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High Court Of Calcutta Elaborates The Constituents Of The Term ‘Rent’

By - Ajay Lulla on January 9, 2023

The Hon’ble Calcutta High Court in the case of T.E. Thomson & Company Limited v. Rajshri Productions Private Limited[1] vide its order dated December 13, 2022, has clarified the stance on the constituents of ‘rent’ in lease agreements in order to satisfy the quandary as to whether the relationship between the parties originating from a particular lease agreement would be governed under the West Bengal Premises Tenancy Act, 1997 or the Transfer of Property Act, 1882.  

 T.E. Thomson & Company Limited (“the Petitioner”) had let out on rent a premise in favour of Rajshri Productions Private Limited (“the Respondent”). It was stated by the Petitioner that the Respondent had last paid the rent of INR 10,080 in November 2017 and had failed to pay the rent in subsequent months. Consequent to the same, the Petitioner had sent a notice to the Respondent on 13.02.2018 under Section 106 read with Section 111 (h) of the Transfer of Property Act, 1882. The Respondent contended that out of the sum of INR 10,080 paid by them to the Petitioner, only INR 7,200 was as rent whereas INR 1,440 had been paid as a share of property tax and the INR 1,440 had been paid as a commercial surcharge, therefore, the Transfer of Property Act, 1882 would not be applicable. It is pertinent to note that as per Section 3 (f) of the West Bengal Premises Tenancy Act, 1997, any premises let out on rent for non-commercial purposes for more than INR 10,000 per month will be exempted from the application of the aforementioned Act and therefore the Transfer of Property Act, 1882 would apply in such matters.  

It was observed by the Court that despite the lease deed being unregistered, the rent receipts produced by both parties sufficed as evidence for the lease deed being valid and enforceable. The Court while relying on the cases of Karnani Properties Limited v. Augustin[2] and Abdul Kader v. G.D. Govindraj[3] stated that the term ‘Rent’ is ought to be interpreted in a wide manner. It is comprehensive enough to include all the agreed payments advanced from the tenant to the landlord. Further, it will also include the payments advanced towards the enjoyment of furnishing and electrical appliances. The Court thus concluded that Rent would include the entire consideration from the tenant to the landlord for free and encumbrance-free enjoyment of the suit premises. 

Upon further scrutiny of the rent receipts produced, it was observed by the Court that the payment of rent was made by the Respondent as one single cheque and no bifurcations were made in the form of rent, commercial surcharges and municipal taxes as had been later made as part of the pleadings. The Court held that the payments made are connected and related to one another and crucial for the enjoyment of the premises by the Respondent. Upon application of the aforementioned concepts, the Court concluded that the entire amount paid by the Respondent in favour of the Petitioner would be considered rent.  

The Single Judge bench of Justice Ravi Krishan Kapur thus held that the relationship established between the Petitioner and the Respondent upon execution of the rent agreement will be governed by the Transfer of Property Act, 1882 as owing to having a monthly rent of more than INR 10,000, the present relationship is exempted from the application of the West Bengal Premises Tenancy Act, 1997. The Court thus ordered that the notice along with the subsequent proceedings initiated under the Transfer of Property Act, 1882 are maintainable and valid.


[1] Civil Suit 257/2018; December 13, 2022 

[2] AIR 1957 SC 309

[3] AIR 2002 SC 2442


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