the premises, these covenants having been always construed by Courts of 13 law with the utmost jealousy to prevent the restraint from going beyond the express stipulation. In Chatterton v. Terrel [(1923) A.C. 578] Lord Wrenbury says: It is said and said with truth, that if there be a covenant not to assign or underlet the premises, it is not a breach to assign or sub-let part of the premises. It was not so stipulated, if those be the words, for the words or any part thereof are not found in the covenant." 26. The above judgments are followed in P. Veda Bhat vs. Mahalaxmi Amma [AIR (34) 1947 Madras 441]. Same view is also taken in Keshab Chandra Sarkar and Others vs. Gopal Chandra Chanda [AIR 1937 Cal 636] and in Indraloke Studio Ltd. Vs. Smt. Santi Debi and Others [AIR 1960 Cal 609]. 23. From the above stated evidence, material on record, it is quite vivid, that any violation of terms of lease entitled the lessor to cancel the lease, therefore, the plaintiff should prove that he has not violated any condition of lease which he miserably failed to prove the same, despite having burden to prove lies upon him. Learned trial Court after taking note of the fact has recorded its finding that the lease deed has been cancelled on account of violation of condition and in the appeal also he was given opportunity of hearing which has not been utilized by him, this finding is neither perverse nor suffers from perversity or illegality which warrant interference by this Court. Accordingly, the appeal being devoid of merit is liable to be dismissed and it is hereby dismissed. 24. Interim order passed on 07.06.2016 stands vacated. Decree be drawn up accordingly. Sd/- (Narendra Kumar Vyas) Judge Santosh SANTOSH KUMAR SHARMA Digitally signed by SANTOSH KUMAR SHARMA Date: 2025.07.22 13:33:19 +0530
Arguments
Learned counsel for the appellants/plaintiff would submit that the finding recorded by the trial Court suffers from illegality and perversity, therefore, 6 the same is liable to be set aside by this Court. He would further submit that learned trial Court has failed to consider evidence of Usman Khan, Manager of plaintiff company and P.S. Patta, Officer in-charge of the case which negates the reasons clearly demonstrates that the trial Court has not appreciated the material evidence on record. He would further submit that no evidence whatsoever was adduced in favour of the preposterous reason that the shed was let on rent as the respondent has utterly failed to provide any details for their claim, including even the name of the tenant or the date from which the property was rented has been placed on record. He would further submit that P.S. Patta, officer in-charge, has accepted the lack of any details or documents supporting the allegation has been filed. Such mere accusations without any corroboration clearly demonstrates the mala-fides of respondent authority to strip the appellant of his legitimate right over the land by framing false reasons for cancellation of the lease. Furthermore, the shed being a property bought by the appellant, cannot be taken away from him by the respondent without following due process of law. He would further submit that learned trial court has furthermore ignored the absence of any material corroborating the allegations made against the appellant. The appellant has never received any notice for correction of his mistake nor was he promptly notified about the dates of hearing before the Chairman, CSIDC. He would further submit that application under Order 13 Rule 10 and Order 11 Rule 12 of the Code of Civil Procedure, 1908 was preferred by the appellant which was subsequently allowed by the learned trial court. The officer in-charge merely furnished an affidavit stating that he has no other documents 7 relating to the land or the proceedings thereof leading to the cancellation of the lease deed except the note-sheet of proceedings before the Chairman, CSIDC. Thus, the affidavit establishes the fact that there indeed exists no evidence or documents to support the claims and reasons given by the respondents for cancelling the lease deed of the appellant. 14. Learned counsel for the appellant would submit that learned trial court has failed to appreciate the fact that the proceedings before the Chairman, CSIDC was concluded ex-parte as the appellant was never informed of the date of hearing, neither the next date was fixed on every hearing. The respondent authority has accepted that they have no evidence with regard to the fact that any notice was sent or received by the appellant requiring his attendance before the Appellant authority. This fact has even been established and accepted before the learned trial court, yet the trial court proceeded to conclude the proceeding mere lack of notice and thus not being given an opportunity of hearing cannot be a reason for allowing the Civil Suit which an utter violation of natural justice on part of the learned trial court to recognize the right to be heard of the appellant before an adverse order is passed against him Hence, the order dated 30.04.2016 passed in violation of the principles of natural deserves to be set aside. 15. On the other hand, learned counsel for the respondent would submit that the finding recorded by the trial Court is legal, just and proper which does not call for interference by this Court. He would further submit that on appreciation of the entire evidence on record and recorded its finding thereafter only by well reasoned judgment has rightly dismissed the suit 8 which is not liable to be interfered by this court and would pray for dismissal of the appeal. 16. I have heard learned counsel for the parties and perused the record of the Court below with utmost satisfaction. 17. From the above submission made by the parties, the point emerged for determination by this Court is as under:- (I) Whether the plaintiff violated any express condition of lease which provides that, on breach thereof, the lease executed in his favour is liable to be cancelled?. 18. To appreciate this point, it is expedient for this court to examine the provisions of Section 111 of Transfer of Property Act, 1882 which reads as under:- Section 111. Determination of lease.—A lease of immoveable property determines— (a) by efflux of the time limited thereby: (b) where such time is limited conditionally on the happening of some event—by the happening of such event: (c) where the interest of the lessor in the property terminates on, or his power to dispose of the same extends only to, the happening of any event—by the happening of such event: (d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right: (e) by express surrender; that is to say, in case the lessee yields up his interest under the lease to the lessor, by mutual agreement between them: (f) by implied surrender: (g) by forfeiture; that is to say,(1) in case the lessee breaks an express condition which provides that, on breach 9 thereof, the lessor may re-enter [*****]or. (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; 2[or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such The words “or the lease shall become void” omitted by Act 20 of 1929, s. 57. Ins. by s. 57, event]; and in 1[any of these cases] the lessor or his transferee 2[gives notice in writing to the lessee of] his intention to determine the lease: (h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other. 19. Clause No. 7,9, 12 and 23 of lease agreement are as under:- 7 (a) THE lessee hereby agrees that he shall within a period of one year, being the Small Scale Industry, from the date of taking over possession of the land, shall commerce commercial production. 7(b) THE lessee hereby agrees that he shall utilise the complete land leased out to him hereunder for implementa tion of project or for its expansion within a period of 3 years, as it is a SSI Industry for the above said purpose, from the date of taking over possession of the land. 7(c) THE lessee further agrees that if he is unable to utilise the complete land leased out to him within the period prescribed under clause 7(b) the lessee will surrender the surplus land to the lessor or the lessor mas the right of re-entry into that portion. (The lessee grees to provide approach road for the surrendered land). The lessee also agrees that if he fails to surrender the surplus land he will pay fifteen times of the prevelent lease rend. 7(d) The lessee hereby agrees that t where the land is obtained for expansion also, he shall completely demarcate it and shall not start any work in such demarcated land till 1st phase of implementation of the project is completed. 9. THE lessee shall use the said land for the purpose of said business of manufacturing and for construction of office, administrative building, godown and shall not use the same or any other part thereof or permit it to be used for any other purpose without the previous permission in writing from the lessor. 12. THE lessee shall not sublet, assign or otherwise transfer the said land or any part thereof or any buil-ding structure or work constructed thereon for any pur-pose whatsoever, except as provided in rules 20 of the Madhya Pradesh Industries (Allotment of sheds, land and plots) 10 Rule 1974 (hereinafter referred to as said 'rules') without the previous sanction in writing of the lessor or any other officer authorised by him. 12(a) THE lessee agrees that in case where the industry is being run by him/they on the said land and the cons-titution of the firm/partnership/company has been changed without prior permission of the lessor in writing, the lessor may grant permission to his/their request by im-posing a penalty of 10% of the premium. 12(b) THE lessee agrees that in case where the lessee has neither taken any effective steps nor the industry is established or running within the period as mentioned in clause 7 and the constitution of the firm/partner-ship/company is changed without permission of the lessor, the lessor has right to cancel the allotment of land in such cases. 23. IF the rent, maintenance charges hereby reserved or any part thereof shall at any time be in arrears and unpaid for 6 calender months next after the date when the same shall have become due, whether the same shall have been lawfully, demanded or not or if the lessee becomes insolvent and or goes into liquidation, vola-ntarily or otherwise or if there be any attachment on the said premises or there is a breach or non observance by the lessee of any of the conditions and convenants therein contained and the lessee fails to remedy the breach within 60 days of the notice in writing given by the lessor or becomes insolvent or enters into an agre-ement with his creditors for composition of the industry, this lease will be deemed to have been terminated and the lessor may not withstanding the waiver or any pre- vious cause or right of re-entry and without prejudice to any right or remedy of the lessor for recovery of rent remaining due under the lease enter upon the said land and repossess the same as if this demise had not been made. 20. Rahul Bajpai (PW-2) in his cross-examination has admitted that as per the terms of the lease deed (Ex.P.-1) land was given for manufacturing of Aluminum notch bars and also admitted that as per the terms of lease, prior permission in writing has to be obtained from the defendant for any other use but he did not obtain any permission from the defendant. He has also admitted that he has done business of notch bar in the lease land for 15 years and thereafter the business was closed. He has also admitted that as per condition 12(a) of the terms of lease, he has not requested for imposition of 10% penalty to the defendant and also admitted that the defendant has given him notice for violation of terms of lease. He has also admitted that before change of land use permission from defendant is 11 required. He has stated that he has obtained it but he did not remember it today and also admitted that he has not produced any document regarding permission obtained by him before the Court. 21. The defendant witness has also categorically stated in his evidence that they have sent notice to plaintiff which is kept in the record and also denied that the plaintiff has not violated clause 9 and 12 of the terms of lease deed. He has also stated that if the plaintiff after closing manufacturing industry of aluminum notch bar and intends to start other manufacturing unit then he has to obtain permission. 22. From the evidence and material on record, it is quite vivid that the plaintiff has violated the terms of lease deed and Clause 23 provides that if there is violation of any terms and condition of lease then the lease can be cancelled and lessor can be re-entered in the lease land. Clause -23 of the lease specifically provide that any violation of condition will entitle the lessor to cancel the lease, the same has rightly been cancelled by defendant in exercise of provision of Section 111(g) of the Transfer of Property Act. The issue with regard to cancellation of lease in violation of terms of particular lease which empowered the lessor to cancel the lease has come up for consideration before Hon’ble Supreme Court in the case of Raghuram Rao and others vs. Eric P. Mathias and others reported in 2002(2)SCC 624 wherein the Hon’ble Supreme has held as under:-