Eviction Dispute Over Public Premises: Bengal Chemicals vs. Ajit Nain

The case of Bengal Chemicals and Pharmaceuticals Ltd. vs. Ajit Nain revolved around an eviction dispute concerning public premises occupied by the respondent, Ajit Nain, for running a Montessori school. The Supreme Court had to determine whether the eviction proceedings initiated under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971, were properly conducted and if the High Court’s decision to remit the matter to the Estate Officer was justified.

Bengal Chemicals, a government-owned enterprise, owned the premises in question, a three-storied building with an open space located at No.168, Maniktala Main Road, Kolkata. The property was leased to Ajit Nain for a period of 21 years, which expired in 2014. Following the expiry, disputes arose over renewal terms and rent payments, leading to eviction proceedings initiated by the Estate Officer.

Arguments of the Petitioner

Bengal Chemicals, represented by their legal counsel, contended:

“Respondent No.1 is running a school on the premises since June 1, 2014, without paying rent, amounting to approximately Rs.4.61 crores in arrears, as assessed by the Estate Officer.”

The petitioners further argued:

• Ajit Nain had not paid rent after the lease expired in 2014, apart from Rs.25 lakh deposited per a High Court order.
• The Estate Officer lawfully assessed the damages and passed an eviction order under Section 5(1) and Sections 7(2) & 7(2A) of the Public Premises Act.
• The High Court erred in setting aside the Estate Officer’s order and remitting the matter without valid reasons.

Arguments of the Respondent

Ajit Nain, contesting the eviction order, argued:

“The High Court correctly remitted the matter back to the Estate Officer, as the eviction proceedings were tainted by bias and lack of due process.”

The respondent further contended:

• The rent demanded—Rs.50 per sq. ft., increasing by 10% every two years—was excessive and unilaterally imposed.
• A meeting held before lease expiry in 2014 discussed renewal, but no fair agreement was reached.
• The Estate Officer did not provide adequate opportunity to present a defense, making the eviction order arbitrary.

Supreme Court’s Verdict

The Supreme Court, with Justices R. Banumathi and A.S. Bopanna presiding, upheld the High Court’s decision to remit the matter to the Estate Officer but imposed conditions on the respondent. The Court observed:

“Since June 2014, respondent No.1 has not paid rent except for Rs.25 lakh. He must now pay interim damages for use and occupation before the Estate Officer reconsiders the case.”

The Court ruled:

• Ajit Nain must pay Rs.2,50,000 per month as damages from June 2014 to May 2018 and Rs.3,00,000 per month thereafter.
• Outstanding arrears must be paid in three installments, with failure resulting in automatic eviction.
• The Estate Officer must reassess the damages and issue a fresh decision based on evidence from both parties.
• Bengal Chemicals can withdraw the Rs.25 lakh deposit and electricity charges paid by the respondent.

Key Takeaways from the Judgment

• Public premises lessees cannot continue occupation without rent post-lease expiry.
• Eviction orders must be passed after ensuring due process and fair opportunity to the occupant.
• Court-ordered interim payments can ensure justice while eviction proceedings continue.
• Failure to comply with court-ordered payments can lead to forfeiture of defense rights in eviction cases.

This judgment balances property rights of public enterprises with fair treatment of lessees, ensuring that legal procedures are followed in eviction matters.

Petitioner Name: Bengal Chemicals and Pharmaceuticals Ltd. & Ors..
Respondent Name: Ajit Nain & Anr..
Judgment By: Justice R. Banumathi, Justice A.S. Bopanna.
Place Of Incident: Kolkata, West Bengal.
Judgment Date: 09-07-2019.

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