P.
John Chandy and Company (P) Ltd. Vs. John P. Thomas [2002] Insc 230 (29 April 2002)
D.P.
Mohhapatra & Brijesh Kumar Brijesh Kumar, J.
Leave
granted.
The
appellant in this appeal has impugned the judgment and order dated 26.6.2001
passed by the Kerala high Court, allowing the civil revision preferred by the
respondent-landlord, setting aside the appellate order and holding that the
Rent Controller was justified in passing an order of eviction of the
tenant-appellant under Section 11 (4) (i) of the Kerala Buildings (Lease And
Rent Control) Act 1965.
The
facts which do not admit of dispute are that the accommodation in question
originally belonged to the grand father of the present respondent, who died in
the year 1953. It came down to the father of the respondent who also died some
time 1976. The property ultimately came to the respondent. In the year 1949 Shri
P. George, grand father of the respondent rented out the premises to the
appellant-company which was sub-let to different sub- tenants from time to time.
The respondent gave notice to the appellant on 17.11.1981 to terminate the
sub-lease arrangements but the tenant failed to comply with the notice.
Ultimately John P. Thomas-respondent filed RCP No.16 of 1982 in the Court of
Rent Controller. Kottayam.
The
eviction was sought on the ground that the appellant- tenant had transferred
his rights creating sub-leases in favour of several persons without the consent
of the landlord. One of the sub-tenants had even been running a printing press
in the premises whereas according to the case of the landlord the premises were
let out to the appellant for its use as an office and godown. The petition was
contested but the fact of sub-letting was not denied. On the other hand, it was
pleaded that one sub- lease was created initially in 1949 itself when the
premises were taken by the appellant on rent which fact was within the
knowledge of the grand father and the father of the respondent as well as that
of the present respondent. Admittedly, a few more sub-leases were created in
1970s. Nobody ever objected to the same. It could thus well be presumed that
the landlord had consented to the sub-letting which was within their knowledge.
There does not seem to be any document of lease. The appellant also produced
one CPW2 in evidence who had been one of the Directors of the appellant Co. from 1946 to 1960. According to him negotiations of
rental arrangement took place in his presence and the arrangement of letting
included sub- letting as well.
The
Rent Controller on consideration of the evidence adduced by the parties as well
as other material on the record came to the conclusion that there has not been
any positive conferment of right upon the appellant to sub-let or transfer the
rights under the lease.
While
appreciating the evidence the trial court observed that in so far the evidence
of CPW2 is concerned, in cross-examination he has stated that there was no
document of lease and had no knowledge whether any decision was taken by the
Board of Directors of the Company in regard to the tenancy or the terms
thereof.
He
also stated that terms of rental arrangement were not discussed and there was
no evidence on record which may have been kept in the records of the company
regarding the same nor he remembered what happened in 1949. The trial court
considering other parts of his statement as well found that his evidence was
unworthy of credence and that of an interested person and observed
"therefore I dis-believe CPW2 and render his evidence as unreliable".
The petition thus filed by the respondent landlord was allowed holding that
there was no consent of the landlord for sub-tenancies created by the
appellant.
The
tenant filed an appeal before the Rent Control Appellate Authority, Kottayam.
The appeal was allowed by order dated February 21, 1992. The appellate court recorded a
finding to the effect "in the absence of any evidence either oral or
documentary the terms of tenancy have to be gathered from the long course of
conduct of the parties ever since commencement of the tenancy in 1949".
The appellate court considering the facts and circumstances that the sub-lease
was coming down since long within the knowledge of the landlord and they having
never raised any objection, by their conduct it could be inferred that the landlord
had consented to the sub-letting. The appellate court then also referred to the
statement of CPW2 who was formerly one of the Directors of the appellant
company and was related to the parties and according to whom the rent
arrangement was made in his presence which enabled the tenant-appellant to
sub-let the premises. The appellate court ultimately held that having regard to
the long course of conduct of parties it was satisfied that contract of tenancy
allowed sub-letting by the tenant. It further observed "even assuming that
there was specific stipulation in the contract of tenancy prohibiting
sub-letting, the landlord by acceptance of rent must be deemed to have waived
his right to claim eviction on the ground of sub-letting" Aggrieved by the
order passed by the appellate authority the respondent preferred a revision
under Section 20 of the Kerala Buildings (Lease And Rent Control) Act 1965. The
revision was allowed as indicated earlier holding that the sub-leases were
created in contravention of Section 11 (4)(i) of the Act. The revisional court
found that the tenant failed to establish that in terms of lease they were
entitled to sub-let the accommodation. Mere inaction or failure on the part of
the landlord to initiate any action in the matter would not amount to
conferment of right on the tenant under the lease to sub-let nor waiver of the
right of the landlord to get the premises vacated could be inferred.
Dealing
first with the point of lease arrangement in 1949 with consent to sub-let, it
may be noticed that it is principally based on the oral evidence of CPW2.
Undisputedly
there is no written lease deed nor conditions of lease have been reduced in
writing. According to CPW2 he had been the Director of the appellant-company
during the period starting from 1946 to 1960. He was making the statement
obviously more than 30 years of the lease arrangement with the appellant in
1949. We find that the trial court has considered and appraised the whole
statement of CPW2 including his cross-examination on the basis of which the
trial court recorded its finding that his statement was unworthy of credence
and it could not be clearly made out from his statement that consent for
sub-letting was accorded to the tenant. The statement of CPW2 has been annexed
along with the counter-affidavit filed by the respondent. The learned appellate
authority tried to place reliance on the statement of CPW2 merely referring to
a part of his statement in examination-in- chief. For proper appraisal of
evidence, a Court must consider the whole statement. Cross-examination
constitutes an important part of the statement of a witness and whatever is
stated in the examination-in-chief, stands tested by the cross-examination. The
trial court in its judgment has referred to specific parts of the statement of
SPW2 in cross-examination. Such a finding recorded after appraisal of the whole
statement would not be negated by the appellate court without recording cogent
reasons for doing so. The finding of the appellate court about the statement of
CPW2, basing it on picking some part of the statement, ignoring the rest of it,
cannot be treated to be a valid finding. It may rather amount to misreading of
the statement or basing a finding ignoring the major and more important part of
the statement. Such a finding is vitiated in law and therefore not sustainable
at all. In our view the High Court has rightly ignored it and acted according
to the finding recorded by the trial court. The learned counsel for the
respondent has referred to a case reported in (1999) 5 SCC. 645Ubaiba versus. Damodaran
where it has been held that even though revisional power under Section 20 of
the Kerala Buildings (Lease and Rent Control) Act 1965 may be wider than that
under Section 115 CPC but it does not entitle the court to re-appreciate the
evidence and substitute its own conclusion in place of the appellate authority.
The proposition of law as laid down in the above-noted decision cannot be in
dispute but in the present case we find that the trial court had recorded its finding
after appraisal of whole statement including the cross-examination of the
witness whereas the appellate court took a different view ignoring the major
part of the statement of the witness, particularly made in the cross-
examination which was specifically referred to by the trial court in its order.
Such a finding as recorded by the appellate court certainly leans to be a
perverse finding.
The
decision in the case of Ubaiba (supra) would be of no help to the appellant on
the facts of the present case.
Yet
another fact which attracts the attention of the Court is that CPW2 had made
the statement about sub- letting some time in the year 1949. It will have no
bearing on the merits of the present case. The Kerala Buildings (Lease and Rent
Control) Act 1965 came into force in the year 1965. Sub-tenancies have also
been created, after coming into force of the Act, in the years 1971, 1972 and
1974. There is no statement of CPW2 in respect of these sub-tenancies. He could
not say anything about the terms of sub-lease arrangement. In this background
perhaps more stress has been on the point of implied consent based on inference
drawn from the conduct of the parties. According to the appellate court the
implied consent of the landlord for sub-letting would be inferable on account
of the fact that there has been inaction on the part of the landlord for a very
long time and they raised no objection whatsoever in the last 32 years against
the sub-tenancy created by the tenant- appellant. Yet another circumstance relied
upon against the landlord is that he had been accepting the rent all the time
even though having knowledge of the sub-tenancy.
Therefore,
implied consent on the part of the landlord is legally inferable and the
landlord would be taken to have waived his right to take any action in the
matter for evicting the tenant.
The
finding of the appellate court which has not been accepted by the High Court
takes us to consider the point of implied consent due to inaction on the part
of the landlord to take any steps for eviction of the tenant.
Before
considering the relevant provision so as to have proper appreciation of the
point, it is observed that drawing inference from the facts established, is not
purely a question of fact. It is always considered to be a point of law in so
far it relates to inferences to be drawn from the finding of fact. Finding of
the fact in the present case is that after the lease was given to the appellant
in the year 1949 sub-tenancies had been created apart from in the year 1949
itself, in the years 1965, 1971, 1972 and 1974. So as to have a clear factual
position it may be indicated that liability of the tenant to hand-over
possession on account of sub-letting, to the landlord, came into existence by
virtue of Section11 (4) (i) of the Kerala Buildings (Lease and Rent Control)
Act 1965. Therefore, for the purposes of the above said provision sub-tenancies
created before the enforcement of the Act may not have any relevance. The
tenancy is created after 1965 in the years 1971, 1972 and 1974 would clearly be
subject-matter of incurring the liability of the tenant to hand over the
possession to the landlord.
In
this context the observations made by the appellate court that no objection was
taken by the landlord for the last 32 years is not correct. The respondent had
served a notice on the appellant-tenant in 1981 which is a period of 10 years
from 1971 and 7 years from 1974. It is in so far factual position and finding
of inaction for 32 years on the part of the landlord is concerned.
We may
now turn to the question of implied consent in the background of the relevant
provision.
Section
11 (4) (i) of the Kerala Buildings (Lease and Rent Control) Act 1965 reads as
under:
11 (4
(i). A landlord may apply to the Rent Control Court for an order directing the tenant to put the landlord in
possession of the building,
(i) if
the tenant after the commencement of this Act, without the consent of the
landlord, transfers his right under the lease or sub-lets the entire building
or any portion thereof if the lease does not confer on him any right to do so;
Provided.."
A perusal of the relevant provision as quoted above clearly indicates that the
landlord can claim possession of the building from the tenant in case of
sub-letting by the tenant without the consent of the landlord, in case the
lease does not confer on the tenant a right to sub-let. The provision provides
for "conferment" of right on the tenant to sub-let the accommodation.
That is to say, so as to be entitled to sub-let, the tenant must be granted
that right to do so, by the landlord. The expression `confer' is pointer to
something done overtly and explicitly. The meaning of the word `confer' as
indicated in the Law Lexicon by P. Ramanatha Aiyar 2nd Ed.Reprint 2000 at Page
381 means "to give". "Conferring is an act of
authority--------men in power confer". It is therefore clear that the
conferring indicates some positive action in giving something, may be some
right or privilege to another person. It is in this background that the word
`consent' as occurring in clause (I) of sub-s.(4) of Section 11 of the Kerala
Buildings (Lease and Rent Control) Act 1965 is to be seen. According to the
said provision if the lease does not "confer" a right on the tenant
to sub-let, he cannot do so without the consent of the landlord. If he does so
after coming into force of the Act, he would be liable to be evicted and the
possession be given to the landlord. On reading of the whole provision
proposition of implied consent, in such cases, would not be readily acceptable.
The consent of the landlord should be in a positive way, clear cut and without
ambiguity since otherwise right to sub-let is only to be conferred on the
tenant by the landlord in the lease itself. It can reasonably be expected that
a right which is otherwise to be conferred by having such a condition in the
lease itself, consent, in absence thereof, preferably be in writing and in case
it is not so, it is to be clear cut without any ambiguity or shadow of doubt.
The conduct of the landlord which has been mainly taken into account on the
point of implied consent is his inaction for a long time despite the knowledge
of the fact of sub- letting by the tenant to other persons. The period of 32
years as indicated by the appellate authority is incorrect as discussed
earlier. Nonetheless it can be said that there has been inaction on the part of
the landlord for some years if not 32 years. But inaction in every case does
not necessarily lead to an inference of implied consent or acquiescence. In
this connection we may refer to Words and Phrases Legally Defined Vol.1 Third
Ed. Page 27 where we may first see what has been said about Acquiescence. It is
as follows:
"Mere
inactivity on the part of a defendant is not to be construed as acquiescence in
delay by the plaintiff. "sleeping dogs, in the form of sleeping
plaintiffs, need not be aroused by defendants from their slumbers" (per Roskill
LJ in Compagnie Francaise de Television v. Thorn Consumer Electronics Ltd.
[[1978] RCP 735 at 739]); Bremer Vulkan Schiffbau und Maschinenfabrik v. South
India Shipping Corporation [1979] 3 All ER 194 at 198, per Donaldson J."
It may also answer the observation of the appellate court that the landlord by
inaction is to be taken to have waived his right to take any action against the
tenant.
A
distinction has also been drawn between `Acquiescence' and `Consent'. It is in
relation to a dispute between a landlord and a tenant and we again refer to
Words and Phrases Legally Defined Vol.1 Third Ed. Page 314 "[The Landlord
and Tenant Act 1954, S.23(4) is concerned with a situation where an immediate
landlord or his predecessor in title has `consented' to a breach of covenant,
or the immediate landlord has acquiesced in it.] `I agree..that in the context
of Section 23(4) of the Act, whatever consent or acquiescence may mean in
different contexts, in that context 'consent' is put in plain antithesis to
'acquiescence', and that, therefore, if something falls within the description
'acquiescence', it is not consent.
The
difference which is pointed out between the two in this context is that
'consent' involves some affirmative acceptance, not merely a standing by and
absence of objection. The affirmative acceptance may be in wiring, which is the
clearest obviously; it may be oral; it may conceivably even be by conduct, such
as nodding the head in a specific way in response to an express request for
consent.
But it
must be something more than merely standing by and not objecting. `Bell v
Alfred Franks & Bartlett Co. Ltd. [1980] 1 All ER 356 at 362. C.A. per Megaw
LJ." The above observations though no doubt made in reference to
particular provision, yet they throw some light on the question of implied
consent that there has to be something more than mere inaction or lack of
initiative on the part of the landlord. In context with the above, we find our
view reinforced on the meaning and import of the word `consent' as used in Cl.(i),
sub.s.(4) of Section 11 of the Act when read in the background of the word
`confer' in the latter part it will only mean that consent has to be with some
positive action on the part of the landlord so that the tenant can be said to
have had the authority to sub-lease his lease rights. Mere silence may not be
enough.
Learned
counsel for the respondent has placed reliance upon a decision of this court
reported in AIR 1988 S.C. 852 Hiralal Kapur versus Prabhu Choudhury. The tenant
in this case seems to have sub- let a part of his tenancy to a Trust which
started its activities from the premises of which landlord may also have been
aware. The tenant had also started paying the rent by two cheques one in his
name and another cheque of the Trust. The rent so tendered was duly accepted by
the landlord. In some correspondence which took place between the tenant and
the landlord, the Trust was not accepted as a sub-tenant. It was held by this
Court that merely by the fact that the cheque of the Trust was being accepted
as a part of the amount of rent and the fact that landlord may have the
knowledge of the fact that the Trust was using part of the premises would not
lead to any implied inference or consent of sub-lease in favour of the
sub-tenant. For this conclusion no doubt the letters of the landlord had also
been referred to by which sub-tenancy was not accepted by the landlord yet the
fact remains that Court did not come to the conclusion that that before writing
of those letters it was to be taken a case of sub-tenancy by conduct. The fact
is that knowledge of possession or a part of the accommodation with the Trust
and the acceptance of the part of the rent by cheque from the Trust were not
considered conclusive of an inference of consent for sub- tenancy. Yet another
case relied upon by the learned counsel for the respondent is reported in AIR
1996 S.C. 2361 equivalent to 1996 (11) SCC 728- Ram Saran versus Pyare Lal and
another. In this case also the tenant surrendered his tenancy rights in favour
of a registered Society without consent of the landlord. The landlord had also
started accepting the rent tendered by the tenant in the name of the registered
society. It was held that no inference of authorised sub-tenancy could be drawn
nor inference of implied consent and it was held that the landlord was not estopped
from seeking eviction on the ground of unauthorised sub-letting. The conduct of
the landlord in accepting the rent from the society was held to be of no
consequence. We have already observed earlier that the inference drawn from
findings of fact is a legal question. It would not amount to interfering or
substituting the finding of fact by the revisional court.
Hence
the decision in the case of Ubaiba (supra) relied upon by the learned counsel
for the appellant would not be of any assistance to it.
In
view of the discussion held above, we find no reason to interfere with the
order passed by the High Court setting aside the orders of the appellate
authority and upholding the orders of the trial court, refusing to draw any
inference of implied consent on the basis of inaction or conduct of the
landlord. The consent as envisaged under Section 11 (4) (i) of the Kerala
Buildings (Lease and Rent Control) Act 1965 would mean consent with some
positive act which may lead to inference of conferring right on the tenant to
sub-let the premises and mere inaction would not be sufficient to amount to
implied consent on the part of the landlord.
In the
result, the appeal is dismissed. However, there would be no order as to costs.
----------------------J.
(D.P. Mohapatra)
---------------------J.
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