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Standard Cashew Industries and anr. Vs. N. Krishnan - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtKerala High Court
Decided On
Case NumberC.R.P. No. 1226 of 1980
Judge
Reported inAIR1981Ker24
ActsKerala Buildings Lease and Rent Control Act, 1965 - Sections 2 and 11(3)
AppellantStandard Cashew Industries and anr.
RespondentN. Krishnan
Appellant Advocate V. Bhaskaran Nambiar,; C.R. Natarajan,; M.K. Ananthakris
Respondent Advocate C.K. Sivasankara Panicker,; K.S. Radhakrishnan and; K.S.
DispositionPetition dismissed
Cases ReferredR. K. Jain v. Khazan Singh
Excerpt:
.....limitation in the u; the parties knew well that the building was taken for running the cashew factory. 12. the only remaining question to be considered is whether the respondent has succeeded jn making out his plea of bona fide need under section 11 (3). the rent control court, the appellate authority as well as the revisional court have held in favour of the respondent, which meads that the bona fide need put forward was made out on evidence. before me is a landlord, who is admittedly rich, pitted against the tenant, who also is rich. need is not something which a person cannot well do without. in shri rattan chand jain's case, ((1978) 1 rent cr 265) (supra) .it appears that the element of need would signify the existence of such state of affairs that requires relief which..........hand is that the subject-matter of the lease conies squarely within the enlarged definition of the word 'building' in section 2 of the act. the employees of the factory are riot the subject-matter of the lease. they may remain in the factory or may not. all that is agreed upon is that the lessee will not be liable for the claims of the employees prior to the lease.7. the petitioner's counsel placed great reliance on the decision reported in dwarka pd. v. dwarka das, (air 1975 sc 1758) in support of his contentions. it is necessary to read section 2 of the act in its entirety and (contd. on col. 2)kerala act2. definitions.-- in this act, unless the context otherwise requires,--(i) 'building' means any building or hut or part of a building or hut, let or to be let separately for.....
Judgment:
ORDER

V. Khalid, J.

1. The tenant in a rent control petition is the revision petitioner. The building sought to be evicted is a running cashew factory. The landlord-respondent obtained rights in the property as per a document dated 20-8-1974. After waiting for the statutory period he filed the petition on two grounds, namely, bona fide need and waste. The claim for bona fide need found favour with alt the courts. Hence this revision.

2. The petitioner's counsel urged two points before me : (1) that on the admitted facts of the case, the claim of the landlord will not come within Section 11(3) of the Kerala Buildings (Lease and Rent Control) Act and (2) that the lease in question is one falling outside the purview of the Act,

3. Before the court of the Rent Controller the case of the tenant was that the petition related to a building and land held under a licence and not a lease. It was also contended that the claim put forward did not amount to bona fide need. The first court held against the contentions. Before the appellate authority also the same case was repeated without success. Before the revisional court the case of licence appears to have been given up obviously because the petition and the counter proceeded on the footing that Ext. A 2 is only a lease. The revisional court has observed that it was only at the evidence stage that the case of licence was put forward. The case put forward, according to him, was that Ext. A 2 is basically a lease of land or at any rate a composite lease and therefore the provisions of the Act did not apply. That court found that Ext. A 2 was not a lease of the land nor a composite lease. It accepted the case based on bona fide need and thus dismissed the revision. The ground taken now in the revision petition as ground No. 9 is that the courts below should have held that the lease was a composite lease outside the purview of the Rent Control Act. But what is argued before me is not that it is a composite lease but that it is a lease of a running factory and not a lease of a building. This contention was rested largely on the decision reported in Dwarka Pd. v. Dwarka Das (AIR 1975 SC 1758) and it is contended that the case on hand came squarely within the said decision. Though this question in its present form was not put forward before the courts below, I shall deal with it since it can be said to be a jurisdictional issue. But before doing so, I will refer to the necessary facts of the case.

4. It is the admitted case of the petitioner and the respondents that they are cashew processors and exporters. The respondent is an actual user as per the Import Trade Control Policy. The cashew factory in question belonged to one Ramachandra Reddiar. The lease in question was taken by the petitioner from him. The respondent purchased it for a consideration of Rupees 1,50,000/-. The respondent has two factories of his own. He took another factory on lease for one year i, e. 1972-73. After the expiry of that period, he surrendered the factory. It was thereafter that he purchased the present factory. The respondent issued a notice to the petitioner after he obtained rights in the property, to vacate the premises. This notice was followed by two suits. O. S. No. 122 of 1974 was filed by the petitioners against Ramachandra Reddiar for specific performance of an alleged agreement to sell the factory. That suit was dismissed for default. (Ext. A 8 judgment and Ext. A 9 decree). A petition to restore the suit to file was dismissed as per Ext. A 10 order. A second suit, O. S. No. 784 of 1974 was also filed by the petitioner for a permanent injunction restraining the respondent from trespassing into the land portion or taking the usufructs of the trees therefrom. That was also dismissed. It was confirmed in appeal. In the meantime the present application was filed for eviction under the Act.

5. I will refer to the terms of the lease and consider the plea whether the lease relates to a building or not. Ext. A 2 is the lease, entered into between Ramachandra Reddiar and the petitioner. In the preamble the lessor is described as the owner of the cashew factory bearing Licence No. 2530 and Registration No. Q 30 and the subject-matter of the lease as consisting of the factory buildings, machineries and the premises. The lease is for one year. Unless it is renewed by consent, the lessee will surrender the factory with all the equipments and machineries and re-transfer the licence. The lessor has the right to send his representative for cultivation of the land in which the building 'is situated and for collection and removal of the agricultural produce. The lessee is not in any way responsible for payment of wages to workers previously employed in the factory. It is not disputed that the lease was of the factory buildings, machineries and the premises and that it was for the specific purpose of running the cashew factory,

6. The petitioner's case is that the subject-matter of the lease is not a 'building' as defined in Section 2 of the Act; for, what the respondent gets back on surrender of the lease is not the factory with its machineries alone but the licence, quota permit, the stock-in-trade and even the labourers. The respondent's case on the other hand is that the subject-matter of the lease conies squarely within the enlarged definition of the word 'building' in Section 2 of the Act. The employees of the factory are riot the subject-matter of the lease. They may remain in the factory or may not. All that is agreed upon is that the lessee will not be liable for the claims of the employees prior to the lease.

7. The petitioner's counsel placed great reliance on the decision reported in Dwarka Pd. v. Dwarka Das, (AIR 1975 SC 1758) in support of his contentions. It is necessary to read Section 2 of the Act in its entirety and (contd. on col. 2)

Kerala Act

2. Definitions.-- In this Act, unless the context otherwise requires,--(I) 'building' means any building or hut or part of a building or hut, let or to be let separately for residential or non-residential purposes and includes --

(a) the garden, grounds, wells, tanks and structures, if any, appurtenant to such building, hut, or part of such building or hut, and let or to be let along with such building or hut;

(b) any furniture supplied by the landlord for use in such buildings or hut or part of a building or hut;

(c) any fitting or machinery belonging to the landlord, affixed to or installed in such building, or part of such building and intended to be used by the tenant for/or in connection with the purpose for which such building or part of such building is let or to be let but does not include a room in a hotel or boarding house; .....'

contrast it with the word 'accommodation' in the U. P. Act which fell for consideration by the Supreme Court. I am extracting below Section 2 of the Kerala Act and Section 2-A of the U. P. Act to have a close-up of the word 'accommodation' in one and 'building' in the other.

(See below comparative table)

In the U. P. Act, an exemption clause was added by the Amending. Act, by which accommodation used as a factory or for industrial purposes where the business is carried on was exempted. In the Supreme Court case, the building was admittedly one built and adapted for screening films. The plaintiff was carrying on cinema business there. He discontinued it, and then it was leased to the defendant along with the equipment, fittings and furniture to enable him to operate cinema. The rent for the building was separately fixed at Rs. 400/-per month and for the projector etc. Rs. 1,000/- per month. There was an admission in that case that running a cinema business did constitute an industrial purpose. On a consideration of the facts of that case, the Supreme Court held that the building fell outside the definition contained in that Act, dehors the exemption clause.

8. The learned counsel for the petitioner referred to certain passages in that judgment and said that they would squarely apply to

U. P. Act

'Accommodation' means residential and non-residential accommodation in any building or part of a building and includes,

(i) gardens, grounds and outhouses of any appurtenant to such building or part of a building;

(ii) any furniture supplied by the landlord for use in such building or part of a building;

(iii) any fitting affixed to such building or part of a building for the more Beneficial enjoyment thereof.'

The Amending Act added a clause reading thus :

'but does not include any accommodation used as a factory or for an industrial purpose where the business carried on in or upon the building is also leased out to fee lessee by the same transaction.'

the case on hand. In other words it was contended that the Supreme Court would have said the same thing if in that case the definition in the Kerala Act bad fallen for decision. He compared certain peculiarities in that case with the case on hand. The building ib the Supreme Court case was admittedly built and adapted for screening films while the building in the present case is admittedly built and adapted for funning a cashew factory. In the Supreme Court case it was admitted that running a cinema business did constitute an industrial purpose. The building here was taken for funning a cashew factory which also is an industrial purpose, if the lease is of a going undertaking such as a running or ready to launch and fully equipped cinema house, the emphasis is not so much on the building but of business, 'actual or imminent'. Here also it is a going undertaking fully equipped for the cashew factory; the building is of secondary importance. If a running business was the subject-matter of the lease, the prominent thing will be not what houses the business but the business itself. The building becomes secondary since every business or industry has to be accommodated in some enclosure or building. Same, according to the petitioner's counsel is the case here. Since the subject-matter of the lease is a running concern, the building is of secondary importance. In addition, the dominant intent rule was also pressed into service by the petitioner's counsel to contend that what the petitioner wanted was not the building but its machineries and the capacity to run the factory with the machineries.

9. These comparisons cart create an impression that the petitioner has a case to win. But tbe case so assiduously built up has to crash when one reads para 23 of the above judgment. In para 23 Krishna Iyer, J., speaking, fox the Bench distinguished the decision reported in Mohd. Jaffer Ali v. S. R. Rao, (AIR 1971 Andh Pra 156) (FB) and the Kerala High Court decision reported in Govindan v. Kunhitekshmi Amma, (AIR 1966 Ker 244) (FB), with the following observation :

'A bare reading of the two cases would show that certain amendments had been made to the parent statutes whereby the definition was expanded and its wide range was made to include all tenancies relating to all structures, even though accessories, furniture and fittings for use in the house were also made over. There is no doubt that the word 'fittings' may take m a projector or other apparatus used for a cinema but it is one thing to say that apparatus is fixed in a building and it is another to say that such fixture or apparatus is for the beneficial enjoyment of the building .....'

In my view, this observation is sufficient to repel the contention that the Supreme Court case squarely applied to the case on hand. The above observation clearly shows that the definitional limitation in the U; P. Act cannot apply to a Kerala case. I shall now consider briefly the glaring distinctions between the two sections.

10. In tbe U. P. Act, the 'fitting affixed' is for the beneficial enjoyment of the building. The gardens, grounds, wells, furniture, fitting etc. are appurtenant, subservient and for the beneficial enjoyment of the tenant during the period of the lease. The tenant may or may not use the furniture or the linings supplied. Not so in the Kerala Act. In addition to the fact that the Kerala Act contains the word 'machinery' along with 'any fittings', the further words used namely 'intended to be used by the tenant for or in connection with the purpose for Which such building or part of such building is let', make the distinction complete. The object of the section cannot be made deafer. The fittings or machinery are not for the beneficial enjoyment of the tenant. They are for the very purpose for which me building is let. In other words, they form an integral and indivisible part of the subject-matter of the lease. So viewed, there it absolutely no difficulty in coming to the conclusion that a factory with fittings and machinery adapted for running the business falls squarely, within the definition of the word 'building' occurring in Section 2 of (the Act of 1965).

11. Another distinction, minor though, can also be noted. Unlike in the Supreme Court case, in this case, there is no separate rent fixed for the building and for the business. The rent 'fixed is a consolidated rent. The lessor has not stipulated for payment of any portion of the profit or income from the business. The parties knew well that the building was taken for running the cashew factory. It was on the wording of the section m the U. P. Act, that the Supreme Court observed that 'the personality of the thing let out is a going concern or enterprise, not a lifeless edifice'. Here the building, though a lifeless edifice, afforded habitation with all the necessary fittings and machineries to run the cashew factory, which on the wording of the section, answered its requirements. Thus the Supreme Court case cannot help the petitioner. I hold that the lease conies within the Act.

12. The only remaining question to be considered is whether the respondent has succeeded jn making out his plea of bona fide need under Section 11 (3). The rent control court, the appellate authority as well as the revisional court have held in favour of the respondent, which meads that the bona fide need put forward was made out on evidence.

13. That being so, in this case one where the narrow jurisdiction of this Court under Section 115, Civil P. C can be exercised to unsettle the concurrent findings entered by the courts below The respondent's case for eviction under Section 11 (3) has one virtue. He has put forward an honest case. He did not put forward either a son or any other dependent relative to claim eviction on the ground that such son or dependent relative wants the building for his occupation. According to him, he purchased the property for running a cashew factory. He waited for the statutory period, and then approached the rent control court for eviction. In 1972-73 he had taken another cashew factory on lease. On the expiry of that lease he gave back the factory. It was under these circumstances that the claim for eviction was made. He purchased the premises for 1 1/2 lakhs of rupees in 1954. Purchase of raw cashew nuts is regulated by certain rules. The owner of a factory cannot as of right run his factory by purchasing raw nuts locally. He has two other factories for which he has quota for imported cashew nuts. Because of the limited quota available, it is not possible for him to work the factory throughout the year. It is his admitted case that his factories are idle for at least 9 to 10 months a year. He has to employ 500 to 515 people in the other two factories. He wants this factory not to work for the period when the other two factories do not work but for the period for which there is allotment. The disputed factory also has a large number of workers. From the documents produced in the case it is seen that the disputed factory worked in 1969-70 for 64 days. It is the admitted case of the parties that the petitioner also owns two factories in addition to the disputed factory and has quota for these factories. The question for consideration under these circumstances is whether any interference with the concurrent findings of the courts below is warranted.' I have no doubt to hold that the respondent's case is bona fide. As already indicated he came to court with a clean case that he wants to run the factory himself. But that is not enough; for he has to establish the additional fact that the request made amounts to a 'need'. It is difficult to lay down a hard and fast rule regarding the confines of the word 'need'. Each case has to depend upon its own facts. Before me is a landlord, who is admittedly rich, pitted against the tenant, who also is rich.

14. The object of the Act is to regulate the leasing of the buildings, prevention of unreasonable eviction of tenants and for the control of rents. On the materials available, it cannot be said that this petition is filed as a pretext for eviction or that the petitioner intends to give this building on higher rent to another tenant. Need is not something which a person cannot well do without. It is of course something more than a 'requirement'. In Chandukutty v. George, (1977 Ker LT 607), Balgangadharan Nair, J. held that 'requirement' is synonymous and almost interchangeable with 'need'. With great respect, I find it difficult to persuade myself to accept the wide manner in which the learned Judge has enunciated the law. Perhaps in an appropriate case, the observation that the words need and requirement are synonymous, will have to be further examined in the context of the Rent Control Legislation. In my view the word 'need' takes within it something more than the word 'require'. On the facts of this case I hold that the petitioner's case falls within the expression 'bona fide need'.

15. The petitioner's counsel brought to my notice the decision reported in R. K. Jain v. Khazan Singh, ((1980) 1 Rent CR 687 at p. 690) by the Punjab and Haryana High Court and relied on the following observations in para 6 :

'It requires determination as to what would be the spreading distance of the word 'need' as used by their Lordships of the Supreme Court in Phiroze Bamanji Desai's case, (AIR 1974 SC 1059) (supra) and that of the word 'excuse' used by S. P. Goyal, J. in Shri Rattan Chand Jain's case, ((1978) 1 Rent CR 265) (supra) ..... It appears that the element of need would signify the existence of such state of affairs that requires relief which cannot be well done without and it is the want of something which cannot be fulfilled except by the course sought to be adopted. The degree of need, of course, will vary from case to case but the absence thereof would make a sought for ejectment to be a mere excuse. Thus the question which, necessarily, will in each case arise is whether the landlord wanted resumption of possession in pursuing a course, adoption of which he can or cannot well do without.'

This observation takes up an extreme position which, with great respect, does not reflect the correct position in law, to accept which would be to hold that a landlord has to establish dire need. On the facts of this case, I held that the courts below were justified in holding that the landlord has established 'bona fide need'. The Civil Revision Petition fails and is dismissed with costs.

The petitioner's counsel requests for twomonths' time to surrender the property.This is a fair request and the request isgranted.


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