Laxmidas
Bapudas Darbar & Anr Vs. Smt. Rudravva & Ors [2001] Insc 423 (27 August 2001)
S.P.
Bharucha, Y.K. Sabharwal & Brijesh Kumar Brijesh Kumar, J.
The
question that directly falls for consideration in this appeal is whether or
not, a petition under Section 21 (1)(h) of the Karnataka Rent Control Act, for
eviction of a tenant under a contractual fixed term lease, would be
maintainable on the ground of reasonable and bona fide requirement of the
landlord. On certain occasions earlier, the question has been considered by
this Court as well as High Courts including Full Benches of the Karnataka High
Court but there does not seem to be a cohesion of views.
The
brief factual background giving rise to the point is that in the year 1905, the
mother and guardian of one Gurappa Channabasappa Belaguri, holding a power of
attorney, leased out his non-agricultural land to Anant Parashuram Nagaonkar
for a period of 99 years, to establish a factory. In the year 1907, the lessee Nagaonkar
aforesaid, assigned the lease in favour of Ramdas Vithaldas Darbar for a sum of
Rs.8,500/- The original parties to the agreements have all died and their heirs
have stepped into their shoes and they are parties to the present proceedings.
In the
year 1986 the lessors served a notice to the lessees calling upon them to
vacate the premises on the ground that the lessees did not pay rents for the
period 1.3.85 to 31.3.86 and that the property was also bona fide required for
their occupation. Reply to the notice is said to have been sent by the lessees
denying default in payment as alleged and asserted inter alia that the lessors
had no right to terminate the lease in view of the 99 years fixed term lease
under the agreement. Thereafter, however, the lessors filed an application
under Section 21(1)(h) and 21 (1)(p) of the Karnataka Rent Control Act 1961 on
the ground that the premises were bona fide required by them for starting their
own business.
The
lessees contested the petition on the ground that the fixed term lease was
subsisting which expires only on 29.2.2004. It was also pleaded that in fact it
was a perpetual lease which could not be terminated.
The
trial court, namely, the District Munsif allowed the petition and passed an
order dated 2.3.1990 for eviction of the lessees under clause (h) of
Sub-section (I) of Section 21 of the Act holding that it was not a permanent
lease and that Section 21 of the Karnataka Rent Control Act would be applicable
to the lease in question.
Both
parties preferred revision before the District Court, the lessors against part
of the order rejecting their petition under Clause (p) of Section 21(1) of the
Karnataka Rent Control Act whereas the lessees against the part of the order of
evicting them under Cl. (h) of sub- section (1) of Section 21 of the Act. The
learned District Judge held that it is a lease of permanent nature. Section 21
(1) of the Karnataka Rent Control Act therefore will not be applicable. The
order of the District Munsif was reversed except the part by which eviction
under Section 21 (1)(p) of the Act was refused.
The
respondent-lessors preferred a revision before the Honble High Court. It has
been allowed, holding that the Distt. Court erred in finding that the lease was
perpetual in nature. It is further observed that there cannot be any presumption
in favour of perpetual lease since there should be clear and unambiguous
language to infer such a lease. The provisions of the Karnataka Rent Control
Act have been held to be applicable, de hors the contract of lease and, the lessor
has been found to be entitled to move a petition for eviction of the lessee
under Section 21 (1)(h) of the Act, even before the expiry of fixed term of 99
years.
A
perusal of the judgment of the High Court indicates that one of the two
contentions raised before it was that the finding of the District Court,
holding that it was a perpetual lease is erroneous. According to the lessor,
the lease was for a fixed period of 99 years. Alternatively, the submission was
even if it was a permanent lease, provisions of Section 21 of the Karnataka
Rent Control Act would be applicable for seeking eviction of the lessee on the
basis of the provisions of the Statute. The High Court came to the conclusion
that lease in question is fixed term contractual lease of 99 years with option
of one renewal. It will however not be necessary, for us, to go into the
question relating to perpetual or non-perpetual nature of lease in view of
submission made on behalf of the appellant that their endeavour will be to show
that the Karnataka Rent Control Act would not apply even for termination of a
fixed term subsisting lease. Therefore, no submissions have been made before us
to show that the lease is a perpetual lease.
We
would, therefore, proceed to examine the other question relating to
applicability of Section 21 (1)(h) of the Karnataka Rent Control Act to a
subsisting fixed term contractual lease, as in the case in hand.
While
dealing with the aforesaid question, the High Court has relied upon a Full
Bench decision of the Karnataka High Court reported in AIR 1997 Karnataka 311
M/s. Bombay Tyres International Ltd. versus K.S. Prakash, where it has been
held that a proceeding for eviction under Section 21 of Karnataka Rent Control
Act would be maintainable notwithstanding the fact that the lease under which
tenant enjoys possession is an unexpired term lease.
The
relevant paragraph from the Full Bench decision aforesaid, is quoted below:
In
view of what is stated above, we are clearly of the opinion that the decision
of the Full Bench of this Court in Sri Ramakrishna Theatres case ILR (1992)
Kant 1296: (AIR 1993 Kant 90), is no longer good law in the light of the
decision of the Supreme Court in Sri Lakshmi Venkateswara Enterprises case ILR
(1994) Kant 1659. Accordingly, we hold that a landlord is entitled to an order
of eviction if he satisfies one or other conditions mentioned in S.21 of the
Karnataka Rent Control Act notwithstanding the fact that the lease under which
the tenant is in possession of the premises is for a term and that it has not
expired on the date when the application for eviction is filed." It is
clear that the Full Bench in Bombay Tyres (supra) followed the decision of this
Court in the case of Sri Lakshmi Venkateshwara Enterprises Pvt. Ltd.Versus Syeda
Vajhiunnissa Begum reported in ILR (1994) Karnataka 1659.
Sri Lakshmi
Venkateshwara Enterprises (supra) while holding that provisions of the Rent
Control Act would be applicable to a fixed term contractual lease relied upon a
decision reported in AIR 1979 S.C. 1745 Dhanapal Chettiar versus Yesodai Ammal
& Anr. It is further observed in M/s. Bombay Tyres that interpretation of Dhanapal
Chettiars case given by the Supreme Court in Sri Lakshmi Venkateshwara
Enterprises (supra) is binding on it. It will be beneficial to peruse Paragraph
15 of the judgment in M/s. Bombay Tyres which is quoted below:
It was
contended by the learned counsel for the tenants that the decision of the
Supreme Court in Dhanpal Chettiars case AIR 1979 S.C. 1745 is confined only to
a case of determination of a lease under S.106 of the T.P. Act and that the
principles cannot be extended to cases where a term is provided for in the
lease.
Learned
counsel also relied on various observations of the Supreme Court in the above
decision in support of his case. But we are afraid that we cannot accept the
contention of the learned counsel for the tenants. In Sri Lakshmi Venkateshwara
Enterprises case (ILR (1994) Karnataka 1659), the Supreme Court has considered
the very same decision and has stated that the above decision clearly holds
that the provisions of the Rent Control Act would apply notwithstanding the
contract. The effect of the decision in Dhanpal Chettiars case is stated by
their Lordships of the Supreme Court and we are bound by the same. This Court
cannot take a different view as to what was laid down in Dhanpal Chettiars
case. What is decided in Dhanpal Chettiars case is stated by their Lordships in
paragraph 11 of the Judgment of Sri Lakshmi Venkateshwara Enterprises case. It
is to the effect that the provisions of the Rent Control Act would apply de
hors the contract. When the Supreme Court has laid down the law to that effect,
this Court has necessarily to follow the same and we do so.
This
necessarily leads us to see and find out the proposition of law as laid down in
the case of Dhanapal Chettiar (Supra). It is a decision by a Bench of Seven
Judges. The facts being that the land-lady moved an application for eviction of
her tenant under the provisions of Tamil Nadu Rent Act on the ground of her
personal need.
The petition
was dismissed. On appeal, though her case of bona fide requirement was upheld
but eviction was refused due to lack of notice to quit in accordance with law.
The High Court dealing with the matter in revision, held that notice to quit
under Section 106 of the Transfer of Property Act was not necessary for seeking
an eviction of a tenant under the provisions of the Rent Act. The question
therefore, as was under consideration before this Court is mentioned in Para 1
of the judgment itself which is quoted below:- .as to whether in order to get a
decree or order for eviction against a tenant under any State Rent Control Act,
is it necessary to give a notice under Section 106 of the Transfer of Property
Act.
It has
been held that the purpose of giving a notice under Section 106 of the Transfer
of Property Act is only to terminate the contract of tenancy but it would not
be necessary if the tenant incurs the liability of eviction under the
provisions of the Statute. In such a case the notice under Section 106 of the
Transfer of Property Act would only be a formality and a surplusage and it need
not be given by way of any double protection to the tenant. It has been further
observed that even though tenancy may be terminated by giving a notice under
Section 106 of the Transfer of Property Act yet the landlord will not be in a
position to initiate the proceedings for eviction in absence of any liability
incurred by the tenant as provided in the Statute. Therefore, notice under
Section 106 of the Transfer of Property Act loses significance. In the end of Para 18 of the judgment it has been observed as follows:
.But
on the first assumption we have taken a different view of the matter and have
come to the conclusion that determination of a lease in accordance with the
Transfer of Property Act is unnecessary and a mere surplusage because the
landlord cannot get eviction of the tenant even after such determination. The
tenant continues to be so even thereafter.
That
being so, making out a case under the Rent Act for eviction of the tenant by
itself is sufficient and it is not obligatory to found the proceedings on the
basis of the determination of the lease by issue of notice in accordance with
Section 106 of the Transfer of Property Act:
It is
to be significantly noted that in Para 5 of the judgment in Dhanpal Chettiar
case, this Court while generally referring to the different provisions of the
Transfer of Property Act and the effect of the Rent Acts of different States
observed thus:
But in
all social legislations meant for the protection of the needy, not necessarily
the so-called weaker section of the society as is commonly and popularly
called, there is appreciable inroad on the freedom of contract and a person
becomes a tenant of a landlord even against his wishes on the allotment of a
particular premises to him by the authority concerned. Under Section 107 of the
Transfer of Property Act a lease of immovable property from year to year, or
for any term exceeding one year, or reserving a y early rent, can be made only
by a registered instrument. None of the State Rent Acts has abrogated or
affected this provision. (emphasis supplied) As a matter of fact the question
of curtailment of fixed term contractual lease was not involved in the case of Dhanapal
Chettiar (supra).
It has
no where been held that by virtue of the provisions of the Rent Act the
contract of term lease is completely obliterated in all respects. The effect of
Rent Act on tenancy under contract has been considered only to a limited extent
confining it to the necessity of giving notice under Section 106 of the
Transfer of Property Act.
Next
we may consider the decision in the case of Sri Lakshmi Venkateshwara
Enterprises (supra) It was a case relating to a term lease of 32 years. In
paragraph 5 it has been observed as follows:
This
Court in V. Dhanapal Chettiar v. Yesodai Ammal categorically laid down that
contractual tenancy will lose its significance in view of the Rent Control Act.
In that case, even the notice under Section 106 of the Transfer of Property Act
was held to be a surplusage. It is therefore urged that if a landlord could
found an action on any one of the enumerated grounds under Section 21 of the
Act, the action would be maintainable notwithstanding the existence of the
contractual lease.
The
above observations have been made by referring the decision in Dhanapal Chettiars
case (supra) without taking into account the context in which the Chettiars
case was decided. The Court then proceeds to consider Section 21 of the Act
which reads as under:
21.
Protection of tenants against eviction.- Notwithstanding anything contained in
any other law or contract, no order or decree for the recovery of possession of
any premises shall be made by any Court or other authority in favour of the
landlord against the tenant.
Provided
that the Court may on an application made to it , make an order for the
recovery of possession of a premises on one or more of the following grounds
only, namely:- .. (Emphasis supplied) On the basis of the above provision it
has been observed that anything contained to the contrary, in any contract
cannot be prevail.
It may
have to be scrutinized as to what extent the provisions of Section 21 of the
Karnataka Rent Act shall have an overriding effect over any other law or a
contract.
The
Rent Acts have primarily been made, if not wholly, to protect the interest of
tenants, to restrict charging of excessive rent and their rampant eviction at
will. In that view of the matter Section 21 of the Karnataka Rent Act provides
that notwithstanding anything to the contrary contained in any contract, no
order for eviction of a tenant shall be made by Court or any other authority.
Undoubtedly, it is a provision providing statutory protection to the tenants as
it is also evident from the heading of Sec.21 of the Act. This prohibition is
however relaxed under the Proviso saying that an order for recovery of
possession of the premises can be made on an application made on that behalf
only on the grounds as enumerated in clauses (a) to (p) to the Proviso. The non
obstante clause contained under Section 21 of the Act, will override any
condition in any contract which may provide a ground for eviction other than
those enumerated in Clauses (a) to (p) of Sub-section (1) of Section 21. Such
an additional ground in a contract shall be rendered ineffective. The use of
the word `only in the Proviso is significant to emphasise that it relates to
grounds alone which cannot be added over and above as provided.
The
whole contract or other conditions not related to eviction or grounds of
eviction shall not be affected. So far a fixed term lease is concerned, it
shall be affected only to the extent that even after expiry of period of the
lease the possession cannot be obtained by the lessor unless one or more of the
grounds contained in Section 21 of the Act are available for eviction of the
tenant. There is nothing to indicate nor it has been held in any case that in
view of Section 21 of the Karnataka Rent Act a contract of fixed term tenancy
stands obliterated in totality. As indicated in the earlier part of this
judgment in the case of Dhanapal Chettiar it has been observed in Paragraph 5
that none of the State Rent Acts have abrogated or affected the provisions of
Section 107 of the Transfer of Property Act which provides for lease of
immovable property from year to year or for a term more than a year or
reserving a yearly rent. As indicated earlier, the Proviso to sub-section (1)
of Section 21 of the Karnataka Rent Act limits the grounds on which landlord
can seek eviction of a tenant. Nothing has been indicated by reasons of which
it can be concluded that a contract of tenancy looses significance on coming
into force of the Karnataka Rent Act. The effect of non obstante clause, in our
view has been rightly explained in the Full Bench decision in the case of Sri
Ramakrishna Theatres Ltd. versus General Investments and Commercial Corporation
Ltd. & Ors. AIR 1993 Karnataka 90 In one of the decision of this Court
reported in 1989 (2) S.C.C. 686 Modern Hotel versus V.K. Radhakrishnaiah, it
has been held that period of a subsisting lease for fixed term could not be
curtailed in absence of a forfeiture clause in the lease.
The
effect of the non-obstante clause contained under Section 21 of the Karnataka
Rent Act on the fixed term contractual lease may be explained as follows:-
(i) On
expiry of period of the fixed term lease, the tenant would be liable for
eviction only on the grounds as enumerated in Clauses (a) to (p) of Sub-section
(1) of Section 21 of the Act.
(ii)
Any ground contained in the agreement of lease other than or in addition to the
grounds enumerated in Clauses (a) to (p) of Sub- section (1) of Section 21 of
the Act shall remain inoperative.
(iii)
Proceedings for eviction of a tenant under a fixed term contractual lease can
be initiated during subsistence or currency of the lease only on a ground as
may be enumerated in Clauses (a) to (p) of Sub-section (1) of Section 21 of the
Act and it is also provided as one of the grounds for forfeiture of the lease
rights in the lease deed, not otherwise.
(iv)
The period of fixed term lease is ensured and remains protected except in the
case indicated in preceding paragraph.
With
great respect therefore, in our view, the decision in the case of Dhanapal Chettiar
(supra) has not been correctly construed in the case of Sri Lakshmi Venkateshwara
Enterprises Pvt. Ltd. (supra) and it no more holds good nor the Full Bench
decision following it, in the case of Bombay Tyres International Ltd. (supra).
The earlier judgment of the full Bench of the High Court in the case of Sri
Ramakrishna Theatres Ltd.(supra) lays down the law correctly.
As a
result of the discussion held above, the impugned judgment of the High Court
cannot be sustained.
The
appeal is allowed and the judgment and order passed by the High Court is set
aside.
In the
facts and circumstances of the case, there would however be no order as to
costs.
-----------------------J.
(S.P. Bharucha)
-----------------------J.
(Y.K. Sabharwal)
----------------------J.
Back
Pages: 1 2