D. N. Sanghavi & Sons Vs. Ambalal
Tribhuwan Das [1974] INSC 5 (9 January 1974)
DWIVEDI, S.N.
DWIVEDI, S.N.
GOSWAMI, P.K.
CITATION: 1974 AIR 1026 1974 SCR (3) 55 1974
SCC (1) 708
CITATOR INFO:
RF 1987 SC 857 (5) RF 1987 SC2199 (2) RF 1992
SC2166 (4)
ACT:
Madhya Pradesh Accommodation Control Act
1961, Sec. 12 (1) (f)--Its scope--The expression, 'His business'--Meaning of.
HEADNOTE:
The respondent is the owner of the suit
premises. The appellants 2 to 4 are carrying on the business in the name of the
first appellant, D. N. Sanghavi & Sons. They are tenants of the Respondent
and using a part of the premises as their residence. The respondent sued the
appellant for eviction on the ground that he needed the accommodation for
continuing "his business" within the meaning of S.12 (1) (f) of the
Madhya Pradesh Accommodation Control Act 1961. The questions for decision in
the case are as follows :-(i) What is the meaning of the phrase "his
business" in s. 12 (1) (f) and (ii) Whether in the circumstances of the
case, the busi- ness for which he required the accommodation could be said to
be "his business." The first question arose because he wanted the
accommodation for continuing the business of a partnership firm of which he was
one partner and the other two partners were his brothers.
The Trial Court held against the respondent
and dismissed the suit, but the appeal court reversed the judgment and decreed
the suit for ejectment of the appellants. On appeal, the High Court upheld the
judgment of the appeal Court and hence the appeal before this Court.
Allowing the appeal,
HELD : (1) The meaning of the expression
"his business" in s. 12 (1) (f) of the Madhya Pradesh Accommodation
Control Act 1961, is to be determined by examining the object of the Act and
the setting of the phrase "his business." (2) The direct and
immediate object of the Act is to ensure occupation of accommodation by them
who are in need of it.
Broadly speaking, a. construction which
fulfils this purpose should be preferred to the alternate construction which
frustrates it.
(3) A review of the provisions of the Act
would show that the Act is more strict with respect to the eviction of a tenant
from a nonresidential accommodation than from a residential accommodation. The
landlord cannot sue for eviction of a tenant from a non-residential
accommodation where he needs it for continuing or starting his major married
daughter's business or his brother's business.
Therefore, section 12 (1) (b) is protective
of the tenant and should not receive a wide construction as to the class of
persons who may be included in the possessive pronoun 'his' in the phrase 'his
business', for it would be against legislative policy.
(4) The words "for the purpose of
continuing or starting his business" in Sec. 12 (i) (f) should be
amplified to read as "for the purpose of his own occupation by way of
continuing or starting his business". This amplification is necessarily
implied. Therefore, it is necessary for the respondent to prove that the
accommodation is needed directly and substantially for his occupation for the
purpose of continuing or starting his business. From the evidence, it is not
clear whether the respondent was merely a sleeping partner or an active
partner. In absence of any proof that the accommodation is exclusively required
directly and substantially for his occupation for the purpose of continuing or
starting his business, the suit must fail.
Rajniklal and Co. v. Vithal Pandurang Kawade
and another, A. 1. R. 1952 Nagpur 312; Tansukhdas Chhaganlal v. Smt.
Shambai, A. 1. R. 1954 Nagpur 160,
Commissioner of Income- tax, West Bengal v. A. W. Figgies and Co., [1954]
S.C.R.
56 171, Dulichand Lakshminarayan v. The
Commissioner of Income- tax, Nagpur, [1956] S.C.R. 154, Karasandas Ramji v.
Karsanji Kalyanji, A.I.R. 1953 Saurashtra 113 and Gundalapalli Rangamannar
Chetty v. Desu Bangiah, A. I. R. 1954 Madras 182, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 1643 of 1967 Appeal by special leave from the judgment and Order dated 4th
September, 1967 of the Madhya Pradesh High Court (Indore Bench) at Indore in
Second Appeal No. 288 of 1967.
M. V. Phadke a if A. G. Ratnaparkhi, for the
appellants.
D . V. Patel A. T. M. Sampath, M. M. L.
Srivastava and E. C.,Agarwala, for the respondent.
The Judgment of the Court was delivered by
DWIVEDI, J. The facts of this case fall within a short compass. The respondent,
Amba Lal Tribhuwan Das, is the owner of the suit accommodation. It is situated
in Siyaganj, Indore. The appellants 2 to 4 are carrying on business in the name
of the first appellant, D. N. Singhavi aid S).13. They are the tennants of the
accommodation.
Courts below have held that it was being used
predominantly as a shop by them and that a part of it was being used by them as
their residence for the sake of more of efficient conduct of the business they
were carrying on in the shop.
The respondent purchased the shop some time
in 1953. The appellant were then carrying on their business in the shop.
They attorned to the respondent. On October
10, 1964 the respondent give the requisite notice to them to vacate. On
November 16, 1964 he instituted a suit for their ejectment from the
accommodation. It was alleged by him that he needed the accommodation for
continuing "his business" within the meaning of s. 12 (1) (f) of the
Madhya Pradesh Accommodation Control Act, 1961 (hereinafter called the Act). At
the evidence stage he gave evidence that it was needed for partnership
business. There arose two crucial questions in the case: (1) What is the meaning
of the phrase "his business" in s. 12(1)(f)? (2) Whether in the
circumstances of the case the business for which he required the accommodation
could be said to be "his business". The first question arose because
he wanted the accommodation for continuing the business of a partnership firm
of which he was one partner. There were two other partners. They are his
brothers. The trial court held against the respondent on the second issue and
dismissed the suit. No view was expressed on this issue. The respondent filed
an appeal from the judgment. The appeal court reversed the judgment and decreed
the suit for ejectment of the appellants. The appeal court recorded this
filling of fact........ Ambalal (plaintiff) has stated...... that the
partnership shop was previously run by his father. It is now run by the
brothers in partnership. This business is thus of the family alone.
Their shop? is at Siyaganj itself where the
premises in suit are situate." On this finding the appeal court reached
the conclusion that the business of the partnership firm, of which he is one
partner is "his business" 57 within the meaning of s. 12(1)(f). As
the firm's business was being carried on in a rented premises, his need was
found to be genuine. The appellants then filed an appeal in the Madhya Pradesh
High Court from the judgment of the appeal court. The High Court has upheld,
the judgment of the appeal court. It is noteworthy that the appeal court has
simply assumed that the partnership business is "his business". No
reasonings are given in support of the conclusion. The High Court agreed with
the appeal court that the firm's business of which the respondent was one
partner is "his business". The reasoning of the High Court in support
of this conclusion is summed up in the following passage in the judgment:
"In the present case what we are concerned with is whether the landlord
can be said to have the necessity when the need was for the partnership firm.
It cannot be doubted that when a person runs
a business in partnership with others he does it for himself and therefore his
necessity is identified with the necessity of the firm.
'Whether he wants to do business himself or
he does it along with others still remains that he needs it for his own
purpose." It is evident from this passage that the High Court, like the
appeal court, has overlooked the words of s. 12(1)(f) in arriving at its
conclusion. The High Court considered that it is an elementary proposition of
law that a partnership business is the business of each and every partner so
that it will be "his business." It seems that the High Court was
misled by the apparent meaning of this phrase so that the necessity of
examining the scheme of the Act and the setting of clause (f) of s. 12(1) to
discover its real meaning was not felt at all. But this is the first thing on
which the High court should have fixed attention. After all, it is a matter of
statutory construction. And in such a case all attempts at construction should
converge on the statute at hand, lest the reasoning should become abstract and
artificial, having no contact with reality. The High Court has ought support
from a decision of the erstwhile Nagpur High Court. (Rajniklal and Co. vs.
Vithal Pandurang Kawade and another)(1). Here again, the High Court did not take
care to Notice the similarities and dissimilarities between the law which fell
or consideration in that case and the law which falls for construction this
appeal.
With these preliminary comments, we pass on
to the real issue What does "his business" mean in s. 12(1)(f)? The
meaning is to be determined by examining the object of the Act and the setting
of the phrase "his business". The Act deals with the difficult
problem of scarcity of accommodation and seeks to distribute accommodation in a
fair way amongst those who need.
The Act professes to control letting and rent
of accommodation and the eviction of tenants therefrom. The Act restricts the
power of the landlord to let and to rack- rent at will. It also restricts his
power to eject the tenant at will. Thus the direct and immediate object of the
Act is to ensure occupation of accommodation by them who are in need of it.
Broadly speaking, a construction which fulfils this purpose should be preferred
to the alternative construction which furstrates it.
1.A.I.R. 1952 Nagpur 312.
58 Chapter III controls eviction of tenants.
Section 12 is the first provision in this Chapter. We are now reading the
material portions of s. 12 :
"Section 12(1)(e) : that the
accommodation let for residential purposes is required bonafide by the landlord
for occupation as a residence for-himself or for any member of his family, it
he is the owner thereof, or for an y person for whose benefit the accommodation
is held and that the landlord or such person has no other reasonably suitable
residential accommodation of his own in his occupation in the city or town
concerned (f) that the accommodation let for non- residential purposes is
required bonafide by the landlord for the purpose of continuing or starting his
business or that of any of his major sons or unmarried daughters if he is the
owner thereof or of any person for whose benefit the accommodation is held and
that the landlord or such person has no other reasonably suitable
non-residential accommodation of his own in his occupation in the city or town
concerned;
(4) where a landlord has acquired any
accommodation by transfer, no suit for the eviction of tenant shall be
maintainable under sub-s. (1) on the ground specified in clause (e) or clause
(f) thereof, unless a period of one year has elapsed from the date of the
acquisition.
(5) where an order for the eviction of a
tenant is made on the ground specified in clause (e) of sub-section (1), the
landlord shall not be entitled to obtain possession thereof before the expiration
of a period of two months from the date of the order.
(6) where an order for the eviction of a
tenant is made on the ground specified in cl.
(f) of sub-section (1), the landlord shall
not be entitled to obtain possession thereof- (a) before the expiration of a
period of two months from the date of the order : and (b) if the accommodation
is situated in ....
Indore.... unless the landlord pays to the
tenant such amount by way of compensation as may be equal to......
(i) double the amount of the annual standard
rent of the accommodation in the following cases:
(a) where the accommodation has for a period
of ten complete years immediately preceding the date on which the landlord
:files a suit for possession thereof, been used for business purposes or for
any other purpose along with such purposes, by the tenant who is being evicted.
59 (b) where during the aforesaid period of
ten years, the tenant carrying on any business in the accommodation has left it
and the tenant immediately succeeding has acquired the business of his
predecessor either through transfer or inheritance.
(ii) the amount of the annual standard rent
in other cases." Section 17 provides that where, after ejecting the
tenant, the landlord does not occupy the accommodation within two months of
obtaining possession, or transfers or relents it within two years thereof, the
rent Controlling Authority may, on an application made in this behalf by the
evicted tenant, direct the landlord to put him in possession of the
accommodation or to pay him such compensation as the Rent Controlling Authority
may think fit. This compensation shall be over and above the compensation which
has already been paid to the tenant under s. 12(6). In a similar way, section
18 provides that where the landlord has ejected the tenant for the purpose of
repairing of rebuilding the accommodation and does not commence the work of
repairing or rebuilding within one month of the date specified in the order for
ejectment or fails to complete the work in a reasonable time or having
completed the work fails to place the tenant in occupation of the
accommodation, the court may, on an application made in this behalf by the
tenant,.
direct the landlord to give possession to the
tenant or to pay to him such compensation as the court may think fit.
Section 39(1) requires the landlord to inform
the Collector whenever any accommodation has fallen vacant or is likely to fall
vacant The Collector may then direct him to let or not to let it in accordance
with the provisions of the Act.
Section 39(2) gives preference to certain
class of persons in the matter of letting. It is not necessary to mention them
here. But the first proviso to s. 39(2) is important for this case. It reads :
"Provided that if the landlord has in the information given...... under s.
(1) stated that he needs the accommodation for his own occupation, the
Collector..... shall, if satisfied after due inquiry that the accommodation so
needed is proper, direct the landlord to.. occupy the same under the proviso
the accommodation may be allotted to the landlord if he makes out a case that
he needs the accommodation for "his own occupation".
A review of these provisions would show that
the Act is more strict with respect to the eviction of tenant from a non-
residential accommodation than from a residential accommodation. In the case of
a residential accommodation, section 12(1) (e) provides for the eviction of a
tenant where it is needed for the residence of the landlord or for any member
of his family. But he cannot sue for eviction of a tenant from a
non-residential accommodation where he needs it for continuing or starting his
major married daughter's business. Nor he can evict a tenant from such
accommodation for continuing or starting his brother's business. Thus while 60
Cl. (e) of s. 12(1) is more hospitable to the landlord, cl.(f) thereof is more
protective of the tenant. Sub- section (4), (5) and (6) of s. 12 also point to
this contrast. While the tenant evicted from a residential accommodation gets a
respite of 14 months, the tenant evicted from a non-residential accommodation
gets not only the said respite but also the prescribed compensation. In many
cases the burden of compensation may act as a deterrent to eviction. Having
regard to the rigour of cl.(f) of s.
12(1) we think that the phrase “his
business" should not receive a wide, construction as to the class of
persons who may be included in the possessive pronoun 'his' in the phrase, for
it would be against legislative policy.
Section 39 controls the letting of an
accommodation, residential as well as non-residential, which has fallen vacant
or is likely to fall vacant. The first proviso to sub-section (2) of s. 39
provides that at the request of the landlord such accommodation may be allotted
to him if he needs it "for his own occupation." As section 39 deals
with a residential as well as a non-residential accommodation.
the expression "his own occupation"
in the first proviso should be amplified to read as "his own occupation by
way of residence or business". Clauses (e) and (f) of s. 12(1) are
complementary to the first proviso to s. 39(2). While the first proviso enables
the landlord to obtain possession of a vacant accommodation for his own
occupation by way of residence or business, section 12(1) (e) enables him to
obtain a residential by accommodation for his or his family's residence by
ejecting a tenant. Similarly, s.
12(1) (f) enables him to obtain a
nonresidential accommodation for continuing or starting "his
business" by ejecting the tenant. Considering the complimentary nature of
s. 12(1) (f), we have little doubt in our mind that the words "for the
purpose of continuing or starting his business" in the section should be
amplified to read as "for the purpose of his own occupation by way of
continuing or starting his business." It cannot be legitimately complained
that we are trying to redraft cl. (f). This amplification is necessarily
implied, for we think that the legislature intended to use the phrase "for
the purpose of continuing or starting his business." as a synonym for the
phrase "for his own occupation" in the first proviso to s. 39(2) as
explained earlier. The words "in his occupation" at the end of cl.
(f) fortify our construction. Again, the word "own" in the phrase
"his own occupation" should not be discarded as redundant. It seems
to us that the Legislature has deliberately used it to add emphasis to the
possessive force of the pronoun "his". (see the Shorter
Oxford-Dictionary, 3rd Edn. P. 1409) it connotes the idea that the accommodation
is needed directly and substantially for his occupation.
On this construction of cl. (f) of S. 12(1),
it is necessary for the respondent to prove that the accommodation is needed
directly and substantially for his occupation for the purpose of continuing or starting
his business.
The respondent has stated in his evidence
that he and his two brothers are carrying on a partnership business in a rented
shop in 61 Siyaganj. He has further said that he needs the suit accommodation
for that purpose. The appeal court has believed this evidence and has recorded
the finding that the respondent bonafide requires the accommodation for his
partnership business. But this finding does not fulfil the conditions of cl.
(f) of s. 12(1) as construed by us.
Unfortunately for him, the respondent did not
lead any evidence to show that the accommodation was needed directly and
substantially for his occupation by way of business. He filed the registration
certificate showing that the partnership was registered with the Registrar of
Firms. The certificate will only prove as to who are the partners of the firm.
nothing more The respondent did not file the deed of partnership' It would have
disclosed whether the respondent is a mere sleeping partner or a partner who is
entitled to manage the business either solely or with other partners, or that
they are the sole managing partners.
In his examination he has said that he was a
partner in the firm, He, has also said : "There is no proper accommodation
for carrying on business in Indore by the members of his family " In
Cross-examination he has said : "In the members of my family there are two
of my brothers Nand Kishore and Mani Lal their wives and children, and my
mother are included For our residence and running the shop we need the disputed
shop." No doubt he has stated that he needs the suit accommodation for his
residence also. but the lower courts did not examine the need for residence.
Before the appeal court counsel for the parties had stated that the suit for
eviction of the tenant should be disposed of only on the basis of ' s. 12(1)
(f). The respondent thus.
abandoned his case based on s. 12 (1) (e)
which deals with residential, accommodation. So we are concerned with his need
for business, accommodation. The passage in his statement, earlier reproduced
would seem to suggest that his notion of 'his business' is inclusive of his
brothers' business in which he may have no concern at all, So the possibility
of his brothers' separate business being set up in the suit accommodation is
not ruled out. However, we do not ground our judgment on this statement. In his
evidence he has said : "'Ale, the three brothers and father are the
partners in the shop. There is no person from outside.
Before the partnership my father used to run
the shop. (The father died during pendency of the suit)". He also said :
"We deal in bidi, cigarettes, matches,
tobacco and soap.,_ WC also want to have the same business in the disputed
shop." In_, neither of these two passages nor anywhere else in the evidence
he has stated that on the terms of partnership he, is entitled to manage, the
partnership business or even that he would also occupy the suit accommodation
along with his partners on obtaining possession from the appellants. He has
also not said that the other partners have agreed to shift the business.
if the deed of partnership I has excluded him
expressly or impliedly from the management of firm's business and has made him
a sleeping partner, it cannot be held that the accommodation is needed directly
and substantially for his occupation by way of business. Nor he has 62 power to
shift the business. To sum up, for the reasons already given, his suit should
fail.
Counsel have referred us to a large number of
decisions.
Such of them as appear to us to be relevant
in this case will alone be noticed by us. We shall make no reference to the
others.
In Rajniklal and Co. (supra) the decision
turned on the meaning of the phrase "business of his own" in cl.
13(3)(vi)(c) of the C.P. and Berar Letting of
Houses and Rent Control Order, 1947. The Nagpur High Court confined itself to
that single phrase and did not refer to the object and setting of the order. In
our case the conditions of s. 12(1)(f), as construed by us, are apparently
different from those of cl. 13(3)(vi)(c) of the order. So it is not helpful in
this case.
In Tansukhdas Chhaganlal vs. Smt. Shambai(1),
the Nagpur High Court has held that where a tenant carrying on business in the
demised shop converts the business into a partnership business and allows the
latter business to be carried on in the demised premises, it would amount to
sub- letting because the partnership "was clearly a personality in law
distinct from that of the petitioner himself" There also, the High Court
was concerned with cl. 13 of the aforesaid Order. This statement of law does
not appear to be universally true. However, as pointed out earlier, in respect
of Rajniklal (supra) it is sufficient for us to my that this case also is not
helpful in this appeal.
Commissioner of Income-tax, West Bengal vs.
A. W. Figgies and Co. (2) and Dulichand Lakshminarayan vs. The Commissioner of
Income-tax Nagpur(3) are concerned with the legal character of a firm in the
Income-tax Act. It is held that a firm is a distinct entity different from its
partners for purposes of assessment. These decisions are based on particular
provisions of that Act which are radically different from the provisions of the
Act. So these cases are also not helpful in deciding the present appeal.
Karsandas Ramji vs. Karsanji Kalyanji(4) and
Gundalapalli Rangamannar Chetty vs. Desu Rangiah(5) discuss the very question
which fell consideration in Tansukhdas Chhaganlal (supra). It was held on the
facts of these cases that the tenant could not be held to have sublet the rented
premises to the partnership firm because they retained possession over the
premises. These cases thus apply the test of occu- pation by the tenant in
finding out whether he has or has not sub-let. These are all the relevant
Indians cases cited before us. Sri Patel has also relied on three English
cases: (1) Clift. v. Taylor,(6) Tunstall v. Steigamann( 7) and Gian Singh &
Co. vs. Devraj Narar and Others. (8) Clift takes the same view as Rajniklal
(supra). The decision turned on the meaning of the expression "required
the premises for his own occupation" in s. 5(3)(b)(i) of the Landlord and
Tenant Act, 1927. There the landlord carried on a business in a part of the
building in (1) A.I.R. 1954 Nagpur 160.(2) [1954] S.C.R. 171.
(3) [1956] S.C. R. 154. (4) A.I.R. 1953
Saurashtra 113.
(5) A.I.R. 1954 Madras 182.(6) [1948] 2
A.E.R. 11 3.
(7) [1962] 2 A.E.R. 417.(8) [1965] 1 A.E.R.
768.
63 dispute; in another part of it the tenant
carried on her business. On the eve of the expiry of her lease, she applied for
a new lease. Her application was opposed by the landlord on the ground, inter
alia, that he required the premises for his own occupation. The facts found
were that he had converted his own business into a partnership business. There
were six partners including himself. The partnership business had extended
considerably so that there was scarcity of accommodation. It appeared that the
landlord needed the demised premises for the purpose of his partnership
business. So the issue was whether he needed the premises "for his own
occupation." The finding was: "The firm and he himself, as its senior
partner, had great need for less cramped .head office premises, and, in
particular, for the free and full use of the ground floor on street level as essential
to convenience of office work, for clients, and for display of notice etc., and
indeed, it was necessary for the prosperity of the greatly enlarged and still
growing business with its ramifications into many allied or compatible
departments or activities." It is evident from this finding that the
landlord was a managing partner and that he himself along with the firm was to
occupy the demised premises after getting possession. This decision, far from
helping Sri Patel, helps the appellants in view of the construction placed by
us on clause (f) of s.
12(1). Tunstall (supra) deals with an
entirely different set of facts. There the landlord was carrying on business.
She gave notice to the tenant that she wanted
the rented shop for her own business. The notice was given under the Landlord
and Tenant Act. 1954. In the meantime she transferred her business to an
incorporated company. The relevant words of s. 31(g) of that Act are : "to
occupy the holding for the purpose.... of the business to be carried on by the
landlord." It was held that the business of an incorporated company was
not the business of the landlord the company being a distinct legal person
different from the landlord. Gian Singh (supra) was concerned with the
construction of a particular clause in a covenant forbidding the tenant from
assigning his tenancy to a third person. It is claimed by the landlord that the
tenant has assigned the premises to a partnership firm of which he was a
partner.
On the facts of the case, it was held that
there was no assignment. We fail to appreciate how these cases help Sri Patel.
In some of the cases cited by Sri Patel,
'own' has been interpreted virtually as otiose. Nevertheless what it means in
the Act would depend on its own context, for a word may take a colour from its
context.
In view of our decision against the
respondent on the basis of the construction of s. 12(1)(f) it is not necessary
for us to decide several other points raised by Sri Phadke.
The appeal is allowed with costs (one set
only). The decision of the courts below are set aside and the suit of the
respondent is dismissed.
S.C.
Appeal allowed.
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