R. Venkataswami Naidu & ANR Vs.
Narasram Naraindas  INSC 124 (27 April 1965)
27/04/1965 SARKAR, A.K.
CITATION: 1966 AIR 361 1966 SCR (1) 110
CITATOR INFO :
RF 1969 SC 435 (5) E 1970 SC1683 (27,29)
Madras City Tenants Protection Act, 1922, ss.
2(4), 3, 9 and 12 Tenants building on land in breach of covenant whether
entitled to benetits under ss. 3 and 9.
The appellants were tenants who held over
after the expiry of their lease and built structures on the land in breach of a
covenant not to build. In a suit for their ejectment they asked the Court to
direct the landlord to sell the land to them under s. 9 of the Madras City
Tenants Protection Act, 1922 which had, pending the, suit, been extended to the
area. The benefit under s. 9 was available to tenants who were entitled under
s. 3 to compensation for their structures. According to s. 3 every tenant would
on ejectment be entitled to be paid as compensation the value of any building
which may have been erected by him. The appellants claim to the benefit under
s. 9 was accepted by the trial Court, the First appellate Court and a single
Judge of the High Court. But in the Letters Patent Appeal the Division Bench
took the view that since a covenant not to build is enforceable in law and a
superstructure in contravention of it is liable to be demolished it would be
anomalous to compensate the tenant under s. 3 for such a structure, and
therefore s. 3 could not be applicable to tenants who built structures in
breach of their covenant.
It also took note of the words in the
preamble that the Act was intended to protect tenants who had constructed
buildings on others lands "in the hope that they would not be
HELD : (i) The covenant entered into by the
tenants could not be taken into account for the purpose of construing the scope
of s. 3. The High Court had fallen into this error. [1 15F] (ii)The word
'tenant" in s. 3 must be understood only in the sense that the word is
defined in the Act. There is no reason for saying that the word 'tenant' in s.
3 excludes tenants who put up structures on the land in breach of a.
covenant not to build. [114 C-D] (iii)A
covenant not to build, if it could affect the right of the tenant to claim
compensation under s. 3, would be of no effect for under s. 12 nothing in any
contract shall take away a tenant's rights under the Act. Therefore in spite of
the covenant the tenants were entitled to their rights under s.3 and s. 9. [114
F-G] (iv) Since the language of s. 2(4) and ss. 3 and 9 was clear and
unambiguous there was no need to resort to the preamble for interpreting these
sections. A preamble cannot operate to annul a section. [115 C-D] N. Vajrapani
Naidu v. New Theatre Carnatic Talkies Ltd., A.I.R. (1964) S.C. 1440, referred
Per Hidayatullah, J. (i) Section 3 is general
and applies to every tenant and would include all and sundry tenants as also
tenants holding, met. [117D] 111 (ii)The kind of building hinted at in the
preamble namely, one constructed "in the hope" of the continuance of
the tenancy does not find any mention in the operative part of the Act or in
the definition of building. It is therefore difficult to read this limitation
(as was contended) in ss. 3 and 9 where 'building' is used without any
qualification and implies only a constructions [118 F-G] Deo v., Brandling,
(1828) 7 B & C, 643, referred to.
(iii)Sections 3 and 9 are imperative and s. 9
is expressly made applicable to pending suits in ejectment such as the present
one. Appellants made application under s. 9 within the time limited therefor.
The result must obviously follow unless the latter part of s. 12 could save the
respondent. That could only be if the stipulations by the tenant not to build
had been 'in writing registered', but the lease-deed in question, though in
writing, is not registered. [119 B-C]
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 146 of 1965.
Appeal from the judgment and order dated
September 21, 1962 of the Madras High Court in L.P.A. No. 29 of 1961.
P. Ram Reddy and R. Ganapathy Iyer, for the
C. B. Agarwala and R. Gopalakrishnan, for the
The Judgment of Sarkar, Subba Rao and
Mudholkar, JJ. was delivered by Sarkar J. Hidayatullah J. delivered a separate
Sarkar J. By an unregistered instrument of
lease dated February 3, 1953, the respondent let out a piece of vacant land in
the town of Coimbatore to the appellants for the term of one year at a rent of
Rs. 30/per month. The tenants held over after the expiry of the term reserved
and the tenancy was continued. The lease provided that the tenants "shall
not raise any building whatsoever in the vacant site" but they committed a
branch of the covenant by putting up a building on the land.
On December 4, 1956, the lessor filed a suit
for ejectment of the tenants and their sub-tenants. Pending the suit, the
Madras City Tenants' Protection Act, 1921, was on February 19, 1958 made
applicable to the town of Coimbatore and thereupon the tenants made an application
in the suit under S. 9 of the Act for an order directing the lessor to sell the
land to them. The trial Court, a learned Sub-Judge in first appeal and
Anantanarayanan J. in second appeal to the High Court of Madras held that the
tenants were entitled to the order. A Division Bench of the High Court took a
contrary view in a Letters Patent Appeal preferred by the lessor. The tenants
have appealed to this Court against the judgment of the Division Bench.
112 The question naturally turns upon the
provisions of the Act the relevant parts of which we will, therefore, set out
S.2 (4). "Tenant means tenant of land
liable to pay rent on it.........." S.3. "Every tenant shall on
ejectment be entitled to be paid as compensation the value of any building
which may have been erected by him." S.9. "Any tenant who is entitled
to compensation under section 3 and against whom a suit in ejectment has been
may...... apply to the court for an order
that the landlord shall be directed to sell ....
the extent of land to be specified in the
application." S.12. "Nothing in any contract made by a tenant shall
take away or limit his rights under this Act, provided that nothing herein
contained shall affect any stipulations made by the tenant in writing
registered as to the erection of buildings in so far as they relate to
builddings erected after the date of the contract." It will be noticed
that a tenant entitled to purchase under S. 9 must be a tenant entitled to
compensation under s. 3.
The real question, therefore, is whether the
tenants in the present case were entitled to compensation under s. 3. We may
observe that we shall not in the present case be concerned with the proviso to
s. 12 as the lease was not by a registered document and hence references in
this judgment to that section will be to that section without the proviso.
We should also state that by virtue of s. 10,
s. 9 is applicable to suits pending in Coimbatore courts when the Act was
applied to that city.
It was not disputed in this Court that if the
covenant was left out of consideration, the tenants would be entitled to the
benefit of ss. 3 and 9. They would be tenants within the definition of that
word in the Act and the ingredients of the other two sections would be fully
satisfied. The learned Judges of the Division Bench also accepted this
The question then is, Does the covenant make
any difference ? The learned Judges thought, in our opinion wrongly, that it
did. They put the matter in this way : A covenant not to build is valid. If it
is valid, it must be enforceable all along and, therefore, also after the
termination of the lease by an order for demolition. If it can be so enforced,
S. 3 which gives the tenant a right to compensation for the building cannot be applicable
to a case where 113 there was such a covenant for the Act could not at the same
time have countenanced a compulsory demolition of a building at the instance of
the lessor and a right in the tenant to compensation for that building. The
enforceability of the covenant, therefore, indicated the scope of s. 3 in spite
of its wide terms and the equally wide definition of the word
"tenant" in the Act. That scope was that the section had no
application here there was such a covenant. Learned counsel for the lessor
advanced the same reasoning summarizing the position by the observation that
the erection contemplated by s. 3 was a lawful erection, that is, not in breach
of any covenant not to build.
It seems to us that this reasoning is clearly
The learned Judges held that the covenant not
to build was valid. They, therefore, must have held that it did not affect a
right under s. 3 for if it did, it must have been ineffective under s. 12. Now
when the learned Judges held that the covenant did not affect the right under
s. 3, they must have decided what that right was and who were the tenants
entitled to it. In deciding the validity of the covenant they must, therefore
have fully and finally interpreted the section and decided its scope and effect.
After that they could not again proceed to
ascertain the scope of the section. But this is what they did and this is where
their principal error lay. Basing themselves on one interpretation of the
section they held the covenant to be valid and basing themselves on the
validity of the covenant so found, they gave the section a second and a
different interpretation. In deciding the validity of the covenant they had not
said that s. 3 had no application where the covenant existed. If they had, they
would have decided what they called the scope of the section without any aid
from the covenant and there would have been no need for deciding the scope of
the section again on the basis of the validity of the covenant. Therefore, on
the second occasion they found the scope to be different from what they had
found it to be on the first occasion. But, of course, a section has only one
interpretation and one scope; a process resulting in more than one
interpretation and scope is clearly erroneous.
Now when deciding that the covenant did not
affect the right of tenants under s. 3 and was, therefore, valid, the learned
Judges did not say that a tenant who built in breach of it was not a tenant as
contemplated by s. 3 and was not entitled to its benefits; in fact they expressly
took a contrary view. They said, and in our view rightly, "there is no
express provision in the Act, limiting the operation of section 3...... to the
tenants who were authorised by the terms of the lease to put up a building.
Prima facie, 114 therefore, the term 'tenant' might not exclude one who puts up
a superstructure on the land in breach of a covenant not to build." They
stated that this was the view to be gathered from a consideration of the entire
Act. But clearly there was nothing else they could legitimately consider for
interpreting s. 3. It would, therefore, appear that the words "prima
facie" with which they qualified their observation were inapposite. In
effect. then the learned Judges said this : The contract was valid as it did
not affect the right under s. 3 of any tenant as defined in the Act and since
the contract was valid, a tenant who had built in breach of it was not entitled
to any right under s. 3.
This is a wholly untenable proposition.
We think that the word "tenant" in
s. 3 must be understood only in the sense that word is defined in the Act. We
repeat that there is no reason for saying that the word "tenant" in
s. 3 does not include all tenants as defined in the Act. None has been shown
apart from that given by the learned Judges which we think is ill found
Therefore the appellants are tenants as contemplated by s. 3. Now the covenant
says that the tenants shall not build. Either that affects the right of the
tenants to claim compensation for the buildings constructed in breach of it at
the termination of the lease or it does not. If it does not, then no further
question arises there will then be nothing purporting to disentitle the tenants
of their rights under s. 3 and the case will be the same as where there is no
covenant at all. If such is the case then, as we have said earlier, there is no
dispute that the tenants are entitled to their rights under ss. 3 and 9. If
however, the covenant not to build affects the right to claim compensation
under s. 3, such a covenant would be of no effect, for under s. 12 nothing in
any contract shall take away a tenant's rights under the Act. The case will
then also be the same as if there was no covenant at all. That is why we think
that the covenant not to build does not affect the question in hand.
The tenants must be held entitled to their
rights under ss. 3 and 9 in spite of the covenant not to build and a breach of
it by them.
Before Anantanarayanan J. the argument for
the lessor was somewhat different. It was said that s. 3 had to be read in
harmony with the general law, that is, s. 108(h) of the Transfer of Property
Act, which gave the tenant a right to build when the lease did not prohibit
building 'and, therefore, the erection under s. 3 must be one permitted by law.
The learned Judge rejected this, contention, in our opinion rightly, on the
ground that s. 3 and 115 s.9 contained no words justifying it and under s. 12
no contract could be made affecting the sections earlier mentioned. He also
pointed out that s. 13 of the Act specifically provided that the Transfer of
Property Act must be deemed to have been repealed to the extent necessary to
give effect to the Act so that there was no scope for harmonising the Act with
the Transfer of Property Act. We entirely agree with the learned Judge's views.
We must however observe that this argument was not advanced in this Court.
Before leaving this matter a reference to the
preamble of the Act is necessary. It states that the Act was passed "to
give protection to tenants who...... have constructed buildings on others'
lands in the hope that they would not be evicted." The learned Judges of
the Division Bench found it to be too vague to be taken as defining a definite
ascertained class of tenants. In any case, no resort to the preamble would, we
think, be justified in interpreting the definition of tenant in s. 2(4) as the
words used in it are clear and unambiguous. We observe that the language used
in ss. 3 and 9 also admits of no doubt as to the meaning intended. A preamble
cannot of course operate to annul a section. We must here also say that learned
counsel for the lessor did not rely on the preamble to support his contention.
We think it right to point out before we
conclude that N. Vairapani Naidu v. Naw Theatre Carnatic Talkies Ltd. to which
our attention was drawn, does not touch the point with which we are concerned,
for it turned on the proviso to s. 12 and that proviso has no application to
the present case.
For these reasons we think that the judgment
under appeal was erroneous and must be set aside. We agree with Anantanarayanan
J. that the appellant tenants had a right under s. 9 of the Act to purchase the
land leased in spite of the covenant not to build and the breach of it by them.
The covenant cannot be used for interpreting
s. 3 or s. 9.
The appeal is allowed. The judgment of the
Division Bench is set aside and that of Anantanarayanan J. is restored.
The appellants will get the costs in this
Court and in the Division Court.
Hidayatullah, J. I agree that this appeal
must succeeded but I would like to state the reasons somewhat differently.
Appellants 1 and 2, who were tenants of the
respondent landlord, seek the enforcement of s. 9 of the Madras City Tenants'
Protection Act, 1921, which was extended to Coimbatore on February 19, 1958. By
a 116 written (but not registered) lease-deed the appellants I and 2 took on
lease for a year from February 10, 1953, a vacant site on a rent of Rs. 35 per
month. The lease-deed contained a term that no building should be built on the
land. Without the knowledge and consent of the landlord the appellants I and 2
built structures on the vacant site and continued to hold over even after the
expiry of the year.
They inducted sub-tenants. The
respondent-landlord sued in ejectment in 1956 and the suit stood closed for
arguments on February 25, 1958. On that date appellants I and 2 applied under
S. 9 of the above Act claiming the right to purchase the land. The case was
reopened and some more evidence was received. The District Munsif, Coimbatore
by his judgment dated April 8, 1958 accepted the claim of appellants 1 and 2
and took action to determine the price for the land as required by the Act. An
appeal by the respondent-landlord before the Subordinate Judge, Coimbatore and
a second appeal in the High Court failed. 'Me present appeal is from the
judgment dated September 21, 1962 of the Division Bench in an appeal filed
under cl. 15 of the Letters Patent and by certificate from the Division Bench.
By that judgment the decision of the Single Judge was reversed and the
application under s. 9 of the Act was ordered to be dismissed. There was,
however, a remit for disposal on other points.
The Act which is relied upon by the
appellants is an Act which was intended to apply in the first instance to the
Madras City but could be extended to other towns and villages. It was, as the
long title shows, intended "to give protection to certain classes of
tenants in Municipal towns and adjoining areas in the State of Madras".
The last eleven words were substituted for the words "in the City of
Madras" by an amending Act of 1955. The preamble of the Act reads
"Whereas it is necessary to give protection to tenants who in municipal
towns and adjoining areas in the State of Madras have constructed buildings on
others' lands in the hope that they would not be evicted so long as they pay a
fair rent for the land;............." The words underlined were
substituted for the words "in many parts of the city of Madras" by
the same amending Act.
The Act defines the word "building"
so as to include every structure, permanent or temporary and 'land' to exclude
"buildings" and "tenants" as "tenant of land liable to
pay rent on it, every person deriving title from him", and including
"persons who con117 tinue in possession after the termination of the
The appellants I and 2 were thus tenants of
land excluding the buildings. The Act then give new rights of various sorts to
tenants,, and some of the sections are set out below :
"3. Payment of compensation on ejectment.
Every tenant shall on ejectment be entitled
to be paid as compensation the value of any building, which may have been
erected by him, by any of his predecessors-ininterest, or by any person not in
occupation at the time of the ejectment who derived title from either of them,
and for which compensation has not already been paid. A tenant who is entitled
to compensation for the value of any building shall also be paid the value of
trees which may have been planted by him on the land (and of any improvements
which may have been made by him) " The section is general and applies to
every tenant and would include all and sundry tenants as also tenants holding
In other words, the appellants would be
included. Sections 4 and 5 lay down the procedure for determination of
compensation. Section 6 provides for determination of rent.
They are not relevant here and we are not
concerned with ss.
7, 7A and 8. Section 9 (omitting portions not
relevant here) then states :
"9. Application to court for directing
the landlord to sell land.
(1)Any tenant who is entitled to compensation
under section 3 and against whom a suit in ejectment has been instituted or
proceeding under section 41 of the Presidency Small Cause Courts Act, 1882,
taken by the landlord, may, within one month of the date of Madras City
Tenants' Protection (Amendment) Act, 1955, coming into force or of the date
with effect from which this Act is extended to the municipal town or village in
which the land is situate or within one month after the service on him of
summons, apply to the court for an order that the landlord shall be directed to
sell the land for a price to be fixed by the court. The court shall fix the
price according to the lowest market value prevalent within seven years
preceding the date of the order and shall order that, within a period to be
determined by the court, not being less than three months and not more than
three years from the date of the order, the tenant 118 shall pay into court or
otherwise as directed the price so fixed in one or more installments with or
(2) (3)On payment of the, price the court shall
pass a final order directing the conveyance of the land by the landlord to the
tenant. On such order being made the suit or proceeding shall stand dismissed,
and any decree or order in ejectment that may have been passed therein but
which has not been executed shall be vacated.
Section 10 expressly applies ss. 4, 5, 6, 8
and 9 to pending suit in ejectment and to decrees passed in such suits but not
yet executed Section 12 provides as follows "12. Effect of contracts made
Nothing in any contract made by a tenant
shall take away or limit his rights tinder this Act, provided that nothing
herein contained shall affect any stipulations made by the tenant in writing
registered as to the erection of buildings, in so far as they relate to
buildings erected after the date of the contract." Section 13 provides
that the provisions of the Transfer of Property Act in its application to the
area where the Act was in force, to .,'.he extent necessary to give effect to
the provisions of the Act, shall be deemed to have been repealed or modified.
The Act is 'thus self-contained and the ordinary law of transfer of property
has no application.
The first point to notice is that the kind of
building hinted at in the preamble, namely, one constructed "in the
hope" of the continuance of the tenancy does not find any mention in the
operative part of the Act or in the definition of building. It is, therefore,
difficult to read this limitation (as was contended) in ss. 3 and 9 where
"building" is used without any qualification and implies only a
construction. A preamble is a key to the interpretation of a Statute but is not
ordinarily an independent enactment conferring rights or taking them away and
cannot restrict or widen the enacting part which is clear and unambiguous. The
motive for legislation is often recited in the preamble but the remedy may
extend beyond the cure of the evil intended to be removed. See Maxwell on
Interpretation of Statutes, 11th Edn. p. 45. If the enacting portion takes in
all buildings without qualification, it is 119 not possible to give the less
extensive import of the preamble a greater value against the enacted provision.
See Deo v. Brandling -(1828) 7 B & C 643, 660 per Lord Tenterden.
What then is the position ? Sections 3 and 9
are imperative and s. 9 is expressly made applicable to pending suits in
ejectment such as this was. Appellants 1 and 2 made the applications within a
week of the extension of the Act to Coimbatore and were within the time limited
for their action. The result must obviously follow unless the latter part of s.
12 can save the respondent. That can only be if the stipulations by the tenant
as to the erection of the building in so far as they related to buildings
erected after the date of the lease-deed had been "in writing registered'.
The leaseded is in writing but is not registered. By the first part of s. 12:
the tenant is protected against his own contract. The landlord is protected by
the second part, but the landlord here cannot seek the protection of the second
part because the leasedeed is not registered.
The appellants also claimed that the words
"stipulations as to the erection of buildings" cannot take in a
covenant not to construct at all, as laid down in N. Vajrapani Naidu and
Another v. New Theatres Carnatic Talkies Ltd.(1. The ruling certainly is in the
appellants' favour but it is not necessary to rely on it for the disposal of
this case. As at present advised, I would not like to rest my judgment on that
point of view.
I agree with the order proposed but for the
reasons given here.
Appeal allowed, (1) A.I.R 964 S.C. 1440.