Holding

The Supreme Court held that the parties must file a deed of compromise in the registry containing the specified terms, and that the compromise disposes of the appeal.

Summary

The Supreme Court heard a civil appeal (No. 2846 of 1979) arising from a 40‑year landlord‑tenant dispute between Soorajmull Nagarmull (tenant) and Dalhouise Properties Ltd. (landlord). While the appeal was pending, the parties reached a compromise covering rent, compensation for past occupation, tax liabilities, and other tenancy terms. The Court directed the parties to file a deed of compromise in the registry within six weeks, incorporating the detailed terms enumerated in the order. The compromise was to settle all outstanding disputes, with specific payment schedules, interest on defaults, and provisions regarding renovations and occupancy. The Court ordered the return of certain cheques and the withdrawal of a deposit made by the tenant, adjusting these amounts against the compensation payable. The appeal was consequently disposed of without any order as to costs.

Issues considered

Whether the Supreme Court can order the parties to file a deed of compromise to settle the landlord‑tenant dispute
Whether the terms of the compromise are binding and sufficient to dispose of the pending appeal
Whether arrears prior to 1‑January‑1979 are covered by the compromise

Subjects

landlord‑tenant disputecompromise deedrentcompensation for occupationcivil appealsettlementSupreme Court of India

Judgment

I

A SOORAJMULL NAGARMULL
v.
DALHOUSIE PROPERTIES LTD. AND ANR.

MARCH 30, 1994

B [K. RAMASWAMY AND N. VENKATACHALA, JJ.]

Tenancy Laws-Landlord tenant dispute-Compromise between par-
ties-Parties are directed to file a deed of compromise-Compromise deed to
compromise of tenns stated in order.
c
There was a long drawn litigation between landlord and tenant for
about 40 years. During the pendency of the proceedings before the
Supreme Court, the parties entered into a corapromise.

Disposing of the appeal, this Court
D
HELD : Parties shall file in the registry a deed of compromise,
duly signed by them. The compromise shall comprise of the terms as ,'
specified in the order. [226-G]

E CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2846 of
1979.

From the Judgment and Order dated 22.8.79 of the Calcutta High
Court in Appeal No. 151 of 1975.

F Shankar Kumar Ghosh, H.K. Puri, S.K. Puri and Rajeev Shroff for
the Appellant.

P.P. Rao, Vishwanath Poddar, P.R. Ramasesh and Rathin Das for
the Respondents.
G The following Order of the Court was delivered :

The litigation that has been carried on for over 40 years has now
ended in a compromise entered into by the parties. Counsel appearing for
the parties are directed to file in the Registry a deed of compromise, duly
H signed by parties within six weeks from today. That compromise shall
226
\
S. NAGARMULL v. DALHOUSIE PROPERTIES LTD. 227

comprise of the following terms : (1) That the appellant-tenant shall pay A
·~ for the suit premises monthly rent of rupees two lakhs (Rs. 2 lakhs),
commencing from January 1, 1994. The rents for the months of January
and February, 1994 shall be paid on or before July 31, 1994. The rent for
the month of March, 1994 shall be paid on or before 12th April, 1994. For
subsequent tenancy months. The tenant shall pay the monthly rent on or B
before 12th of every succeeding month.

(2) All taxes, Municipal or otherwise payable in respect of the snit
property shall be borne by the respondent-landlord.

(3) The tenant/appellant shall be liable to pay to the respon- C
dent/landlord as compensation for past use and occupation of the suit
premises, as hereunder.

(i) For the period between 1.1.1979 and
31.12.1983 @ Rs. 15,000
{Rupees Fifte~n Thousand) per month.
D

(ii) For the period between 1.1.1984 and
31.12.1988 @ Rs. 25,000
(Rupees Twenty Five Thousand) per month.
E
(iii) For the period between 1.1.1989 and
31.12.1993 @ Rs. 35,000
(Rupees Thirty Five Thousand) per month.

(4) The amounts payable as compensation for suit premises under F
Clause 3, less the amounts already paid towards rent and licence fee for
,; the suit premises shall be the outstanding amount of compensation still
payable by the tenant to the landlord.

(5) The Cheques/Drafts (numbering 136) handed over by the Appel-
lant/tenant to the respondent/landlord towards payment of arrears of rent G
and licence fee, agregating to Rs. 6,62,320 shall be returned to the Appel-
lant/tenant and within 60 days of such return the appellant/tenant shall pay
to the respondent/landlord the said amount of Rs. 6,62,320. This amount
of Rs. 6,62,320 shall be adjusted against the amounts referred to under
Clause 4 above as amounts already paid towards rent and licence fee H
228 SUPREME COURT REPORTS [1994] 3 S.C.R.

A towards suit premises and the balance amount remaining thereafter out of
the total amount of compensation payable, shall be paid by the appel- ~·

lant/tenant in two and one half (2V2) years in equal five half-yearly instal-
ments.

If there is any default committed in payment of balance amount of
B
col)lpensation in equal five half-yearly instalments, agreed to the tenant
shall pay interest on the amounts which may fall due @ 25% per annum
from the date on which such amounts may fall due till date of payment.

Pursuant to the direction issued by this Court, the appellant had
C deposited a sum of Rs. 1,50,000 with the Registry of this Court and the
same is standing to the credit of the Respondent in the appeal. The
Respondent is permitted to withdraw the same. The Registry is directed
to issue a Cheque or a Draf~ as the case may be, in favour of the
respondent for the said sum of Rs. 1,50,000. This amount also stand be
D adjusted against amount of compensation payable under Clause 3 above.

It is stated that from June 13, 1975 to November 15, 1979, a sum of
Rs. 5,40,000 was paid to Mis M.G. Poddar, the Solicitor of the respon-
dent/landlord by way of rent at the rate of Rs. 10,000 per month. It i.s stated
E by Shri Sibal, the learned counsel for the tenant/appellant that the amount ,.'
shall be given credit towards compensation payable. On the other hand, it
is stated by Mr. P.P. Rao, the counsel for the landlord/respondent that
whatever was the arrears rent prior to 1.1.1979 that would be adjusted
towards the such arrears and if there were to be any balance that would
be given credit towards the compensation payable from 1.1.1979. Since we
F have not taken into account the arrears of rents and licence fee payale for
the suit premises prior to 1.1.1979, it is open to the parties to sit across the
table and resolve the dispute as to what were the arrears prior to 1.1.1979
and from out of what outstanding balance amounts received by the landlord
towards rents and licence fee, credit should be given to the tenant. Such
G balance amount shall be given credit towards the compensation payable on
or from 1.1.1979. If there were to be any arrears outstanding prior to
1.1.1979, this settlement does not cover that period.

It is needless to mention that the concerned Bank with whom the
H cheques and Drafts were deposited and now lying, would renew and reissue
\
S. NAGARMULL v. DALHOUSIE PROPERTIES LTD. 229

the cheques and drafts after due revalidation. A
(6) It is agreed by the appellant that w.e.f. 1.4.1994 they shall not
exhibit any hoarding on the demised premises and they shall surrender the
licence which they had to the respondent/landlord.

(7) The appellant/tenant shall be entitled to carry out such renova- B
tions, repairs and non-structural alterations, including repairs or replace-
ments of lift or lifts or other mechanical equipments (like central
airconditioning) as may be necessary for the proper enjoyment of the suit
premises and the respondent/landloard shall have no objection for the
same. However, if any renovations, repairs or alterations are required to C
be carried out, it is open to the tenant/appellant to carry out the same
without adversely affecting the main structure of the building, under in-
timation to the respondent/landlord. The costs of such repairs, renovations
and alterations shall be borne by the appellant/tenant, and are not liable
to reimbursed by the Respondent-landlord. D

(8) That the respondent/landlord shall have no objection to the use
and occupation of the suit premises by the .appellant/tenant and existing
occupants already inducted by the appellant. No new occupant shall,
however, be inducted.
E
(9) That the respondent/landlord shall not do anything that may
cause hindrance or nuisance to the appellant/tenant in the proper use and
occupation of the suit property.

(10) In all other respects the existing terms of tenancy of the suit
premises shall continue to operate. F

(11) That the parties hereto argee that save and except what is
agreed to herein, there are no other arrears on account of rent or com-
penstation for use and occupation and/or !icence fee in respect of the suit
premises in question. G
(12) This compromise shall dispose of the above appeal in the above
·t~rms, with no orders as to costs.

(13) This compromise will cover all outstanding disputes and litiga-
tion pending between the parties hereto iri respect of properties/premises H
230 SUPREME COURT REPORTS [1994] 3 S.C.R.

A in question.

(14) This compromise has been arrived at in Court in the presence
of the State of West Bengal's counsel and he had no objection to the
compromise and its terms.

B The appeal is accordingly disposed of. No costs.

A.G. Appl".al disposed of.

'