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Sree Nataraja Flour Mills Vs. Venkatarathnaiah - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKarnataka High Court
Decided On
Case NumberCRP Nos. 610 and 3975 of 1981
Judge
Reported inILR1986KAR382
ActsTransfer of Properity Act, 1882 - Sections 108 and 109
AppellantSree Nataraja Flour Mills
RespondentVenkatarathnaiah
Appellant AdvocateS.V. Narasimhan, Adv.
Respondent AdvocateH.R. Venkataramanaiah, Adv.
DispositionRevision dismissed
Excerpt:
.....(central act no. 4 of 1882) - section 109 -- scope and ambit -- on transfer of part of property leased transferee steps into shoes of lessor subject to all rights and liabilities of lessor under section 108 of the act until determination of lease -- two premises well demarcated, leased together on single tenancy being sold separately to two difference persons, they become landlords and are entitle to file eviction petitions separately in respect of portions sold to them.;two non-residential shop premises bearing two different number leased out as one unit, were sold to two different persons; the purchasers sought eviction in respect of the shop premises purchased by two seperate petitions for eviction. inter alia contended by tenants that tenancy being one and indivisible, eviction..........herein, are presently carrying on their business as partners of the firm city traders in a rented premises belonging to sri b. s. lakshminarayana setty and are facing threat of eviction. in fact their landlord having brought proceedings for eviction had obtained an order of eviction and the revision filed by them in crp. no. 1651/78 has been dismissed confirming the order of eviction granting time till 30-6-1981 to give vacant possession. it is also not disputed their petition seeking special leave to appeal has been rejected by the supreme court finally on 12-4-1982 and the stay granted has since been vacated. in the circumstances, mr. narasimhan is justified in not urging the arguments on the grounds of bonafide and reasonable requirement of the landlords-respondents. he.....
Judgment:
ORDER

Patil, J.

1. In these two revisions filed under Section 50 of the Karnataka Rent Control Act, hereinafter referred to as the Act, the tenants have sought to challenge the legality and correctness of the orders of eviction dated 24-6-1981 and 3-10-1980 passed by the XI Additional Judge, Court of Small Causes, Bangalore City, and the III Additional Civil Judge, Bangalore City, in H.R.C. No. 23 of 1980 and H.R.C. No. 400 of 1975, respectively, on their file.

2. Two non-residential shop premises bearing Nos. 57 and 58 situated in Old Taragupet, Bangalore, in occupation of the petitioners are the subject of dispute. They originally belonged to three sisters, namely, Girijamma, Renuka and Sarvamangala, daughters of Veeranna Gubbi, and they were let out together as one unit to Petitioner-1 herein Sree Nataraja Flour Mills and Perfumery Works, on a monthly rent of Rs. 170/-. Petitioner-2 M. A. Narayana Murthy, his father M. V. Aswathanarayana Shetty and B. K. Srinivasa Murthy (Respondent-6 in H R C proceedings) were originally partners of the firm. Later on Petitioner-3 M. A. Nagaraja Gupta and Petitioner-4 M. A. Krishna Murthy also joined as partners of the firm in the year 1971. The two brothers P. Venkatarathnaiah, Respondent in CRP. 3975/81 and P. Ramachandra Respondent in CRP. 610/1981, who have been carrying on a partnership business in the name and style as City Traders in premises No. 148, Old Taragupet, Bangalore-53, being under the thereat of eviction--their landlord having brought proceedings for their eviction--thought of dissolving their partnership business and starting their new business, and purchased the two shop premises in question under separate sale deeds dated 30-5-1974 from the original owners. While the former purchased permises No. 57, the latter purchased premises No. 58 having apportioned the rent at the rate of Rs. 70/- and Rs. 100/- per month respectively representing the rent of the premises bearing Nos. 57 and 58, they called upon the petitioners-2 to 4 to pay them the rent of the premises accordingly. Petitioners-2 to 4 went on paying the rent of the premises accordingly to them separately, but, however, under protest questioning the validity of the sale deeds and splitting up of the tenancy. When the business of the petitioner-1 firm was shifted on to premises No. 36, K. V. Temple Street, Bangalore-5, petitioner No. 5 Nataraja Trading Company continued the business in the two shop premises. When the 5th petitioner claiming to be the tenant of the two premises offered to pay the rent, the respondent refused to accept on the plea that petitioner-5 was not the tenant of the premises and brought proceedings for eviction. While P. Ramachandraiah, respondent in CRP 610/81 brought the proceedings for eviction in HRC. No. 400/75 on the grounds mentioned in Clauses (h) and (f) of Sub-section (1) of Section 21 of the Act, i.e. not only he required the shop premises No. 58 reasonably and bonafide for his personal use and occupation for carrying on his business, but because of the sub-lease of the premises in favour of petitioner-5 Nataraja Trading Company he was entitled for possession of the premises, P. Venkatarathnaiah, respondent in CRP. 3975/81, brought proceedings in HRC. No. 23 of 1980 on the same two grounds as also on the ground mentioned in Clause (p) of Sub-section (1) of Section 21 of the Act, that is to say that the business of the firm Nataraja Flour Mills and Perfumery Works having been shifted on to its own building in No. 36, K.V. Temple Street, Bangalore-53, he was entitled to possession of the premises.

3. The petitioners who resisted the claim of the landlord-respondents denied either the two premises in question were required by them for their respective business or there was any sub-lease as alleged. On the other hand, they contended as the rent in respect of the two premises was being paid out of the fund of petitioner-5 firm, it was petitioner-5 who was the tenant of the premises. They also contended further that the tenancy in respect of the two premises being one and indivisible, the respondents could not seek their eviction separately and the proceedings for eviction as brought by them separately were not maintainable in view of the provisions of Section 109 of the transferred of Property Act.

4. Though the Courts below rejected the claim of the respondents for eviction on the ground mentioned in Clause (f), they allowed their claim under Clause (h), in both the proceedings. The claim of the respondent in CRP 3975/81 was also allowed under Clause (p) of Sub-section (1) of Section, 21 of the Act in HRC No. 23/1980. Being aggrieved, the tenants have come up in these revisions.

5. The respondents have, however, not filed any revision questioning the legality and correctness of rejection of their claim under Clause (f) of Sub-section (1) of Section 21 of the Act.

6. Mr. S. V. Narasimhan, learned Counsel appearing for the petitioners in both the cases, did not seek to dispute that the requirement of the premises by the respondents in both the cases was reasonable and bonafide, obviously because the two brothers, respondents herein, are presently carrying on their business as partners of the firm City Traders in a rented premises belonging to Sri B. S. Lakshminarayana Setty and are facing threat of eviction. In fact their landlord having brought proceedings for eviction had obtained an order of eviction and the revision filed by them in CRP. No. 1651/78 has been dismissed confirming the order of eviction granting time till 30-6-1981 to give vacant possession. It is also not disputed their petition seeking special leave to appeal has been rejected by the Supreme Court finally on 12-4-1982 and the stay granted has since been vacated. In the circumstances, Mr. Narasimhan is justified in not urging the arguments on the grounds of bonafide and reasonable requirement of the landlords-respondents. He confined his arguments on two grounds urged in the revision petitions.

7. Firstly he contended, the contract of tenancy in respect of the two premises being single and indivisible the eviction in respect of one or both in separate proceedings brought by the respondents herein could not be granted. In support of this contention, he strongly placed reliance on the provisions contained in Section 109 of the Transfer of Property Act and the decisions in : AIR1964All350 , Shamboo Dayal v. Chandra Kali, AIR 1979 Calcutta 167, Amar Prasad v. Arun Kumar and : [1968]1SCR536 , Miss S. Sanyal v. Gian Chand. Secondly he contended, the specific plea raised by the petitioners in the objection statement filed by them in reply to the application of the respondents made for eviction is that the sale deeds executed in favour of the respondents were sham and nominal and the Courts below have failed to consider this aspect of the case and as such the orders of eviction passed in both the proceedings were vitiated and deserved to be set aside.

8. Mr. H. R. Venkataramanaiah, Learned Counsel appearing for the respondents in both the revisions, on the other hand, strongly refuted these contentions and submitted even if the petitioners had raised the plea that the sale deeds were sham and nominal transactions, the same was given up at the hearing and the Courts below, therefore, committed no error in not considering that aspect of the case. He also contended, the provisions in Section 109 of the Transfer of Property Act is in no way bar for bringing an action for eviction of a part of the premises leased, because the transferee of a part of the leased property also acquires all the rights of the lessor in that part of the property transferred as if that alone had comprised in the lease and on such transfer a new relationship is created between the transferee and the lessee and as such the transferee of a part of the premises leased could bring action for eviction in respect of that part of the premises transferred to him and the only thing that is not permissible is, without the consent of the lessee no additional burden could be imposed on the lessee in view of the provisions contained in Section 37 of the Transfer of Property Act. In the case on hand, the transferees their selves having agreed to apportion the rent of the premises and there being no additional burden on the tenants, the apportionment of the rent and the payment of rent as apportioned by the tenants to the respective transferees, the respondents herein, there was a new relationship created as lessors and lessees between the transferees and the lessees and the transferees are as such entitled to seek eviction of the part of the premises transferred to them and the Courts below have committed no error in making the orders of eviction. In support of his contention, he also placed reliance on the decisions in : AIR1954Mad514 , Bhogilal v. Subramania Iyer and a Full Bench decision of Madhya Pradesh High Court in : AIR1980MP8 , Sardarilal v. Narayanlal (FB).

9. Taking the latter contention first for consideration, it may be noted that though in H.R.C. No. 400/75 a plea has been raised to the effect that the sale deeds executed in favour of Respondent-3 were sham and nominal transactions, but that was not pressed into service. As rightly pointed out by Mr. H.R. Venkataramanaiah, Learned Counsel appearing for the respondents, at one stage, when the evidence of PW-1 (petitioner in HRC 400/75) was being recorded the Learned Counsel appearing for the tenants submitted that the tenants were not disputing the purchase of the premises and that is also clear from the note made in the course of the deposition of PW-1. It appears, no contentions were also advanced in the Courts below in both the cases in this behalf and, therefore, the tenants-petitioners having given up that ground cannot be permitted to press into same in the revision. Therefore, the only material, question of law that requires to be decided is : Whether the contract of tenancy in respect of the two premises being single and indivisible, the eviction in respect of one or both in separate proceedings as brought by respondents herein could not be granted.

10. It may be mentioned here, as pointed out by Their Lordships of the Supreme Court in the case of V. Dhanapal Chettiar v. Yesodai Ammal, : [1980]1SCR334 , none of the State Rent Acts has abrogated or affected the provisions contained in Section 107 of the Transfer of Property Act, though many State Rent Acts abrogated have brought about considerable changes in the rights and liabilities of lessor and lessee and have done away with the law engrafted in Section 108 of the Transfer of Property Act except in regard to any matter which is not provided for in the State Act either expressly or by necessary implication and notice under Section 106 of the Transfer of Property Act terminating the tenancy is unnecessary. Therefore, Section 109 of the Transfer of Property Act is still applicable. It reads as follows :--

'If the lessor transfers the property leased, or any part thereof, or any part of his interest therein, the tranferee, in the absence of a contract to the contrary, shall possess all the rights and, if the lessee so elects, be subject to all the liabilities of the lessor as to the property or part transferred so long; as he is the owner of it ; but the lessor shall not, by reason only of such transfer, cease to be subject to any of the liabilities imposed upon him by the lease, unless the lessee elect to treat the transferee as the person liable to him.

Provided that the transferee is not entitled to arrears of rent due before the transfer, and that, if the lessee, not having reason to believe that such transfer has been made, pays rent to the lessor, the lessee shall not be liable to pay such rent over again to the transferee.

The lessor, the transferee and the lessee may determine what portion of the premium or rent reserved by the lease is payable in respect of the part so transferred, and, in case they disagree such determination may be made by any Court having jurisdiction to entertain a suit for the possession of the property leased.'

11. A plain reading of the Section marks it clear, where the lessor transfers the property leased or any part thereof, the transferee, in the absence of any contract to the contrary, shall possess all the rights of the lessor and the lessee shall be subject to all the liabilities of the lessor as to the property or part of the property so tranferred. The transferee of the property leased or any part thereof so transferred steps into the shoes of the original lessor and for all practical purposes that the transfer of the property leased or any part thereof so transferred becomes the lessor and where only a part of the property leased is transferred, the lessee becomes the lessee of the transferee of the part of the property so transferred and he will be subject to all the liabilities of the lessor as to the property or part thereof so transferred. The rights and liabilities of the lessor and lessee having been specified in Section 108 of the Transfer of Property Act, while the contract of lease will be binding on the transferee, the lessee will have the right to hold property leased without interruption on paying the rent or premium reserved by the lease, By virtue of what is stated in the latter part of Section 109, it is also clear that where a part of the property leased is transferred, there is severance of tenancy. But, inspite of severance of tenancy the lessee will continue to hold the property without interruption and the original lessor, the transferee and the lessee are at liberty to determine what portion of premium of rent reserved by the lease would be payable in respect of the part of property so transferred. In the event of any disagreement between them, the Court will have a jurisdiction to entertain a suit to determine the premium or rent so payable in respect of the part of the property so transferred. The logical conclusion of this is : On the transfer of a part of the property leased, there is severance of tenancy. The transferee of the property leased, or where it is transferred to different persons, all the transferees, step into the shoes of the lessor. There being thus severance of tenancy, on transfer of a part of the property leased and the transferee becoming the lessor and the lessee becoming the lessee of the transferee of the part of the property so transferred, they will be subject to all the rights and liabilities of the lessor and the lessee as specified under Section 108 of the Transfer of Property Act, until determination of the lease.

12. In the case of Ram Chandra v. Ram Saran, : AIR1978All173 , considering the provisions of Section 109 of the Transfer of Property Act and after review of several decisions, it is held that one of the co-owners can, after partition, sue for ejectment of tenant from his share of leased property. The decisions in the case of shamboo Dayal v. Chandra Kali relied upon by Mr. Narasimhan, Learned Counsel appearing for the petitioners, and in the case of Bhogilal v. Subramania Iyer replied upon by Mr. Venkataramanaiah, Learned Counsel appearing for the respondents, it appears, are not of much assistance because of the question of law as now raised in the present case did not arise for consideration there. In the first mentioned case the property leased was transferred to three different persons in different portions. The three transferees brought separate applications for ejectment of the tenants. The Rent Controller and Eviction Officer by a common order allowed the applications and made an order of eviction. It was contended that the three transferees had become owners of three different portions of the property and, therefore, they should have filed separate application which should have been decided by separate orders. Repelling that contention a passing reference was made to Section 109 of the Transfer of Property Act and it was held that the sale transaction itself could not have the effect of splitting of the plaintiffs' single tenancy into three separate tenancies without his consent and since admittedly there was no such agreement or consent on the part of the tenant, he continued to remain the tenant of the whole of the property leased even after the three sale deeds and, therefore, there was nothing illegal in the three plaintiffs joining together in a common application for permission to eject the tenants from the three different portions and when three different plaintiffs could join in the same suit on the basis of different cause of action, there was no reason why the same principle should not be extended to suitable matters in the case of applications for ejection. In the latter case, the Managing Trustee of Charities with the sanction of the High Court granted lease of the premises for a period of 25 years in favour of the petitioner Bhogilal M. Davay who brought action for eviction against the respondent S. R. subramania Iyer, who refused to accept transfer and instead of paying the rent to the petitioner went on sending the rents by M.O to the Managing Trustee. The question there raised was whether the petitioner was a landlord within the meaning of Section 2 of the Madras Buildings (Lease and Rent Control) Act. Dealing with the expression 'landlord' as defined there and having regard to the lease deeds executed by the Managing Trustee in favour of the petitioner, it was held that a lease can be a transfer of part of the interest in the property as contemplated under Section 109 of the T. P. Act and thereupon the transferee gets all the rights of the transferor as to the severable part so transferred, and as such the transferee is landlord and he is entitled to apply for eviction under Section 7(3) of the Rent Control Act.

13. The question as now raised arose for decision in the case of Sardarilal v. Narayanlal. The Full Bench of the Madhya Pradesh High Court observed that Section 109 has the effect of severing tenancy in respect of a part of the property transferred by the lessor and the transferee can terminate tenancy of the part transferred to him and that there was clear indication to this in the last clause of Section 109 which provides for appointment of rent in respect of the part transferred even without the consent of the lessee. It was further observed as indicated therein, the lessor, the transferee and the lessee may determine what portion of the premium of rent reserved by the lease is payable in respect of the part of the property transferred and such determination may be made by any Court having jurisdiction to entertain a suit for the possession of the property leased and the effect of this clause was to enable apportionment of rent in respect of part transferred even without consent of the lessee by an order of the Court. The provision for apportionment of the rent without consent of the lessee is an indication that Section 109 has the effect of severance of lease. Proceeding further, it is also observed as follows :

'....Section 109 will have to be construed differently in these two types of cases for which there is no justification. In our opinion, there is no such difficulty in the application of Section 109 because it does not apply to a ease where only a share in the property leased or a share in any part thereof is transferred.

We have earlier pointed out that the words 'any part of his interest therein' as used in Section 109 do not refer to any fractional share but only to an interest which is not the entire interest of the lessor but something less than that; for example, where the lessor, instead of selling the property leased or a party thereof, mortgages or leases the same it would be said that he has transferred his part of a interest therein. Cases where there is only a transfer of a fractional share in the property leased or in a part thereof would be governed by Section 37, and not by the Section 109. A transferee of a share in the property leased or in any part thereof will became a co-owner with the lessor and will stand in the same position as a co-lessor.'

14. I am in respectful agreement with this view. In the instant case, though two premises were leased together and there was a single tenancy in respect of both the premises, but the premises being well demarcated and severable and the two premises having been sold separately to respondents herein, they became landlords of the premises ; the rent was apportioned without creating any extra burden on the tenant and as such they were entitled to bring application for eviction of the respective portions transferred to them; they could as well join together. The fact that they have brought two separate proceedings in respect of separate premises transferred to them is not a ground to reject their claim for eviction. The Courts below have committed no error in making the orders of eviction.

15. In the decision in the case of Miss. S. Sanyal v. Gian Chand the question of law as now raised and governed by the provisions of Section 109 of the Transfer of Property Act did not arise directly for consideration. Their Lordships of the Supreme Court, while dealing with the provisions contained in Section 13(1)(e) of the Delhi and Ajmer Rent Control Act (38 of 1952), have observed that the jurisdiction of the Court may be exercised under Section 13(1)(e) only when the premises are let for residential purposes and not when the premises being let for composite purposes, are used in specific portions for purposes residential and non-residential. There the contract of tenancy in respect of residential and non-residential portions of the premises being single and indivisible, their Lordships observed that, in the absence of any statutory provision, it was not open. to the Court to divide the tenancy into two contracts - One of letting for residential purposes and the other for non-residential purposes, and to grant relief to the landlord under Section 13(1)(e) limited to the portion of the demised property used for residential purposes. Neither there is any corresponding provision under the Karnataka Rent Control Act nor the law as enunciated by their Lordships of the Supreme Court in the said decision is applicable to the facts of the present case.

16. Similarly the decision in the case of Amar Prasad v. Arun Kumar, has no bearing on the facts of the present case. In the said decision a tenant was leased certain premises owned by a family. On partition amongst its members, a major portion of the premises fell to the share of one of the members of the family and minor portion to another member of the family. Rent was apportioned between both of them. Neither the tenant was informed of the portions allotted nor was any demarcation actually made. On default of payment of rent, one of the members of the family to whose share the major portion of the property was allotted brought a suit for eviction of the tenant, and it was rightly held that the suit for partial eviction was not maintainable because the portion which was yet to be demarcated was not a premises within the meaning of Section 2(f) of the West Bengal Premises Tenancy Act (12 of 1956) and Section 13(f) of the said Act also provided that except as provided therein no Court shall pass a decree for partial eviction. The position is different in the, present case. As earlier stated, the two premises here were well demarcated and severable and they were sold separately to the respondents herein and they became landlords of the respective premises. The rent was apportioned without creating any extra burden on the tenant to the knowledge of the tenant. The fact that the tenant had paid the rent under protest questioning the validity of sale is, under the circumstances, no reason to hold that the applications brought by the landlords of the respective premises were not maintainable. The Court below has not committed any error in making the orders of eviction. As already observed above, the Learned Counsel appearing for the tenants-petitioners did not dispute the finding recorded by the Court below on merits of the case, as regards the requirement of the premises by the respondent-landlords for their personal use and occupation. He, however, at the fag end submitted that even if the contention raised by him under Section 109 of the Transfer of Property Act could not be sustained, in the circumstances of the case it was just and proper to grant reasonable time to the tenants-petitioners to give vacant possession of the premises to the landlords. He also submitted, in the premises in occupation of the tenant-petitioner in H.R.C. 23/80 machinery had been installedled and the tenants-petitioners in respect of the same have undertaken construction of their own building for carrying on their business therein and since the construction is not yet completed, it is reasonable to grant at least two years time to him to give vacant possession of the premises. The Counsel appearing for the respondents-landlords has no objection for granting reasonable time. He, however, submitted there being an order of eviction against the respondents-landlords they have also surrendered possession of the premises in their occupation and, therefore, considering the circumstances, it would not be reasonable to grant long time to the tenants to give vacant possession. He, however, submitted that he has no objection for granting a reasonable time. Having regard to the fact that the landlords-respondents, as submitted by the Learned Counsel appearing for the respondents, surrendered the possession of the premises in their occupation, it appears, granting of long time to give vacant possession would be detrimental to the interest of the landlord. However, there is no doubt the tenants will also have to find out alternative accommodation and sufficient time is also necessary for shifting of the machinery and installed it in the other accommodation that would be available. Therefore, considering the facts and circumstances as available in the case, I think it is sufficient if six months time is granted to the tenants-petitioners to give vacant possession of the premises.

17. In the result, for the reasons stated above, the orders of eviction passed by the Courts below are confirmed. The revisions are dismissed. No costs.

18. The tenants-petitioners shall give vacant possession of the premises to the landlords within six months from to-day. If for any reason beyond the control of the petitioner-tenants in CRP. No. 3975/81 it becomes impossible to remove the machinery within six months, the petitioners in the said Revision Petition are at liberty to apply for extension of time. It is however made clear that this concession of extension of time would be subject to the condition that the petitioners shall go on paying the rent regularly every month as and when it becomes due, failing which the land lords would be at liberty to execute the orders of eviction


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