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The Union of India (Uoi) Vs. Everest Advertising (Pvt.) Ltd. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtMumbai High Court
Decided On
Case Number First Appeal No. 129 of 1960
Judge
Reported in(1961)63BOMLR365
AppellantThe Union of India (Uoi)
RespondentEverest Advertising (Pvt.) Ltd.
DispositionAppeal Allowed
Excerpt:
.....local authority will facilitate the speedy development of its lands by inducing lessees to take up building leases on terms advantageous to the government or a local authority. secondly, it is contended that even if the first part applies, the exception contained in sub-section (4) is clearly available to him and, therefore, the act will apply to the present premises. , in good substantial repair and condition. quite a good number of terms and conditions are consistent with the purpose to be achieved by erection of the buildings. this clearly refers to the plans and specifications and not to the buildings or structures. clearly, therefore, since qua the structure the plaintiff is not a lessee, the third part of section 4 has no application. it is indeed true that it refers to any tenancy..........contravention of any of the provisions. he undertook not to make any excavation on any part of the land. by clause 12 he agreed at his own expense, whether requested by the board or not, to keep the property in substantial repair and undertook to support, pave, cleanse and keep in good and substantial repair including all usual and necessary internal and external painting and white-washing. clause 13 provided for the inspection of the premises by the board or an engineer or any other officer authorised by the board. by clause 15 he undertook not to cut or maim any of the principal walls of the buildings. by clause 16 he undertook not to use or permit the said premises or any part thereof to be used for any business, trade or occupation or for any purpose whatsoever other than a dwelling.....
Judgment:

Patel, J.

1. This is an appeal by the plaintiff against an order directing that the plaint be returned for presentation to the proper Court and raises a question of interpretation of Section 4 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The short facts are that one Ratanjee Jainshetjee Tata took on lease on March 16, 1909, from the City of Bombay Improvement Trust an open piece of laud. Before this date there was an agreement between the parties for the said purpose on April 4, 1905. In pursuance to the agreement, the lessee erected a building on the land known as Rafia Manzil. By the terms of the lease it is said he became the lessee of the entire land and the building, though he himself had built the building. There haw been successive assignments of the building and the land and before the plaintiff became the assignee, one Jahangir Jamshedji Mahudawala became an assignee of all the rights. All the rights of Mahudawala were assigned to the present plaintiff, the Union of India, on August 20, 1954. Since prior to the date of this assignment the defendant-respondent, a private limited company, was a tenant of Flat No. 7 on the third floor of the building at a monthly rental of Rs. 453.45 nP. The plaintiff terminated the tenancy of the defendant by a notice dated January 23, 1958, and followed it up with the suit on March 20, 1958, in the City Civil Court for eviction. The learned Judge held that the Act was applicable to these premises and, therefore, the City Civil Court had no jurisdiction, since it was a dispute between a landlord and a tenant, and it was the Small Cause Court alone, which had jurisdiction. He, therefore, directed the plaint to be returned for presentation to the proper Court. The present appeal is directed against this order.

2. The lease between the parties is a very stringent one. Though the tenant. himself had built the building, it proceeded to provide that the Board (Trustees for the Improvement of the City of Bombay) devised to the lessee all the piece of land together with the buildings and premises then erected and built thereon together with all rights, easements and appurtenances belonging to the premises subject to certain conditions. The tenant was to hold and enjoy the premises for 999 years on payment of certain yearly rent calculated on certain basis. The tenant covenanted with the Board, for the payment of rents reserved as agreed between the parties and by Clause 2 not to erect or permit to be erected en any part of the land any additional structure except such as was in strict, accordance with the provisions of the agreement and was according to the specifications approved by the Board and by Clause 5 not to use the open laud demised for any purpose other than as garden or open space nor to erect any structure whatever over the same. By Clause 6 he agreed to screen certain portions of the house as approved by the Board. By Clause 7 he agreed not to make any additions or alterations to the building without the previous consent in writing of the Board or the Engineer. It also further provided that the specifications regarding alterations, etc., shall be strictly adhered to except as sanctioned by the Board or the Engineer. It also provided for certain quality of the material for the erection of such constructions. In the event any material was found to be unfit or unsound, the lessee undertook to remove the same and replace it with proper material. By Clause 8 the lessee agreed to lay certain drains, etc. By Clause 9 he agreed to cut down, alter or remove any projection over any part of the premises erected in contravention of any of the provisions. He undertook not to make any excavation on any part of the land. By Clause 12 he agreed at his own expense, whether requested by the Board or not, to keep the property in substantial repair and undertook to support, pave, cleanse and keep in good and substantial repair including all usual and necessary internal and external painting and white-washing. Clause 13 provided for the inspection of the premises by the Board or an Engineer or any other officer authorised by the Board. By Clause 15 he undertook not to cut or maim any of the principal walls of the buildings. By Clause 16 he undertook not to use or permit the said premises or any part thereof to be used for any business, trade or occupation or for any purpose whatsoever other than a dwelling house. By el. 17 ho undertook not to create any nuisance or disturbance. Clause 18 provided for insurance of the. building against damage by fire in the joint names of the Board and himself. Clause 19 provided for delivery of possession to the Board of the premises and the erections which shall have been built during the term with all the drains, etc. There' is one term, which I will refer to a little later, It is to these rights and liabilities that, the plaintiff has succeeded by assignment. Section 4 of the present Act so far as is relevant may be conveniently divided into three parts: (i) this Act shall not apply to premises belonging to Government or a local authority, or (ii) apply as against Government to any tenancy or other like relationship created by a grant from the Government in respect, of premises taken on lease or requisitioned by Government; (iii) but it shall apply in respect of premises let to the Government or a local authority. Section 4(4)(a) provides:

The expression 'premises belonging to the Government or a local authority' in Sub-section (1) shall, notwithstanding anything contained in the said sub-section or in any judgment, decree or order of a court, not include a building erected on any land held by any person from the Government or a local authority under an agreement, lease or other grant, although having regard to the provisions of such agreement, lease or grant the building so erected may belong or continue to belong to the Government or the local authority, as the case may be; and

(b) notwithstanding anything contained in Section 15 such person shall be entitled to create a tenancy in respect of such building or a part thereof whether before or after the commencement of the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Ordinance, 1959.

3. The question of construction of Section 4 came before the Supreme Court in the ease of Bhatia, Co-operative Society v. Patel (1952) 55 Bom. L.R. 199.. In that case also the terms of the lease were similar to those that I have stated above except one term. The Supreme Court held that in view of the operative portion of the lease, leasing the building itself to the tenant, though built by the tenant, and other stringent terms, the local authority must be regarded as the owner of the building, both in form and substance. It also compared the first part and the second, part of Section 4 and observed that,

The conclusion is, therefore, irresistible that the Legislature did not by the first part intend to exempt the relationship of landlord and tenant but intended to confer on the premises belonging to Government an immunity from the operation of the Act.

During the course of the judgment it also observed (p. 207) :.The Legislature may well have thought that an immunity given to premises belonging to the Government or a local authority will facilitate the speedy development of its lands by inducing lessees to take up building leases on terms advantageous to the Government or a local authority... This protection requires that the immunity should be held to attach to the premises itself and the benefit of it should be available not only to the Government or a local authority but also to the lessee deriving title from it...

Immediately, however, this judgment was pronounced, the Government intervened and came out with an Ordinance which modified in a great measure the effect of the judgment. Thereafter when the Legislature was in session, it replaced the Ordinance by means of an Act and amended Section 4 by adding Sub-section (4), which exempted properties situated as in Bhatia Co-operative Housing Society's case.

4. In view of the intervention of the Legislature by enacting, Sub-section (4), it is clear that the intention as expressed in Section 4 originally and found upon by the Supreme Court was not the real intention of the Legislature. It appears that the Legislature really intended that the provisions of the Rent Act should not apply to those premises where either the Government or the local authority was the landlord in reference to the particular premises which form the subject-matter of suit. It is no doubt true that the section is not happily worded and the patch work by amendment has not made the task of the Court easier in construing the section.

5. It is argued by Mr. Andhyarujina that the third part is an exception to the first part, and that the exemption in the third part being in reference to premises, even if the first part applies, since in this case the Union Government is a lessee and the premises are let to the Government, he is entitled to protection. Secondly, it is contended that even if the first part applies, the exception contained in Sub-section (4) is clearly available to him and, therefore, the Act will apply to the present premises.

6. There is one term in this document which is very material. Since neither in the judgment of the High Court nor in that of the Supreme Court has the term, been referred to, I must assume that that term was absent in the lease in the case of Bhatia Co-operative Society v. Patel. It is Clause 20 in the present case and follows the clause wherein it is said that the lessee shall deliver to the Board the premises and all erections which shall have been built on the premises during the said term with all appurtenances, etc., in good substantial repair and condition. Then next comes Clause 20 which provides that the tenant shall not assign the demised premises or any part thereof without the consent in writing of the Board first obtained for the purpose. But it also provides that the lessee may, within six months before the expiration of the term granted, remove such buildings as may have been erected by him upon the demised premises, provided that he shall have given to the Board twelve calendar months' notice of his intention so to do and shall have, during the said term, paid the rent reserved under the document and shall have performed the covenants and conditions of the lease and, thereafter, deliver possession of the demised ground levelled and ready for building or for any other purpose to the satisfaction of the Board or the Engineer. It then goes further to provide a clause for re-entry in the premises for non-payment of rent. This term (dearly shows that it is a misnomer in this ease to say that the Board became the owner of the structure built by the tenant. It is indeed true that the covenants are very stringent. But then the essential purpose of those covenants appears to be to protect the interests of the lessors by ensuring the proper payment of rent at the proper time and keeping the property in proper condition. Several of the terms are found because the lease was granted by the Improvement Trust which had certain duties to fulfil in the improvement of the city. Quite a good number of terms and conditions are consistent with the purpose to be achieved by erection of the buildings. Some such terms are found in land granted on occupancy tenure under the Land Revenue Code by the Government. Whenever permission is granted it is subject to building regulations and often terms of the grant are quite strict though the right is heritable. In this case, therefore, in view of Clause 20, it is clear that though the Union Government is a lessee of the land, it is owner of the superstructure, and if that is so, the first part of Section 4(1) must apply, since the premises concerned in the suit are only a part of the superstructure. As to this superstructure, since I hold that the Government is not a lessee, there can be no question of applying the third part of Sub-section (1).

7. It is argued by Mr, Andhyarujina that this conclusion cannot be supported in view of term 7, wherein the following words occur; '' The same shall thereupon become the property of the Board', It is argued that this refers to any building or alterations that are made and it provides that the buildings or alterations become the property of the Board. It is not possible to accept the contention. Clause 7 of the conditions refers to a covenant by the tenant not to make any alterations or additions to the buildings or other erections on the land granted, without the previous consent, in writing of the Board. It then provides that for the purpose of obtaining the sanction of the Board, elevation, section plans and specifications for any intended alterations or additions to the buildings or erections such plans showing the size and thickness of the walls and dimensions of the timber, iron or steel to be used arid such specifications giving the description of the materials to be used shall be furnished to the Board and such specifications shall be strictly adhered to. It also provides that the lessee shall cause tracings of such plans and copies of such specifications to be deposited with the Engineer for reference and the same shall thereupon become the property of the Board, etc. This clearly refers to the plans and specifications and not to the buildings or structures. They would always be necessary for the Board to have for reference and it is, therefore, provided in clearest language that the plans and specifications would become the property of the Board. It is also urged that as held in the Supreme Court judgment, the operative portion of the lease grants the lease not only of the land but of the superstructure and, therefore, I must hold that the lease is of the entire property to the Union. As stated before, in the case before the Supreme Court there was no clause similar to Clause 20. A document must be construed as a whole and not by reference to one particular term. Reading these terms together and the other circumstances mentioned above, it is clear that the tenant was a tenant of the land and continued to be the owner of the building. After assignment of all the rights the plaintiff has stepped into his shoes. Clearly, therefore, since qua the structure the plaintiff is not a lessee, the third part of Section 4 has no application.

8. It is argued that the amendment of Sub-section (4) (a) and (b) makes the Act applicable to the premises falling within the first part of Section 4. As held by the learned trial Judge, it is clear that the reference to the word 'person' in Sub-section (4) (a) is to any person other than the Government or a local authority. That conclusion is supported further by the provisions of Sub-clause (b) of Sub-section (4), Indeed the learned Counsel for the respondent has conceded that that would be so. His argument, however, is that since the original building was built by the first lessee and the sub-section was intended to include such buildings within the ambit of the Rent Act, as the plaintiff steps into his shoes as an assignee only, he is entitled to rely on the same. This argument also cannot be accepted. This Court has held in the case of Ram Bhagwandas v. Bombay Corporation : AIR1956Bom364 that

the question must always be whether at the relevant date the protection given in the Rent Act attaches to the premises in question.

It is also observed that the words 'erected on any land held by a person from a local authority' is descriptive of the building and that it does not emphasise the point of time when the building was erected. What is emphasised is that the nature of the building must be such as to satisfy the test that it is erected on land held by a person from a local authority and the test must be applied at the time when the protection is sought. In the present case when the dispute is raised, the building is erected on land held by the Government from local authority. It is clear, therefore, that this sub-section does not take the present case out of the provisions of the first part of Section 4, Sub-section (1).

9. It also appears to me that even otherwise it is not possible to regard the case as falling within part 3. I must consider the section as a whole. Part 2 makes it clear that where by requisition or lease the Government or the local authority has become possessed of premises and let the property to a tenant, the Rent Act will not apply. It is indeed true that it refers to any tenancy or other like relationship created by a grant from the Government. If the third part were to apply to premises which are let to Government, it would be clearly in conflict with part 2. In the third part no exception is made in favour of the second part. If, therefore, the third part is to be given its full meaning, it must necessarily cover cases governed by the second part in which case the purpose of the provision will be frustrated. In view of the observations of the Supreme Court in the above case regarding the purpose of enacting Section 4 and reading the third and the second parts together, it appears to me that though the word 'premises' is used in the third part, it was intended to apply to cases where the question arises between Government as tenant and anyone else as landlord. In this ease, therefore, since the condition is not satisfied, the. Act will not apply.

10. Assuming, however, that I am wrong in the construction of the document and also the third part of the section as above, what is the position? The second part must in any event be regarded as an exception to the third part. It is to the effect that it would not apply to relationships of tenancy created by the Government in premises either let to it or requisitioned by it. Here also the combined effect would be not to give benefit of the Act to the sub-tenant of Government, It is argued that the only relationships to which the part applies are those 'created by grant by the Government' which must mean according to counsel 'created initially by Government by grant' and reliance is placed on Regor Estates Ld. v. Wright [1951] 1 K.B. 689. The question there concerned was the construction of Section 8(1) of Increase of Rent and Mortgage Interest (Restriction) Act, 1920, where the words are similar to those in Section 18 of our Act to the effect that 'in respect of the grant, renewal or continuance of a lease'. In the eon-text in which the word 'grant' appears it can only mean an initially created grant. But the word may not have the same meaning in a statute or even in a section. It depends upon context. In law there can be implied grants. A tenancy can also be created by implied grant. It is admitted here that under the directions of the plaintiff, the defendant paid rent to the plaintiff which was accepted as such. In my view, therefore, a relationship of tenancy is created by Government in respect of premises let to Government. In this view also the Act will not apply and the defendant will not be protected.

11. The judgment of the learned trial Judge is clearly erroneous in so far as he has applied part 3 of Section 4, Sub-section (1). The other issues in the suit were decided by the learned trial Judge, some of them on concession by the defendant, in favour of the plaintiff. The only issue he answered against the plaintiff was one of jurisdiction. Since I have held that the Court has jurisdiction to dispose of the matter, the other issues having been found in favour of the plaintiff, the plaintiff is clearly entitled to a decree as prayed for. It may be stated that these findings are not challenged before me. Accordingly, I set aside the order made by the learned trial Judge and make the decree in favour of the plaintiff. The defendant do deliver vacant possession of premises to the plaintiff on or before April 30, 1961. The defendant do pay to the plaintiff a sum of Rs. 2,266.25 nP. with interest at 4 per cent, from the date of suit till realization. Decree for future mesne profits from the date of suit till delivery of possession, Defendant do pay costs throughout.


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