Vs. K.V. Varghese  Insc 429 (23 August 2005)
R.C. Lahoti & P.K. Balasubramanyan
OUT OF .S.L.P) NO.4189 OF 2004) P.K. BALASUBRAMANYAN, J.
tenant is before us. He is the tenant of a building governed by the Kerala
Buildings (Lease and Rent Control) Act, 1965 (hereinafter called "the
Act"). He took on rent a room in the building belonging to the
respondent-landlord. He executed an unregistered, insufficiently stamped rent
deed on 5.9.1988 which was accepted by the landlord. He entered into possession
thereunder. The lease was taken for the purpose of conducting a gold and silver
jewellery shop. As per the rent deed, the term of the lease was 15 years. The
rent payable was Rs.750/- a month. A sum of Rs.85,000/- was given to the
landlord as security. That amount was to be returned to the tenant when he
vacated the room. The monthly rent of Rs.750/- was to be paid by the 5th of the
succeeding month. The tenant was given the right to install electrical fittings
and to take water and telephone connections. He had the right to install all
necessary instruments or equipments in the room for the purpose of gold and
Disputes seem to have arisen immediately thereafter. The tenant did not tender
the rent that fell due on 5.10.1988. He removed a door and three windows from
the walls of the room and closed up those openings.
cut-off the rafters in the front to a length of two feet. He lowered the level
of the floor by one foot. He erected two pillars touching the walls and fixed a
rolling shutter in front of the shop. These were done without the written
permission of the landlord.
landlord issued a notice in terms of the proviso to Section 11(2) of the Act.
He called upon the tenant to pay the rent in arrears. The tenant failed to
tender the rent. He filed an application R.C.P. No.2 of 1990 before the Rent
Controller for eviction of the tenant. He invoked Section 11(2) of the Act
pleading that the tenant had not paid or tendered the rent due by him for the
period from 5.10.1988 to 31.12.1990 in spite of the statutory notice. He also
relied on the ground under Section 11(4)(ii) of the Act. He alleged that the
tenant had used the building in such a manner as to destroy or reduce its value
or utility materially and permanently. His case was that by removing the door
and the windows and by his other acts the tenant has incurred the liability to
be evicted under Section 11 (4) (ii) of the Act. The tenant resisted the
application. He pleaded that the landlord did not cooperate with him in getting
electricity and water connections and refused to issue receipts for the rent he
tendered. Therefore, he had not paid the rent. He had not done anything in the
building which materially affected the value or utility of the building. In
fact, what he had done, had only made the building safe and enhanced its value.
He pleaded that he was not liable to be evicted. He also deposited the rent
that was in arrears so as to enable him to contest the proceedings.
commission was taken out. The Commissioner visited the shop in the presence of
the tenant. The Commissioner noted the relevant features and also recorded what
the tenant told him in respect of the removal of the door and the windows. He
noted the lowering of the floor, the erection of the pillars and the fixing of
the rolling shutter. The landlord examined himself as PW 1. He admitted the
rent note. He admitted that he had received Rs.85,000/- as advance. He pleaded
that in spite of the statutory notice, the tenant had not paid the rent. He
also spoke of the alterations to the building brought about by the tenant. The
tenant, in his evidence tried to justify the non payment of rent. He deposed
that what he had done in the premises was only to facilitate the jewellery
trade for which the building was taken on rent. He was entitled to do so on the
terms of the rent deed. What he had done, was only to strengthen the premises.
The value of the building has not been permanently or materially diminished. He
was not liable to be evicted.
Rent Controller found that the rent note was inadmissible in evidence. It was a
tenancy from month to month. He found that the tenant had defaulted payment of
rent. An order for eviction under Section 11(2) of the Act was liable to be
passed. The fact that he had deposited the entire rent during the pendency of
the proceedings, was relevant only for the purpose of Section 11(2)(c) of the
Act. He found that the question of material alteration had to be approached
from the angle of the landlord.
that angle, it was clear that by the closing of the windows and the door, the
amenity to the room had been destroyed by the tenant. The fact that such
closing of the door and the windows was necessary to secure the jewellery of
the tenant was not relevant. What had been done amounted to material alteration
within the meaning of Section 11(4)(ii) of the Act. The tenant was liable to be
evicted. He, thus, ordered eviction on both grounds.
tenant filed an appeal under Section 18 of the Act. He raised a fresh
contention. The term of the lease was 15 years. The landlord was not entitled
to seek eviction before the expiry of that term. The claim for eviction was
barred by Section 11(9) of the Act. Since this aspect is not agitated before
us, it is only necessary to mention that this contention was negatived by the
Appellate Authority. It held that since the rent deed was unregistered, it was
not admissible in evidence. The tenant could not take advantage of the term
therein. By payment and acceptance of rent, only a tenancy from month to month
has come into existence. Therefore, the application for eviction filed before
the expiry of 15 years, was maintainable.
regards the claim under Section 11(2) of the Act, that authority reiterated the
reasoning of the Rent Controller and found that the tenant had not tendered the
rent or established that as a matter of fact, the landlord had refused to issue
a receipt for payment of the same. It relied on a notice issued by the tenant
himself accusing the landlord of not cooperating in his getting electrical and
water connections and taking the stand that he was not bound to pay the rent.
Regarding the claim under Section 11(4) (ii) of the Act, it held that the
alterations made by the tenant came within the purview of that provision. The
order for eviction thereunder was justified. It dismissed the appeal.
tenant filed a revision under Section 20 of the Act. The High Court,
re-appraised the relevant materials. It held that the application for eviction
was not premature and was maintainable. It further held that the order for
eviction under Section 11(4)(ii) of the Act was sustainable.
was no specific discussion on the order for eviction under Section 11(2) of the
Act and the revision was dismissed and the orders for eviction were confirmed.
This is what is challenged here.
First, the claim under Section 11(4)(ii) of the Act. The relevant provision in
the Act reads :- "11(4) A landlord may apply to the Rent Control Court for
an order directing the tenant to put the landlord in possession of the
building- (i) ***** (ii) if the tenant uses the building in such a manner as to
destroy or reduce its value or utility materially and permanently." For
seeking eviction, the user should destroy or reduce the value or utility of the
building materially and permanently. Even if the user leads to some reduction
in the value or utility of the building, eviction cannot be ordered.
if the value or utility is materially and permanently affected, an order for
eviction could be passed.
The Kerala High Court has interpreted this provision in the Haneef, (1967
K.L.T. 841) held that the demolition of any wall in a building can be deemed to
be an act of waste which is likely to impair materially the value and utility
of the building. But that was not enough.
Court had to see whether there was sufficient evidence to show that the tenant
had committed such acts of waste as to impair the value or utility of the
building. It was found that the motive for the removal of the wall was for
convenience of trade. Since it was not shown that any damage to the building
was caused by the removal of the wall and the boundary was not obliterated, an
order for eviction under Section 11(4)(ii) could not be granted. When the
tenant destroyed a boundary wall, the decision in Aboobaker (1971 K.L.T. 273)
that the pulling down of a wall might or might not amount to waste, and the
question will depend upon the purpose for which the wall was pulled down. When
the purpose was to remove the boundary wall and that resulted in the
obliteration of the boundary line and the tagging on of the property with the
adjoining property through the medium of a corridor, it attracted Section 11(4)(ii)
of the Act. Shanmugam fast rule that the removal of a wall or construction of a
door or providing a common verandah should, necessarily lead to an inference
that there was destruction or reduction of the value or utility. Such acts of
the tenant have to be judged on the facts of each case. Mere proof of reduction
or even destruction of utility or value was not sufficient and the words
"materially and permanently" were important. The destruction or
reduction of utility or value of the building must be of a reasonably substantial
after removing a portion of the wall, could not be taken as an act which
destroyed or reduced the value or utility of the building. Nor could it be
considered to be an act which materially affected the value or utility of (1)
K.L.J. 86) it was held that the removal of a ceiling attracted Section
11(4)(ii) of the Act since the value of the building was not only reduced but
its utility was also materially and permanently reduced. Mathew vs.
(1998 (2) K.L.T. 19) held that the failure of the tenant to protect the
furniture in the building passed on to him with the letting of the building,
(2001 (3) K.L.T. 815) it was held that on proof of minor destruction or
alteration even if it resulted in marginal reduction of value or utility, the
landlord could not get an order of eviction under Section 11(4)(ii) of the Act.
the dismantling of the original roof followed by the substitution of a new
roof, the replacing of old walls by new walls, the old flooring by a new
flooring and the placing of shutters replacing the doors after practically
demolishing the old building, were acts that attracted Section 11(4) (ii) of
This Court had considered the scope of the analogous provision in sister
enactments. The U.P. Cantonments (Control of Rent and Eviction) Even if the
alterations did not cause any damage to the premises or did not substantially
diminish its value, the alterations were material alterations.
that basis alone, the landlord was entitled to evict the tenant. That was in
the context of the provision which enabled a landlord to get an order for
eviction, if the tenant had, without the permission of the landlord, made any
construction which has materially altered the accommodation. Eviction could
also be ordered even if that construction or alteration was likely to
substantially diminish the value of the building. The difference with the Kerala
Act is that the two requirements were disjunctive. It was enough to satisfy
either one of them. It was clarified that although the expression
"material alteration" was not defined, the question would depend on
the facts of each case. In that case the acts of the tenant were held to amount
to interpreting the same provision, it was held that the question whether a
construction materially altered the accommodation was a mixed question of fact
and law. The dictionary meaning of the expression "materially" and
"alter" were considered. It was held to mean "a substantial
change in the character, form and the structure of the building without
destroying its identity". It had to be seen whether the constructions were
substantial in nature and they altered the form, front and structure of the
exhaustive list of constructions that constitute material alteration could be
given. The determination of that question depended on the facts of each case.
On facts, it was held that there was no material alteration. It was also laid
down that the construction of a temporary shed in the premises which could
easily be removed did not come within the mischief of the section.
of a wooden balcony in the showroom did not amount to material alteration.
Replacing of wooden plank on the front door of the building by a rolling
shutter was held to be not an alteration that caused any damage to the building
and that was held not to provide a ground for Thondarperienambi and another
(AIR 1992 SC 977). In Vipin Kumar vs. Roshan Lal Anand (1993 (2) SCC 614) a
claim under Section 13(2) (iii) of the East Punjab Urban Rent Restriction Act,
1949, it was held that the impairment of the value or utility of the building
was from the point of the landlord and not of the tenant. It had to be shown
that there was impairment of the building due to acts of the tenant and,
secondly, it had to be shown that the utility or value of the building had been
materially impaired. The Court went on to say that the statute on proof of
facts gave discretion to the Court to order eviction. The wording of the
provision was "if the tenant has committed such acts as are likely to
impair the value or utility of the building or rented land". The Rent
Controller had to independently consider and exercise the discretion vested in
him keeping in view the proved facts to decree ejectment. It was for the
landlord to prove such facts which warrant the Controller to order eviction in
his favour. In Waryam it was held that enclosing a verandah by constructing
walls and placing a rolling shutter in front, did not justify an inference that
the value or utility of the building had been impaired, in the absence of
evidence led by the landlord to prove that the value or utility had been
affected. So an order of eviction could not be granted.
From the above, it is clear that the question depends on the facts of the case.
The nature of the building, the purpose of the letting, the terms of the
contract and the nature of the interference with the structure by the tenant,
are all relevant. The destruction or damage has to be adjudged from the stand
point of the landlord. Let us look at the facts in the present case.
building is 75 years old. According to the tenant, it is 80 years old. The
difference is not of any significance. It is the northern room in a building
consisting of a number of rooms. It is let out for 15 years for a jewellery
trade. The term has, of course, not come into effect for want of registration
of the deed. The door in the western wall has been bricked up. The windows on
the northern, western and southern walls have also been bricked up. Obviously,
the bricked up portions can be removed and the doors and windows restored
without weakening the structure. But more importantly, the level of the floor
was lowered, the rafters cut, two concrete pillars erected and a rolling
shutter fixed. The lowering of the floor and the tampering with of the roof, is
of some significance. They could lead to impairment of the value or utility of
the building, materially and permanently. That again has to be judged in the
light of the surrounding circumstances. But a rolling shutter has been fixed.
That provides more security to the premises. The height of the floor can be
restored without impairment to the structure. Here, we find that the landlord
has not even pleaded that the alterations made by the tenant have destroyed or
reduced the value or utility of the building materially and permanently. No
doubt, he has stated so in his evidence. But the tenant has stated that,
considering that it was a jewellery business that was being started, these
things had to be done.
of the premises was essential. He had given to the landlord Rs. 85,000/- as
security to be returned, when he vacated the building. The value of the
building, if at all, has only been enhanced. In this state of the record, it is
not possible to infer that the acts of the tenant have materially and
permanently destroyed or reduced the value or utility of the building.
age of the building cannot be ignored. The purpose of the letting cannot be
find that the Authorities below have not approached the question from the
proper perspective. They have not given sufficient emphasis to the statutory
requirement of the effect being material and permanent. It is "material
and permanent". The words are not disjunctive, like in some other Acts. Here
the landlord had not proved the material and permanent impairment in value or
utility. One suspects that the value and utility are enhanced. The landlord
admits that he will get a higher rent if the room is again let out. We are,
therefore, satisfied that interference is justified. We hold that the landlord
has failed to prove that the acts of the tenant constitute the user of the
building in such a manner as to destroy or reduce the value or utility of the
building materially and permanently. We set aside the order for eviction under
Section 11(4) (ii) of the Act.
Now, the claim under Section 11(2) of the Act. There cannot be any dispute that
the tenant had not paid the rent from 5.10.1988 onwards as claimed by the
landlord. He had deposited the rent in the proceeding. If he has done so, it is
relevant only for considering the question whether he is entitled to relief in
terms of Section 11(2)(c) of the Act. The only question is whether the fact
that he had paid a sum of Rs. 85,000/- as security, which the landlord was
liable to refund to him at the time of his vacating the room, could be taken
note of as an amount available with the landlord for being adjusted against the
rent due. Under Section 8(1) of the Act, the landlord is not entitled to take
any premium or other like sum. Under Section 8(2), he could receive or
stipulate for payment only, an amount not exceeding one month's rent by way of
advance. In both cases, if he has received it, it becomes refundable at once.
Hence, it would be an amount available with Court has declared that provisions
relating to fair rent, that is, Sections 5, 6 and 8 of the Act, put together,
are ultra vires the Constitution of India and are void. The questions may have,
therefore, to be considered without reference to Section 8 of the Act. In a
case where a substantial amount had been received as advance at the time of
letting, which was liable to be refunded without interest on the expiry of the
lease, this Court held in amount of arrears of rent was smaller than the
advance amount held by the landlord on account of the tenant, there was no
default in payment of rent and the grant of eviction on the ground of arrears
of rent was not justified. (1996 (3) SCC 45). For the purpose of this case,
especially when the tenant had pleaded that he had deposited the rent even
while filing his objection in the Rent Control Court, we do not think that it is necessary to pronounce finally
on this question. We feel that it is only necessary to clarify that the tenant
will have two months from today to deposit the rent in arrears till date and
the other sums in terms of Section 11(2) (c) of the Act so as to avert the
execution of the order for eviction on the ground of arrears of rent granted
under Section 11(2) of the Act.
The appeal is, thus, allowed by setting aside the order of eviction under
Section 11 (4)(ii) of the Act and by granting the tenant time of two months
from today for averting the order of eviction under Section 11(2) of the Act by
making the deposit (or by making up the needed deposit) in terms of Section
11(2)(c) of the Act. We make no order as to costs.