Bai Chanchal & Ors Vs. Syed
Jalaluddin & Ors  INSC 188 (11 September 1970)
11/09/1970 BHARGAVA, VISHISHTHA BHARGAVA,
VISHISHTHA SHAH, J.C.
CITATION: 1971 AIR 1081 1971 SCR (2) 171 1970
SCC (3) 124
Bombay Rent Restriction Act (16 of 1939), s.
4(2)(b)Lease of land giving lessee right to build houses and let outWhether
Code of Civil Procedure Act (5 of 1908), 0.
12, r. 6, 0. 23, r, 3 Passing more than one decree in the same suit Legality.
The predecessors in interest of the
respondents, leased certain land at an annual rent of Rs. 199, in 1895 for 49
years. The lease was a permissive one and gave right to the lessees to
construct houses and let them out or to use the land in any manner. The
original lessees, during the currency of the lease made transfers of their
rights and also granted subleases. A number of chawls and other buildings were
constructed on the land and were let out.
The respondents terminated the lease and sued
for recovery of possession in 1945. A compromise was entered into with the
appellants, who were some of the occupants, and a consent decree was passed on
8th July 1946. Another consent decree was passed against the remaining
defendants on 28th January 1949. Under the two decrees the defendants were allowed
to remain in possession for 5 years from the dates of the respective decrees
and they bad also to pay monthly mesne profits which worked out to more than
Rs. 7,000 per annum, and that amount was so fixed that the mesne profits due
for the 5 years were to be paid in 3 years. There was also a clause that in
case of default, the defaulting judgmentdebtors could be immediately called
upon to deliver possession In 1953, the respondents sought possession by
executing the consent decree dated 8th July 1946.
On the questions : (1) Whether the decree
contravened the provisions of the Bombay Rent Restriction Act, 1939, as the
leased land was 'premises' within the meaning of s. 4(2)(b) of that Act; (2)
whether the consent decree created a new tenancy which was protected by the
Bombay Rents, Hotel and Lodging House Rates Control Act, 1947; and (3) whether
the passing of two separate decrees was illegal as the court was not competent
to do so.
HELD : (1) 'Premises' is defined in s. 4(2)
(b) as any land let separately for the purpose of being used principally for
business or trade. The words 'business or trade' do not comprehend a lease
which is merely for constructing houses.
The terms of the lease, in the present case,
do not establish that the lease was taken principally for using the land for
'business or trade.' [174 CD ; 175 GH] The mere fact that there was a mention
in the pleadings that any structure that might have been erected would have to
be removed, would in no way lead to the conclusion that the principal purpose
of the lease was to build structures and that the structures should be utilised
for being let out on rent and thus constitute business or trade. Therefore tile
decree did not contravene the provisions of the Bombay Rent Restriction Act.
[174 FG; 175 DE; 176 A] 172 (2)On the face of it, all that the consent decree
envisaged was that though the judgmentdebtors were liable to immediate
eviction, the decree holders agreed to let them continue in possession for a
period of 5 years, and, since the concession was granted as a special case, the
decree holders insisted on payment of mesne profits at a much higher rate. The
terms of the consent decree could in no way be interpreted as creating a new
tenancy constituting the decreeholders as landlords and the judgment debtors as
their tenants. [176 CE, FG] (3)Order 23, r. 3 and 0. 12, r. 6 of the Civil
Procedure Code envisage that in the same suit there can be more than one decree
passed at different stages [177 DF]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1460 of 1969.
Appeal by special leave from the judgment and
decree dated January 16, 1969 of the Gujarat High Court in Letters Patent
Appeal No. 31 of 1966.
S.T. Desai, M. H. Chhatrapati, P. N. Tiwari
and O. C. Mathur, for the appellants.
D. Y. Patel and I. N. Shroff, for respondents
Nos. 1 and 3.
R. H. Dhebar, B. Datta and S. P. Nayar, for
respondent No. 2.
The Judgment of the Court was delivered by
Bhargava, J. The predecessorsininterest of plaintiff respondents 1 to 3 gave,
in 1895, land, bearing Serial Nos.
503 and 506 of Asarva within the limits of
Ahmadabad Municipal Corporation, on lease for a period of 49 years at an annual
rent of Rs. 199/, to three persons, Shri Ramchandra Ambaram, Pardesi Sukhlal
Anandram and MehtaBogha Mugatram. These original lessees, during the currency
of the lease, made transfers of their rights and also granted subleases. A
number of chawls and some other buildings were constructed on the land and some
of them were let out on rent. In 1945, the lessors, after serving notice on the
occupants to give vacant possession, filed a suit for recovery of possession.
The suit was decreed on 8th July, 1946 on the basis of a consent decree as
against some of the occupants including the four defendantappellants. In the
agreement, on the basis of which the decree was passed, it was agreed that the
defendant appellants will continue in possession of the property for a period
of five years and will hand over possession after the expiry of this period of
five years. For this period, they undertook to pay mesne profits every month at
various rates on the lands in their possession. Between them, the four
appellants were required to pay @ Rs. 227100 per mensem making up an annual
amount of mesne profits of Rs. 2,73180. Similar terms were included 173 in the
consent decree against other defendants who joined the compromise on the basis
of which the decree was passed on 8th July, 1946. The remaining defendants in
the suit entered into a later compromise and,, as a result, another consent
decree was passed on' 28th January, 1949 against those defendants. Under this
decree, these remaining defendants were also entitled to continue in,
possession for a period of five years from the date of the decree, but were
required to pay mesne profits for this period. All the defendants governed by
the two decrees dated 8th July, 1946 and28th January, 1949, had to pay between
them mesne profits monthly which worked out to an amount of Rs. 7,31480 per
annum. Before, the expiry of the period of five years prescribed by either of
the two decrees, the Custodian of Evacuee Property, in 1950, took possession of
all the properties, as one of the decreeholders had become an evacuee. After
the property was released by the Custodian of Evacuee Property, an application
was filed by the decree holders on 26th March, 1953 for execution of the
consent decree dated 8th July, 1946 and, in that execution, possession was
sought against the appellants of the property which was in .their possession.
Subsequently, a number of suits were filed for recovery of mesne profits also.
The Execution Court directed eviction of the appellants after overruling the
various objections' raised by them in the execution proceedings. The decision
of the Execution Court on the objections taken by the appellants was challenged
in appeal before the District Judge, in second appeal before a single Judge of
the High Court of Gujarat, and by a Letters Patent appeal before a Division
Bench. All the Courts rejected the objective raised by the appellants and
upheld the order of the Execution Court directing delivery of possession. It is
against the judgment of the Division Bench in Letters Patent appeal in this
execution that the appellants have come up to this Court in this appeal by special
It is unnecessary for us to mention all the
various objections that were taken at various stages by the appellants in the
Execution Court, in the Court of the District Judge, or before the single Judge
or the Division Bench in the High Court. Only three of the points raised have
been urged before us and, therefore, we are called upon to deal with these
three points only.
The first point raised is that the decree
which was passed on 8th July, 1946 was a nullity, because it was passed in
contravention of section 11 ( 1 ) of the Bombay Rent Restriction Act No. XVI of
1939 (hereinafter referred to as "the Act"). This objection has been
overruled by the High Court on the ground that the provisions of the Act were
not attracted by the lease in question on the expiry of which the suit for
ejectment was decreed under the 174 consent decree dated 8th July, 1946.
Counsel appearing for the appellants urged that the terms of the decree passed
as well as the terms contained in the leasedeed of 1895 show that the Act was
applicable because the land, to which the suit for ejectment related, was
covered by the definition of "premises" to which the Act applies. The
expression "premises" is defined in section 4(2) of the Act as
meaning (a) any building or part of a building let separately for any purpose
whatever, including any land let therewith, or, (b) any land let separately for
the purpose of being used principally for business or trade.
Admittedly, the lease of 1895 was not in
respect of any building or part of a building let separately for any purpose
whatever. Reliance was placed on section 4 (2) (b) of the Act on the contention
that the land had been let for the purpose of being used principally for
business or trade.
Having gone through the documents relied upon
by counsel for the appellants, we are unable to accept this submission. In the
plaint of the suit, as well as in the decree dated 8th July, 1946, there is no
mention of the purpose for which the land was let out by the lease of 1895.
Reliance was,, however, placed on one of the pleadings in the plaint which had
been reproduced in the decree in which the plaintiff respondents recited one of
the terms of the lease in the following words : "On the expiry of the
period of 49 years, the land shall be handed over without raising any dispute
or objection or causing any obstruction, after removing whatever structures
that might have been erected thereon and after making it as clear as it
is." The argument was that this pleading indicates that the land was let
out for making structures and those structures could only be utilised by being
let out on rent. This purpose would constitute business or trade. We are unable
to see any justification for such an inference. The mere fact that there was a
mention that structures that might have been erected will be removed can in no
way lead to a reasonable conclusion that the principal purpose of the lease was
the use of the land for business or trade.
Reference, in this connection, was also made
to the terms of the lease of 1895; but we are unable to hold that it
establishes the case of the appellants that the lease was taken principally for
the purpose of using the land for business or trade. All that the lease
mentions is that it is for constructing houses and, at a later stage, 175 there
is a mention that "in the said fields, the lessees could construct houses
in any manner or use it in any manner." The other parts of the lease, on
which reliance has been placed are as follows : 1.On the land of those fields
we can build houses in any manner and we will receive income thereof and you
will not raise any dispute or obstruction in respect thereof. We can spend any
amount on the construction of those houses which we will not demand from you
for whatever reason nor we will have the right to deduct from rent payable to
2.If any houses are constructed thereon, we
will remove the superstructures. If we do not remove the structures then you
will be the owners of the said structures. If you take them, then we and our
heirs and representatives will not object." We are unable to find even in
these quotations from the lease any mention that the land is going to be used
principally for the purpose of business or trade. The lease does mention that
it was being taken for constructing houses. 'Mere was no mention at all,
however, of the manner in which the constructed houses were to be utilised.
Further, there is a clear option given to the
lessees that they could us,, the land in any manner if they did not construct
any houses. These are terms on the basis of which it cannot be said that the
land was being let out for business purposes.
The submission of counsel for the appellants
was that, if the purpose was to construct houses and let them out on rent, that
would constitute the use of the land for the purpose of business inasmuch as
the lessees would be earning income from letting out those houses. We are
unable to accept this submission, because we do not think that the word
"business' or "trade" used in the definition of "premises"
in section 4 (2) (b) of the Act comprehends within it a lease which is merely
for constructing houses.
Learned counsel cited before us a number of
decisions of Indian and English Courts, including decisions of the Privy
Council and this Court,, in which the scope of the word "business"
was interpreted. That interpretation was given in connection with the word
"business" as used either in incometax law or in the terms of a
covenant or the Companies Act, etc. We do not consider that it will be at all
profitable to refer to them when interpreting the word "business" or
"trade" as used in section 4(2) (b) of the Act, because none of those
interpretations will cover a case similar to the one before us, where the lease
was merely a permissive one giving a right to the lessees to construct houses
and let them out or to use the land in any manner.
When the purpose of the lease 176 was
expressed in this way, it is impossible to hold that the principal use, to
which the land was to be put by the lessees, was business or trade. As a
consequence of this interpretation, it has to be held that the Act was not
applicable to the lease of 1895 and, therefore, no question arises of the
decree of 8th July, 1946 being invalid on the ground of contravening section 11
( 1 ) of the Act.
The second point urged by learned counsel was
that, by the consent decree itself, a new tenancy was created which was to
continue for five years and, in the, meantime, the Bombay Rents Hotel &
Lodging House Rates Control Act, 1947 came into force and the appellants were
protected from ejectment under the provisions of that Act. The consent decree
does not state that a new tenancy is being created. The argument was that the
terms of that consent decree should be interpreted as indicating an intention
to create a new tenancy.' We are unable to find any such terms. On the face of
it, all that the, consent decree envisaged was that, though the judgmentdebtors
were liable to immediate eviction, the decreeholders agreed to let them
continue in possession for a period of five years. Since this concession was
being granted as a special case, the decree holders insisted that mesne profits
should be paid at a much higher rate so much so that between all the
defendants, governed by the two decrees of 8th July, 1946 and 28th January,
1949, the amount payable as mesne profits became Rs. 7,31480 per annum which
had no relation with the original rent of Rs. 199/ per annum for the entire
land fixed by the lease of 1895" In fact the decreeholders sought further protection
by requiring the judgmentdebtors to pay the mesne profits in monthly installments,
and the installments were so fixed that the mesne profits due for five years
were to be paid within a period of three years.
There was the further clause that, in case of
default of payment of the mesne profits, the defaulting judgment debtors could
be immediately called upon to deliver possession. These terms can, in no way,
be interpreted as creating a new tenancy constituting the decreeholders as
landlords and the judgment debtors as their tenants. The terms of the consent
decree neither constituted a tenancy nor a licence. All that the decreeholders
did was to allow the judgmentdebtors to continue in possession for five years
on payment of mesne profits as a concession for entering into a compromise. The
argument advanced must, therefore, be rejected.
Reference was made by learned counsel for the
appellants, in support of his argument, to a decision of the Bombay High Court
in Gurupadappa, Shivlingappa Itgi v. Sayad Akbar Sayad Budan Kadri(1), but that
case, in our opinion, has no application. In (1) 52 B.L.R. 143.
177 that case, in the consent decree itself,
the first clause was that the defendant admits that he is a monthly tenant of
the plaintiff and is to continue in possession till January 31, 1948. This
clause specifically and clearly, in the language used, made it manifest that
the defendant was a monthly tenant and was to continue in that capacity in
possession. It was in these circumstances that it was held that a new tenancy
had been created from the date of the consent decree. In the case before us,
the terms of the consent decree are in no way comparable with the terms used in
the consent decree in that case. The language used in the consent decree in the
present case contains no indication of any intention to create a tenancy, so
that the Bombay Rent Control, Act. 1947 could never apply to the case of the
The third point raised by learned counsel was
that, since there was one single suit based on the lease of 1895 for ejectment
of persons in possession, there could be only one single decree in that suit
and the Court was incompetent to pass two separate decrees on 8th July, 1946 and 28th January, 1949. Counsel, in this connection, relied on the
provisions of rules 1 and 12 of Order XX of the Code of Civil Procedure which
relate to the pronouncement of judgment and the Court passing a decree in a
suit. These rules have really no relevance. On the other hand, rule 3 of Order
XXIII, C.P.C., clearly envisages a decree being passed in respect of part of
the subject matter of the suit on a compromise, and rule 6 of Order XII,
C.P.C., permits the passing of a judgment at any stage without waiting for
determination of other questions. Thus, it is clear that, in the same suit,
there can be more than one decree passed at different stages. In the present
case, the first decree of 8th July, 1946, was based on a compromise between the
plaintiffs and some of the defendants, while the second decree dated 28th
January, 1949 decided the rights of the remaining defendants. Th., two decrees
were separate and independent and neither of them could be treated as a
In these circumstances, the Execution Court
was right in rejecting all the objections raised by the appellants and in
directing delivery of possession. The appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.