Osman Fakir Mohammed Divecha Vs. All
Akbar Javed Sadakya & ANR  INSC 207 (28 August 1969)
28/08/1969 SHELAT, J.M.
CITATION: 1970 AIR 1893 1970 SCR (2) 118 1969
SCC (2) 623
Bombay Rents Hotel and Lodging House Rates
Control Act, 1947 (57 of 1947)-Part II, Sections 6( 1 ), 18 ( 1 )-Premises let
for construction of "buildings of every description howsoever"-If
premises let for purposes in s. 6(1)- Applicability of s. 18.
Certain non-agricultural lands in Bombay
suburban district were let out to the appellants by their owner. By an
indenture of lease the owner demised the lands to the respondents. The lease
deed empowered the lessees to construct upon the lands "buildings of every
description howsoever". It prohibited the lessees from mortgaging,
assigning or creating any charge on the lands or on the buildings that they may
choose to erect thereon, but provided that the lessees could take construction
loans from prospective tenants of such buildings. There was a further
stipulation that the lessees should pay the lessor a certain sum as advance for
the observance and performance of the covenants of the deed and the amount was
to be deducted' from the rent payable. The respondents filed suits under s.
13(1) of the Bombay Rents, Hotel and Lodging
House Rates Control Act, 1947, for eviction of the appellant and for recovery
of possession of the lands. The appellant resisted the suits on the ground that
part of the consideration payable under the lease was prohibited under s. 18(1)
of the Act. that the lease was, therefore, illegal and void and could not be
the basis for the respondents' right to recover possession under s. 13(1). The
lower courts rejected this contention.
On the question whether the lease attracted
section 18(1) of the Act,
HELD: Section 18(1) had no application. [121
A--B] Part II of the Act which contains s. 18, applies only to premises
"let for" the purposes mentioned in s. 6(1) namely.
"residence, education, business trade or
storage." It is the purpose of the lease and not any future choice of a
lessee which determines the application of Part 11. That is the clear and
obvious meaning of the words "let for" in s. 6(1). [121 A-B, D; 122
B] In the present case the purpose for which the lands were demised clearly was
for constructing "buildings of any description howsoever" and not for
constructing buildings for "residence, education, business, trade or
storage." within the meaning of s. 6(1). Because s. 18(3) permits
construction loans in respect of residential buildings only and the lease deed
provided for taking of construction loans, it does not follow that the purpose
of the lease was for erecting residential buildings. The provision for taking
construction loans is in the lease deed only as an exception to the covenant
against the lessee mortagaging, charging or assigning the demised land or the
buildings which may be erected thereon and not for laying down the purpose for
which the land was demised. Although the expression buildings of any
description howsoever" may include buildings for 119 residence the lessees
may choose not to put up any structure for any of the purposes mentioned in s.
6(1). [122 C--G] Mrs. Dossibai Jeejeebhoy v. Khemchand Gorumal,  3 S.C.R.
Civil Appellate Jurisdiction: Civil Appeal
No. 1649 of 1967.
Appeal by special leave from the judgment and
decree dated September 22, 23, 1967 of the Bombay High Court in Special Civil
Application No. 2293 of 1966.
H.R. Gokhale, Janendra Lal, and B. R
Agarwala, for the appellant.
S.T. Desai, A. G. Parikh, and P.C. Bhartari,
for the respondents.
The Judgment of the Court was delivered by
Shelat, J. In or about 1951, certain portions of plots Nos. 254 and 255,
situate at Bandra in Greater Bombay, were let out to the appellant by their
owner, Louis Fernandes.
The appellant thereafter constructed on those
portions certain structures wherein he has since been residing and carrying on
business. By an Indenture of Lease dated December 5, 1958 the said Louis
Fernandes demised the whole of the said plots in favour of the respondents for
a period of 99 years commencing from December 1, 1958 on a monthly rent of Rs.
401 and on the terms and conditions contained in the said Indenture. C1. 2(c) of
the said Indenture provided that the lessees thereby covenanted with the lessor
"not to assign, mortgage or charge the demised premises or the building or
buildings or any structures to be hereafter erected without first obtaining the
consent of the lessor and such consent shall not be refused by the lessor if it
is bona fide." The said sub-clause, however, permitted the lessee to take
construction loans from prospective tenants of a building he may erect on the
said demised land and to execute in favour of such tenant or tenants agreement
or agreements in form prescribed by the Rent Control Act. No such form, we were
informed, has been provided by the Act.
C1. 4 provided that on or before the
execution of the said Indenture the lessee should advance to the lessor a sum
of Rs. 10,000/-"for the observance and performance of the covenants and
stipulations on the part of the lessees hereinbefore contained and which amount
shall be a charge on the said land and premises hereunder mentioned and the
lessor shall allow the lessees to deduct every month a sum of Rs. 100/- (Rupees
one hundred) out of the rent payable by the lessees to the lessor and 120
credit the same towards the liquidation of this deposit amount till the whole
of this deposit amount is fully paid of". CL. 8 empowered the lessees
"at all times and from time to time hereafter to construct and erect upon
any part of the land hereby demised buildings of every description howsoever
but subject to the rules and regulations of the Municipality and Government
The respondents thereafter filed two suits in
the Small Causes Court at Bombay for eviction of the appellant and for
possession of the said portions of the said two. plots relying on s. 13 of the
Bombay Rents, Hotel and Lodging House Rates Control Act, 57 of 1947
(hereinafter referred to as the Act) which entitles a landlord to recover
possession of the premises let out to a tenant where the premises are land and
such land is reasonably and bona fide required by the landlord for the erection
of a new building.
The appellant resisted the suits inter alia
on the ground (which is the only ground which now survives in this appeal) that
part of the consideration payable under the said lease was prohibited under s.
18 of the Act, that the lease was, therefore, illegal and void and could not be
the basis for the respondents' right to recover possession under s. 13(1).
The Trial Court, as also the Appellate Bench
of the Small Causes Court, negative this contention on 3 grounds;
(1) that the said lease did not fall within
the scope of Part II of the Act which contains s. 18, (2) that assuming that it
did, the advance payment of Rs. 10,000 did not fall within the mischief of s.
18(1),' and (3) that even assuming that the lease fell within Part II of the
Act and further assuming that the said Rs. 10,000/- were within the mischief of
s. 18 ( 1 ) the provisions of s. 18 ( 1 ) affected the lessor but did not make
the lease invalid. Aggrieved by this decision the appellant went to the High
Court by way of a writ petition under Art. 227 of the Constitution. The High
Court dismissed the writ petition agreeing with the Appellate Bench on the
first and the second grounds, but leaving the third ground undetermined as in
its opinion it was unnecessary to decide it in the view it took on the first
and the second grounds. Hence this appeal by special leave.
Mr. Gokhale raised the very same contention
which the appellant raised unsuccessfully in the Small Causes Court and the
High Court. The question, therefore, for determination is, whether the, said
lease falls within the scope of Part II of the Act, for, if it does not,
obviously it would not attract the provisions of s. 18 (1 ) which is contained
in that Part.
The leased premises being land, admittedly
not used for agricultural purposes and being situated in the Bombay Suburbar
District, are clearly premises under s. 5(8) of the Act. But so far as Part II
is concerned, s. 6(1 ) provides that this Part shall apply 121 only to premises
"let for residence, education, business, trade or storage". As the
lease was not for any of the purposes set out in s. 6(1), Part II of the Act,
and therefore, s. 18(1) would obviously have no operation.
In Mrs. Dossibai N.B. Jeejeebhoy v. Khemchand
Gorumal & Ors. (1)the appellant had taken on lease, as in the present case,
an open land and the question was whether, when such land is being leased not
to be used for the purpose of residence in its condition of open land but to be
used for the purpose of residence after putting up structures thereon, the
letting of land can be said to be letting for residence. The leases there
mentioned that the lessee will construct buildings suitable for residential,
business, industrial or office purposes. It was held that the leases fell under
s. 6(1), and therefore, were within the ambit of Part II of the Act, and
consequently, the Small Causes Court at Bombay, as the Rent Court under the
Act, and not the ordinary civil court, had jurisdiction to try a suit for
possession. Thus, the question whether Part II of the Act applies to particular
premises or not depends on the purpose for which such premises are leased.
In the present case no difficulty arises,
for, cl. 8 of the lease in clear terms provides that the lessees were to be at
liberty at all times and from time to time to construct and erect upon any part
of the demised land buildings of every description howsoever. Though the lease
was in respect of open land except to the extent thereof on which the appellant
had built structures, the purpose for which it was demised clearly was for
constructing buildings of any description howsoever and not for constructing
buildings' for residence, education, business, trade or storage. The land thus
demised, though premises within the meaning of s. 5(8), was not premises
"let for residence, education, business, trade or storage" within the
meaning of s. 6(1), and therefore, s. 18(1) would not apply as was the case in
Mrs. Dossibai N.B. Jeejeebhoy v. Khemchand Gorumal & Ors.(1) where the open
land was let out for the purpose of putting up structures for residence.
Mr. Gokhale's contention, however, was that
s. 6(1) would apply because the expression "building of every description
howsoever" would include buildings for residence, and therefore, the
lessees were at liberty under cl. (8) of the lease to construct residential
buildings also. That may be so, but then the lessees may choose not to put up
any structure for any of the purposes set out in s. 6(1) in which case if Mr.
Gokhale were to be right Part II would still apply. That cannot possibly be the
meaning of s. 6 ( 1 ). Properly construed, s. 6(1) must mean that in order that
Part II (1)  3 S.C.R. 921. L 1 Sup. C 170--9.
122 may apply the premises in question must
be let out for the purposes of residence etc. and then only the leased premises
would be subject to and governed by the provisions of Part II. The application
of that part cannot have been intended to depend upon what a lessee may do or
may not do. It is the purpose of the lease and not only future choice of a
lessee which determines the application of Part II. That is the clear and
obvious meaning of the words "let for" in s.
The next argument of Mr. Gokhale was that
even though el. 8 uses the expression "building of every description
howsoever", the real purpose for which the lease was taken by the lessees
was to construct structures for residence.
In support of his argument he relied on cl.
2(c) of the lease which permits the lessees to take construction loans from
prospective tenants of the buildings to be erected by the lessees and urged
that since under s. 18 ( 3 ) the only construction loans permitted are for
financing the construction of residential buildings, the purpose of the lease
must necessarily be for erecting residential building or buildings only. This
argument also cannot be upheld, firstly, because the operation of el. 2(c)
relied on by Mr. Gokhale does not deal with nor is concerned with the purpose
for which the land was leased, and secondly,' because the question of taking
construction loans can arise only if the lessees were to decide to put up
building or buildings for residential purposes and not otherwise, as s. 18(3)
of the Act permits advances from tenants for constructing such buildings only.
C1. 2 (c) in the lease was put in the Indenture to provide for such a
contingency and as an exception to the covenant against the lessees mortgaging,
charging or assigning the demised land and/or the buildings which may be
erected thereon, and not for laying down the purpose for which the land was
demised. It is, therefore, neither right nor proper to construe the purpose of
a lease by depending upon such an exception to a covenant ,restricting the
lessees from mortgaging, charging or assigning the land or the buildings which
might be put up thereon. There is, therefore, no reason to hold that because s.
18(3) permits construction loans in respect of residential buildings only, it
must follow that the purpose of the lease must be held to be one for erecting
In the view that we take that the leased
premises are not premises contemplated by s. 6(1), and therefore, Part II of
the Act cannot apply, the second question decided by the High Court, namely,
that the advance amount of Rs. 10,000/- was not a payment falling under s.
18(1) would not arise.
For that reason, the third question also
which was in the further alternative need not be gone into.
123 In the result, the appeal is dismissed
with costs. The appellant will not be dispossessed of the premises in appeal
till November 28, 1969 when he shall hand over to the respondent quiet and
Y.P. Appeal dismissed.