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B.S. Giridhar Vs. P.V. Shetty - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtKarnataka High Court
Decided On
Case NumberC.R.P. 3482 of 1981
Judge
Reported inILR1984KAR1115; 1985(1)KarLJ105
ActsKarnataka Rent Control Act, 1961 - Sections 2, 14, 31 and 43
AppellantB.S. Giridhar
RespondentP.V. Shetty
Appellant AdvocateS. G. Sundaraswamy, Adv.
Respondent AdvocateV. Krishnamurthy and ;P. Vishwanatha Shetty, Advs.
DispositionPetition allowed
Excerpt:
.....continue to be tenants for all other purposes.;notwithstanding the termination of tenancy, the person in possession of the premises would be a ' tenant' and he would be liable to pay rent and exercise the rights given to him under section 14 or section 43 of the act. his possession would not be unlawful. the fact that under section 31, one class of tenants are not liable to be evicted under the provisions of the act, does not take them out of the class of tenants for other purposes. the other rights, obligations and liabilities continue to operate, notwithstanding their immunity from eviction, under part v of the act.;(c) karnataka rent control act, 1961 (karnataka act no. 22 of 1961) -- section 14 -- applies to buildings covered by section 31. - karnataka societies registration..........of rent after termination of the contractual tenancy, the tenant still continues to be a tenant liable to pay rent not only for the past period but in future also. in absence of a decree of eviction the person in occupation of the accommodation continues to be a tenant and is not liable to pay any damages as his occupation is not unauthorised or wrongful even after the termination of the contractual tenancy....'14. the above enunciation of law makes it clear that the decisions in the two rulings of this court i.e. 1974 (2) kar. l.j. 224 and 1975(1) kar. l.j. 262 do not lay down the correct legal position. we therefore conclude that the respondent in the instant case, is a tenant and he is liable to pay rents as agreed upon or as fixed by court. his possession would not be.....
Judgment:
ORDER

Murlidher Rao, J.

1. This Revision Petition has come up before us, on a reference by Sabhahit, J., vide order dated 10-4-1984; as in his Lordship's view, the decision of the Division Bench in Raghunandan Prasad Garg v. D. Sree Sreeramsetty & others, 1974 (2) K.L.J. 224 to the extent it excludes the 'tenant' as defined in the Karnataka Rent Control Act, by interpreting Section 31 therein, requires reconsideration in the light of the law laid down in Mani Subrat Jain v. Raja RamVohra, : [1980]2SCR141

2.The facts of the case are precisely narrated in the order of reference; to the extent they are relevant to our purpose, we summarise them as follows :

Revision Petitioner is the owner of non-residential premises, bearing No. 23, J. C. Road, Bangalore. Petitioner's father, during the Petitioner's minority, leased it to respondent, by executing a registered lease deed dated 10-9-1973, for a period of five years from 1-1-1973; so it expired on 1-1-1978. On 6-3-1978, the owner issued a notice, calling upon the tenant, to vacate the premises and deliver the same to the landlord. The landlord has not accepted the rents, subsequent to 1-1-1978. The agreed rent is Rs. 650/- per month. Since the tenant did not vacate the premises, the landlord filed a suit in O.S.762 of 1978 (subsequently renumbered as O. S. 3758 of 1980); we are told that the proceedings in the said suit, are stayed by the Supreme Court, awaiting decision in this Civil Revision Petition. The suit was filed on 16-8-1978; before that i.e. on 13-4-1978 the tenant filed an application for fixation of 'fair rent', in HRC. FR No. 18 of 1978. The Rent Controller has fixed the fair rent at Rs. 350/- per month.

3. This revision is by the landlord against the order of fixation of fair rent at Rs. 350/- per month as against the agreed rent of Rs. 650/- per month.

4. Mr. Sundaraswamy, appearing for the landlord urged the following points : --

1)Respondent is not a 'tenant' as defined in the Act: as his lease period had expired and he is not liable to pay the rents; and

2)the fixation of fair rent has been arbitrary and is not based on relevant considerations.

5. Elaborating the first contention, it was maintained that, as per the definition of tenant in Section 3(r) of the Karnataka Rent Control Act, (hereinafter referred to as the Act), a person continuing in possession after the termination of the tenancy in his favour, must satisfy the first criteria in the definition clause, namely, 'any person by whom or on whose account rent is payable for the premises'. In the instant case, the tenancy has expired on 1-1-1978 ; thereafter (While the tenant has factually not paid the rent) his liability is only to compensate the landlord by paying damages or mesne profits for his unlawful possession ; the amount so paid would not be rent. Developing this line of proposition, Mr. Sundaraswamy relied on Section 31 of the Act, which reads thus ;

'31. Exemption in respect of certain buildings -- Nothing contained in this part shall apply to a non-residential building the monthly rent of which exceeds five hundred rupees or the annual rental value of which exceeds six thousand rupees:

Provided that the exemption under this Section shall not apply : --

(i) to any building taken on lease by a public authority or by an educational institution ; or

(ii) to any building occupied by more than one tenant each paying monthly rent exceeding five hundred rupees or an annual rent not exceeding six thousand rupees.'

6. It is propounded, by Mr. Sundaraswamy, that as the tenant of a non-residential premises, whose rent exceeds Rs. 500/- per month, cannot be evicted under Part V of the Act, he is not a tenant, who is liable to pay rent ; on the other hand, he would be like an unauthorised occupant, whose liability is to pay damages, for his unlawfulpossession. Strong reliance for this proposition is placed on Raghunandan Prasad Garg's case ; the relevant portion, which is pressed into service reads thus :

' The Act has been enacted by the State Legislature to provide for the control of rents and evictions, for the leasing of buildings, to control rates of hotels and lodging houses and for certain other matters. Under the Scheme of the Act, certain benefits are conferred on tenants. The Act also imposes certain obligations on such tenants. In order to claim benefits conferred in the Act, the person claiming the benefits must be a 'tenant' and there must be the relationship of landlord and tenant between the parties. Such relationship cannot be established without the assent of the landlord after the expiry of the term of the lease unless, in view of the provisions of the Act, his consent becomes irrelevant. After the expiry of the term of the lease if the tenant is protected from eviction under the provisions of Part V of the Act, the relationship of the landlord and tenant is established even without the assent of the landlord for the continuance of the lease. In such a contingency, the tenant is entitled to the benefits of Section 18 ; if the fair rent of the building has been determined, he is not liable to pay any amount in excess of the fair rent; if the fair rent has not been determined, he is not liable to pay anything in excess of the agreed rent.

The benefits of Section 18 would be available to a tenant if his eviction is controlled by the provisions of Part V. In such a case, until the tenant is evicted, he is liable to deposit the rent in the Court in accordance with the provisions of Section 18.

In our judgment, after the termination of tenancy on the expiry of the lease, the defendant cannot be regarded as a tenant under the Act. The definition of the word 'tenant' gives it an extended meaning. Where an extended meaning is given to a word by the definition Section by use of the word ' include ' or ' includes', the word in respect of which ' includes' is used, bears both its extended statutory meaning and its ordinary popular and natural sense whenever that would be properly applicable, vide Max-well on Interpretation of Statutes, 12th Edn., P. 270. Section 3 opens with the words ; ' unless the context otherwise requires '. In certain contexts, a person continuing in possession after the termination of the tenancy in his favour will be a 'tenant' under the Act. One of those situations would be where the tenants are entitled to the benefits of Part V of the Act after the expiry of the term of the lease, where the assent of the landlord for continuance in possession is immaterial. Where the provisions of Part V do not apply and the tenants are not entitled to the benefit of the provisions of Part V, they cannot be regarded as 'tenants' under the Act, if they remain in possession against the wishes of their landlords, after the expiry of the lease period. Therefore, the defendant is not entitled to the benefits of 18 (2), (a) of the Act''.

7. The logic in the above decision, rests on the right and liability of eviction, under Part V of the Act. It is held that if the tenant is not liable to be evicted, under Part V, he is not a tenant at all, under the Act. Further interpreting the defining clause in 3(r), it is held that the word 'includes' gives an extended meaning, therefore a person continuing in possession after the termination of the tenancy in his favour, can become a tenant, if he satisfies the first condition namely, that he is also the person who is liable to pay the rent or on whose account rent is payable. These observations were made in the suit for damages for use and occupation, against a tenant, who had suffered a decree for possession, in an earlier suit and continued his possession.

8. Reliance was also placed on Venkatramana Bhat v. Prabhodh Naik, wherein Sadananda Swamy, J., has held that since the defendant, in that case, was not entitled from eviction, under the Rent Control Act, his possession must be considered as 'wrongful', after the expiry of the lease period and he is liable to pay mesne profits.

9. Mr. V. Krishnamurthy, Learned Counsel appearing for the tenant, submitted that, the plain reading of the definition in Section 3(r) would suggest that there are three categories of tenants; he contended that the function of definition clause being to define a term in the Act, each clause in the said definition must be understood independently; he submitted that ordinary rule of interpretation regarding 'inclusive' definition should be adopted and if so done, the word 'tenant' means a person who pays rent or on whose account rent is payable and it includes other categories, mentioned in the said clause; he maintained, that each one is a category by itself and are not ingredients, the fulfillment of which makes a person a 'tenant'. He placed reliance on the , following passage in K. Abdul Subhan v. A. K. SatyanarayanaSetty.

'Plain reading of this provision makes out that three portions are contained in it. They are as follows :

(i) any person by whom or on whose account rent is payable by him, including -

(ii) surviving spouse or any son or daughter or father or mother of a deceased tenant who had been living with the tenant in the premises as a member of the tenant's family up to the death of the tenant; and

(iii) a person continuing in possession after the termination of the tenancy in his favour.

We do not encounter any difficulty in holding that a person satisfying the requirements of any of these three portions of the definition of 'tenant' becomes a tenant under the provisions of the Karnataka Act .......'

He submitted that so long as the tenant remains in possession, whether during the subsistence of lease or thereafter, he is a 'tenant'. The term includes an ex-tenant also. In support of this submission, reliance is placed on Mani Subrat Jain's case2. Dealing with the definition of 'tenant' in Section 2(i) of the E. P. Urban Restriction Act (3 of 1949) which is similar to the definition in Karnataka Act), the Court observed thus :

'The expression 'tenant' includes 'a tenant continuing in possession after the termination of the tenancy in his favour'. It thus includes, by express provision, a quondam tenant whose nexus with the property is continuance in possession. The fact that a decree or any other process extinguishes the tenancy under the general law of real property does not terminate the status of a tenant under the Act having regard to the carefully drawn inclusive clause.......'

10. To us, it appears that Mr. V. Krishnamurthy is right and his contention has to be accepted.

11. Section 31 of the Act, exempts the operation of Part V, dealing with 'control of eviction of tenants and obligations of landlords' to a non-residential premises, whose monthly rent exceeds Rs. 500/-. The said Section cannot be read as providing exemptions from the other provisions of the Act, to this class of premises. The immunity is confined to evictions. Section 2 (2) of the Act makes it clear that Parts II and III of the Act shall be applicable to the areas in Schedule I and it exempts the buildings constructed after 1-8-1957 for a period of five years. Section 14 pertaining to fixation of fair rent, occurs in Part III. It applies to all buildings, residential or non-residential, in the areas in Schedule I, except to buildings constructed after 1-8-1957 for a period of five years. This being the only exception, we cannot by implication, introduce another class ofexception. Rule of harmonious construction requires that all Sections of the enactment must act in their respective spheres and while constructing one provision, violence should not be done to other provisions. Section 31 specifically exempts Part V, to a non-residential building, whose rent exceeds Rs. 500/- per month. If Mr. Sundarswamy's contention is to be accepted, we will have to read the word 'Act' for the words 'Part V' in Section 31, then the noncombatant clause in Section 31 would read 'nothing in this Act shall apply to' instead of the existing Clause 'nothing in this Part shall apply to'. While interpreting a Section, we cannot be asked to legislate or rewrite a Section. Further, by so doing, we will be adding second exception to Section 2 (2) of the Act, which is impermissible. Since the language of Section 31 exempts only Part V and has no application to the other parts in the Statute, the interpretation suggested by Mr. Sundarswamy cannot be accepted.

12. Coming to the definition in Section 3 we reiterate our view expressed in Abdul Subhan'scase. The definition mentions three categories of tenants :-

Firstly, any person by whom or on whose account rent is payable; Secondly, the surviving spouse or any son or daughter or father or mother of deceased tenant who had been living with the tenant in the premises as a member of the tenant's family up to the death of the tenants; and lastly a person continuing in possession after the termination of the tenancy in his favour.

It follows that notwithstanding the termination of tenancy, the person in possession of the premises would be a 'tenant' and he would be liable to pay rent and exercise the rights given to him, under Section 14 or Section 43 of the Act. His possession would not be unlawful. The fact that under Section 31, one class of tenants are not liable to be evicted under the provisions of the Act, does not take them out of the class of tenants for other purposes. The other rights, obligations and liabilities continue to operate, notwithstanding their immunity from eviction, under Part V of the Act. In this context we reproduce the following observations of the Supreme Court in Dhanpal Chettiar v. Yesodai Ammal, : [1980]1SCR334

'........in our opinion, it will suffice to say that the various State Rent Control Acts make a serious encroachment in the field of freedom of contract. It does not permit the landlord to snap his relationship with the tenant merely by his act of serving a notice to quit on him. In spite of the notice, the law says that he continues to be a tenant and he does so enjoying all the rights of a lessee and is at the same time deemed to be under all the liabilities such as payment of rent etc., in accordance with the law'.

'.....C1. (8) expressly says that tenant means 'a person continuing in possession after the termination of the tenancy in his favour'. Section 3 indicated that no landlord can treat the building to have become vacant by merely terminating the contractual tenancy as the tenant still lawfully continues in possession of the premises. The tenancy actually terminates on the passing of the order or decree for eviction and the building falls vacant by his actual eviction. The giving of the notice, therefore, is A mere surplusage and unlike the law under the Transfer of Property Act it docs not entitle the landlord to evict the tenant'

13. Further in Smt. Chander Kali Bail & others v. Jagadish Singh Thakur & another, : [1978]1SCR625 it is held thus :

'......The conclusion is inevitable, therefore, that if a suit is filed on the ground of non-payment of rent after termination of the contractual tenancy, the tenant still continues to be a tenant liable to pay rent not only for the past period but in future also. In absence of a decree of eviction the person in occupation of the accommodation continues to be a tenant and is not liable to pay any damages as his occupation is not unauthorised or wrongful even after the termination of the contractual tenancy....'

14. The above enunciation of law makes it clear that the decisions in the two rulings of this Court i.e. 1974 (2) Kar. L.J. 224 and 1975(1) Kar. L.J. 262 do not lay down the correct legal position. We therefore conclude that the respondent in the instant case, is a tenant and he is liable to pay rents as agreed upon or as fixed by Court. His possession would not be unlawful. He can maintain a Petition for fixation of fair rent. We overrule the learned Single Judge's decision in 1975 (1) Kar. L.J. 262.

15. On facts we find that the premises, in question, consists of two floors, ground floor and first floor. For the ground floor, which is in dispute, the tenant had agreed to pay rent at Rs. 650/- per month. The building is constructed after 1-4-1947, therefore, one of the relevant considerations is the rental value, as entered in the property tax assessment book. Proviso to that sub-section is not applicable as records of assessment are not available. The Controller has considered only one aspect of the matter, namely, that two portions were leased out for Rs. 450/- per month in the year of construction. It is reasoned that since the ground floor fetches more rent, the reasonable rent would be Rs. 300/- per month. On this basis, the Controller has enhanced it by Rs. 50/- and has fixed the fair rent at Rs. 350/- per month. To us, this calculation, based on surmises, appears to be arbitrary and is not based on relevant considerations. The Controller should have ascertained the rent fetched in the first floor, which would be a relevant factor, further he should also consider the guidelines given in sub-section (5)(ii) of Section 14, along with the other relevant considerations like prevailing rate of rent etc.

16. As the fair rent, now determined, is arbitrary, we set aside the same; we direct the Rent and Accommodation Controller to hold a fresh enquiry, afford opportunity to both sides to adduce fresh evidence and after taking into consideration all the relevant factors, determine the fair rent afresh.

17. This Revision Petition is allowed; the order dated 30-4-1981 is set aside, case is remitted back to the Rent and Accommodation Controller to hold a fresh enquiry, in the light of the above observations and proceed to dispose of the matter, in accordance with law. No costs.


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