LAGAN JUTE MACHINERIES COMP ANY LIMITED versus CANDLEWOOD HOLDINGS LTD. AND ORS.

Citation: [2007] 10 S.C.R. 480 · Decided: 28-09-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed

Judgment (excerpt)

A 
B 
LAGAN JUTE MACHINERIES COMP ANY LIMITED 
v. 
CANDLEWOOD HOLDINGS LTD. AND ORS. 
•. 
SEPTEMBER 28, 2007 
[DR. ARIJIT PASAYAT AND LOKESHW AR SINGH P ANTA, JJ.) 
Suit-Eviction suit-Consent decree between Judgment-debtor 
agreeing to pay commercial surcharge on consolidated rates or a rate 
C specified by Municipal Corporation-Judgment-debtor also making 
payments accordingly-Claim of commercial surcharge for earlier 
period by decree-holder-Execution application claiming eviction and 
arrears of commercial surcharge-Plea of judgment debtor that 
liability to pay the surcharge does not arise-Single Judge of High 
D Court directing realization of the charge by selling the assets of the 
Judgment-debtor-Division Bench of High Court upholding the order 
in view of the consent decree and conduct of the judgment-debtor-
On appeal, held: Order of High Court was correct as the same was 
passed in view of relevant facts and law-Calcutta Municipal 
E CorporationAct, 1980-s. 171(4). 
After expiry oflease in respect of the property in question lessor 
(predecessor-company of Respondent No.1 company) filed an eviction 
suit against the lessee-appellant. Consent decree was passed in the suit 
F decree. The same was also modified after change of succeeding owners 
of the premises. Appellant-lessee, in the decree had given an 
undertaking that itwould pay the commercial surcharge on consolidated 
rate on the Corporation tax or at the rate as would be determined by 
the Municipal Corporation. On demand of commercial surcharge by the 
G lessor company lessee paid the same since 1997. Lessor then claimed 
the arrears of Surcharge since July, 1976. Thereafter execution petition 
was filed by the lessor (decree holder) for vacation of the premises and 
for payment of arrears of surcharge. Single Jude held that the lessee 
was not liable to pay the commercial surcharge from 1997 which he had 
H 
480 
.. 
) 
LAGAN JUTE MACHINERIES COMPANY LIMITED 
481 
v. CANDLEWOOD HOLDINGS LTD. 
already paid and such surcharge could not be levied prior to A 
commencement of Section 171(4) of Calcutta Municipal Corporation 
Act, 1980 i.e. 1.4.1984. It directed payment of arrear occurring from 
1.4.1984 till June, 1997. The Special Leave Petition against the order 
was withdrawn. Thereafter second execution petition was filed, during 
pendency thereof, application u/s 47 CPC was filed questioning the date B 
of imposition of surcharge as well as contending that payment of 
r 
surcharge actually arose only after determination of annual valuation 
.. 
and fixation of rates by Municipal Authorities. Single Judge of High 
Court disposed of the execution application of Receiver for realization 
of commercial surcharge and consolidated rates of taxes. In appeal to c 
Division Bench of High Court, it was contended that as per law 
prevalent, rate bill has not been presented to the occupier; and that it 
was not liable to pay as the Act envisaged one consolidated rate bill 
payable by the owner which was recoverable from the occupier. Division 
Bench of High Court in view of the consent decree and the fact that the D 
appellant had all along been making payment, declined contentions of 
appellant, and upheld the order of Single Judge. Hence the present 
appeals. 
Dismissing the appeals, the Court 
E 
HELD: The High Court has referred to all the relevant factors 
and has kept in view the correct position in law. Division Bench did not 
__....... 
accept the stand of the appellant that under law prevalent at the relevant 
time, the rate bill should have been presented to the occupier for 
payment and since there was no such presentation, the question of non-
F 
payment does not arise. It also did not accept the stand that after the 
Corporation Act came into operation, there was one consolidated rate 
bill and amount was not determined and the primary obligation "Owner 
to pay and thereafter recover from appellant", and as such the appellant 
is not liable. It was noted that it all along made payment in terms of the G 
terms of the settlement before the High Court on the basis of which the 
consent decree was passed. There was no dispute with regard to the 
amount raised at any point of time. In the earlier round also, the Division 
Bench noted this stand which was indicated in the memorandum of 
H 
r
482 
SUPREME COURT REPORTS 
[2007] 10 S.C.R. 
A appeal and SLP before this Court was withdrawn. In the earlier SLP 
the stand was that the dispute related to post-1

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