Vithal Krishnaji Nivendkar Vs.
Parduman Ram Singh & ANR  INSC 112 (27 March 1962)
Rent Control-Donation received by a person
for charitable trust--When an offence-Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947 (Bom. 57 of 1947) s. 18 (1).
The appellant was the President, Trustee and
Secretary of a Sangh, which was a public trust registered under the Bombay
Public Trust Act. 1950. The appellant agreed to grant the lease of a
residential block, which was owned by the Sangh, at a monthly rent of Rs. 85.00
in favour of the first respondent on payment of Rs. 3,251/- as donation to the
building fund of the said Sangh, which was paid before the first respondent
actually occupied the premises. The appellant was convicted under s. 18 (1) of
the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, by the
Presidency Magistrate who held that the amount was received as premium, as a
condition precedent for letting the premises. On appeal the High Court held that
the aforesaid payment even if it did not come within the expression
"premium or other like sum" for granting the tenancy of the premises,
it was received by the appellant as "consideration other than the standard
rent" in respect of the grant of a lease of the premises and dismissed the
appeal. The appellant came up by special leave in appeal to the Supreme Court.
The question is whether a sum of money paid
ostensibly .as a donation by a person to the person acting on behalf of the
landlord, which was a charitable trust, in respect of the grant a lease of the
premises, came within the expression "fine, premium or other like sum or
deposit or any consideration other than the standard rent" in sub-s. (1)
of 18 of the Act.
64 Held, that where the donation has been
received in respect of the granting of the lease and not as a free donation for
the advancement of the purposes of the Sangh it will come within the expression
"premium" or "consideration" in s. 18.
The consideration can be pecuniary or
The mere use of the word "donation"
I dose not take away the effect of the other expressions used which clearly
support that the payment was made for the purpose of getting the tenancy of the
The appellant was a trustee of the Sangh. He
was' receiving rent on account and on behalf of the Sangh and clearly therefore
he comes within the expression "landlord" as defined in the Act. The
fact that he had acted on behalf of the trust and not for any personal reasons
does not affect the question or the appellant's conduct coming within the
provision of s. 18 (1) and can affect only the quantum of sentence.
Karansey Kanji v. Velji Virji, (1954) 56 Bom.
L. R. 619.
CRIMINAL APPELLATE JURISDICTION : Criminal
Appeal No. 52 of 1960.
Appeal by special leave from the judgment and
order dated September 9, 1959, of the Bombay High Court in Criminal Appeal No
916, of 1959.
R. Gopalakrishnan, for the appellant.
H. R. Khanna and R, H. Dhebar, for the
respondent No. 2.
1962. March 27. The Judgment of the Court was
delivered by RAGHUBAR. DAYAL, J.-This appeal, by special leave, raises the
question whether a sum of money paid ostensibly as,a donation by a person to
the person acting on behalf of the landlord, which was a charitable trust, in
respect of the grant of a lease of the premises, came within the expression
'fine premium or other' like sum or deposit or any consideration other than the
standard rent' in sub-a. (1) of a. 18 of the Bombay 65 Rents, Hotel and Lodging
House Rates Control Act, 1947 (Bom.
Act LVII of 1947), hereinafter called the
The question arises in these circumstances.
The appellant was the President, Trustee and Secretary of the Tillori Kunbi
Samajonnati Sangh (hereinafter called the Sangh), Bombay, in 1958. The Sangh
was a public trust registered under the Bombay Public Trusts Act, 1950. The
first respondent approached him for taking on rent one of the residential
blocks of Waghe Hall at St. Xavier Road, Parel Bombay, which was owned by the
aforesaid Sangh. The appellant agreed to grant the lease of the premises at a
monthly rental of Rs.85/- in favour of the first respondent on payment of
Rs.3251/- as donation to the building fund of the said Sangh. The first
respondent paid this amount in four installments, three of which were paid
prior to May 1, 1958, and the fourth, of Rs.1,000/- on May 1, 1958, before his
actually occupying the premises. , The appellant admits the receipt of this
amount of Rs.3251/, for donation to the building fund. He contends that he was
not a landlord' as defined in the Act. The Presidency Magistrate, 7th Court,
Dadar, held that the amount was received as a premium, as a condition precedent
for letting the premises to the first respondent and that therefore the
appellant committed the offence under s.18(1) of the Act.
On appeal, the High Court of Judicature at
Bombay held that aforesaid payment, even if it did not come within the
expression "premium or other like sum', for granting the tenancy of the
premises it was received by the appellant as ,consideration other than the
standard rent' in respect of the grant of a lease of the premises and therefore
the conviction was correct. It accordingly dismissed the appeal. It is against
this order that the appellant has filed this appeal.
66 Learned counsel for the appellant has
urged that various enactments allowed companies to receive donations and that
the Memorandum of Association and the Rules of the Sangh also permitted receipt
of gifts of money, that the first respondent made the donation voluntarily and
that therefore the donation cannot amount to a `premium' or 'consideration'
contemplated by subs.(1) of s.18 of the Act. The fact that the Sangh, can
legally received donations from persons whether belonging to the Tillori Kunbi
community or not has no bearing on the question before us. If the donation has
been received in respect of the granting of the lease and not as a free
donation for the advancement of the purpose of the Sangh, it will come within.
the expression Pretoria,'. or consideration' in s. 18.
Both the Courts below have held that the so
called donation was not a free gift to the Sangh but was paid by the first
respondent and received by the appellant for the letting of the premises to the
first respondent. There is evidence on the record to support this finding of
fact. We see no reason to consider the finding vitiated by any error of law.
Our attention has been drawn by the learned
counsel for the appellant to the letter dated July 2, 1958, sent by the first
respondent to the Secretary of the Sangh. The first respondent said, in
"...I became a tenant of one of your
ground floor blocks by paying a donation of Rs.3251/- only and in return I was
promised a clean new block." This statement in no way supports the
contention for the appellant that the amount was paid as a free gift for
furthering the objects of the Sangh. On the other hand, it clearly states that
the first 67.
respondent became a tenant by paying a
donation of Rs.3251/-. The mere use of the word donation' does not take away
the effect of the other expressions used which clearly supports the finding of
the High Court that the payment was made for the purpose of getting the tenancy
of the, premises.
It was further urged that charitable trusts
are exempt from the operation of the Act and reference was made to the
provisions of s. 4 of the Act. Clause (ii) of sub-s.(2) of this section
provides that the State Government may direct that all or any of the provisions
of the Act shall. not, subject to such conditions and terms all it may specify,
apply generally to premises held by a public trust for a religious or
charitable purpose and let at a nominal or concessional rent. There is nothing
on the record to show that the State Government had issued any such directions.
Further, the amount charged for the premises
let to the first respondent cannot be said to be nominal and has not been shown
to be concessional rent. This contention therefore has no force.
The contention that the appellant does not
come within the expression 'landlord' defined in sub-s.(3) of s.5 has no force.
The expression 'landlord' includes a person who is receiving, or is entitled to
receive, rent in respect of any promises on account, or on behalf, or for the
benefit of any other person, or as a trustee for any other person. The
appellant was a trustee of the Sangh. He was receiving rent on account and on
behalf of the Sangh and clearly therefore he comes within the expression
'landlord' as defined in the Act.
It is further contended that the amount paid
does not come within the expressions 'premium' or 'consideration.' in sub-
s.(1) of s.18 of the Act. We do not agree. 'Premium' means any amount paid for
the purpose of getting a lease. It was 68 certainly paid as a 'consideration
for obtaining the lease in this case. We agree with the High Court that there
is no reason to restrict the expression consideration' to non- pecuniary
consideration alone, as was held in Karamsey Kanji v. Valji Virji '1) No good
reason exists for restricting the meaning of this word to non-pecuniary
consideration alone, even though any pecuniary consideration paid in respect.
of the grant of the lease will usually come within the expression 'Premium'.
The fact that the sentence of fine,, according to the provisions of sub.s.(1)
of s.18, is not to be less than the 'value of the consideration received' is
not sufficient to limit the expression consideration' to non-pecuniary
The previous rent-control Acts, viz., the
Bombay Rent Restriction. Act, 1939 (Bom. Act XVI of 1939) and the Bombay Rents,
Hotel Rates and lodging House Rates (Control) Act, 1944 (Act VII of 1944) which
were repealed by the Act provided in s.10 and 8 respectively, against the,
landlord's requiring the payment of any fine, premium or any other like aura in
addition to the rent in consideration of the grant, renewal or continuance of a
tenancy of any premises. The addition of words deposit or any consideration' in
sub-s.(1) of s.18, must have been to cover all payments besides the standard
rent in consideration of getting the tenancy. In the circumstances, it need not
be a matter of surprise that certain extra payments may come within more than
one of the expressions fine', 'premium' 'other like sum', 'deposit' or
In this connection, reference may be made to
Explanation 1 to sub-s.(4) to s.18 which reads:
"For the purpose of sub-section (1) (a)
except as provided in sub-section (3) (1) (1954) 56. Bom. L.R. 619.
69 receipt of rent in advance for more than
three months in respect of premises let for the purpose of residence, or (b)
where any furniture or other article is sold by the landlord to the tenant
either before or after the creation of tenancy of any premises, the excess of
the price received over the reasonable price of the furniture or article, shall
be deemed to be a fine or premium or consideration." The receipt, of rent
referred to in cl.(a) and the excess of the price received over the reasonable
price of the furniture or other article referred to in cl.(b) is always to be in
cash and yet the Explanation provides that the receipt of rent and the excess
of the price coming within the provisions of cls.(a) and (b) respectively,
shall be deemed to be a fine or premium or consideration'.
Lastly, it was urged that the appellant just
acted on behalf of the trust and not for any personal reasons. Such a
consideration does not affect the question of the appellant's conduct coming
within the provisions of sub- s.(1) of s.18 and can affect only the sentence,
which, in the present case, had been the minimum possible, under the law. The
appellant was sentenced to imprisonment till the rising of the Court and' a
fine of Rs. 3251/-. Sub-s. (1) of s.18 provides that a person, on conviction
for the offence under that section be punished with imprisonment for a, term
which may extend to six months and shall also be punished with fine which shall
not be less than the amount of fine, premium or sum or deposit or the value of
the consideration received by him.
We are therefore of opinion that the
appellant has 'been rightly convicted under s.18(1) of the Act and, accordingly
dismiss the appeal.