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Umrao Mal Vs. Heera Lal - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtRajasthan High Court
Decided On
Case NumberCivil Second Appl. No. 116 of 1973
Judge
Reported inAIR1973Raj337; 1973()WLN357
ActsTransfer of Property Act, 1882 - Sections 106
AppellantUmrao Mal
RespondentHeera Lal
Appellant Advocate C.L. Agarwal and; L.M. Lodha, Advs.
Respondent Advocate D.P. Gupta and; S.K. Keshote, Advs.
DispositionAppeal dismissed
Cases ReferredIn Allenbury Engineers Pvt. Ltd. v. Shri Ram Krishna Dalmia
Excerpt:
.....act - section 106--lease for residence, flour mill and grass cutting machine held, it is a multipurpose lease and a notice terminating lease is not invalid.;there are two other competing purposes as already noticed, one is of residence and the other is of the running of the chaff cutting machine. the flour mill is under a tin shed separated from the main block and the area of the tenanted premises including the land is quite big in comparison to the area that the flour mill occupies.;it is mixed up with other purposes and it is a case of the lease being taken for multi-purposes.;the lease cannot be said to be one which falls under the first part of section 108 of the transfer of property act. therefore, the notice of termination of the tenancy that was given by the landlord cannot be..........procedure of a public auction for letting out the premises on rent but in the conditions of the lease no purpose was specified. then, there was no indenture to evidence the lease as already observed. in the circumstances it cannot be predicated with any assurance that the government wanted to let out the premises for a manufacturing purpose only. it is true a particular purpose may not have been intended in the beginning but if subsequently land has been used for a manufacturing purpose to the knowledge of the landlord and he has been accepting the rent then too, from the subsequent conduct of the parties it can be inferred that the lease was for a manufacturing purpose.in the present case, while in the beginning the land cannot be said to have been let out for a manufacturing purpose.....
Judgment:

Kan Singh, J.

1. This Is a defendant's second appeal arising out of a suit for ejectment from certain premises known as a 'Nohra' situated in the town of Alwar.

2. According to the plaintiff-respondent the suit Nohra including the constructions thereon originally belonged to the State of Rajasthan. The premises were let out to the defendant-appellant for residence for a period of ten years, on a monthly rent of Rs. 14.50.On 15th April, 1964 the suit premises were purchased by the plaintiff. Thereafter he served the tenant with a notice on 6th June. 1966 and terminated the tenancy. The plaintiff filed the suit for ejectment, inter alia, on the ground of bona fide reasonable necessity. He averred that he wanted to construct a so-down and also was desirous of putting up a mill for the manufacture of sugar, oil and 'dal'. It was also averred that the defendant tenant had cut certain trees standing on the premises and thus had damaged the property. The decree of arrears of rent amounting to Rs. 43.50 was also prayed for.

2-A. The defendant contested thesuit. It was admitted that the suit Nohra originally belonged to the State of Rajas-than and the same had been subsequently sold to the plaintiff. It was also admitted that the premises were let out by the State to the, defendant on a monthly rent of Rs. 14.50. It was, however, asserted that the premises had been let out to the defendant for a manufacturing purpose and the defendant had put up a chaff-cutting machine on the land. It was denied that the plaintiff wanted the suit premises for his bona fide personal necessity. The cutting of the trees was also denied. The receipt of notice for termination of the tenancy was admitted but it was stated that the notice was not valid, in that, a six-month notice for terminating the lease was required to be given. According to the defendant the plaintiff had an ulterior motive in seeking the ejectment of the defendant as he wanted to enhance the rent.

3. The learned Additional Munsif Magistrate No. 2. Alwar before whom the suit was filed framed a number of issues. He held that the plaintiff required the suit premises for his bona fide reasonable necessity. He however did not accept the plaintiff's plea that the defendant had materially damaged the suit premises. Further, he held the notice for termination of the tenancy to be valid. In the result he decreed the plaintiff's suit for ejectment.

4. Aggrieved by the decree of the learned Additional Munsif Magistrate the defendant went in appeal to the court of the Additional District Judge, Alwar but without any success.

5. It is in these circumstances that the defendant tenant has come in second appeal to this Court.

6. The appeal was admitted on 22nd February, 1973. The notice for the stay application was also issued. Thestay application came up for orders on 9th March. 1973. Since there was only one contention as to whether the notice that was issued for terminating the tenancy was valid in the circumstances of the case, on the request of the parties both the stay application and the appeal were ordered to be taken up together.

7. The learned counsel for the appellant contends that the dominant purpose of the lease was a manufacturing one. According to Section 106 of the Transfer of Property Act, six months' notice was, therefore, required to be given to the tenant for terminating the lease.

8. The learned counsel for the respondent contests the stand. He raises a two-fold contention. Firstly, according to him the tenancy being for a fixed period of ten years and the period having expired long back in 1960, no notice was required to be given for terminating the lease as the defendant was continuing on the premises as a statutory tenant on account of the protection under Section 13 of the Rajasthan Premises (Control of Rent and Eviction) Act. 1950 (hereinafter referred to as the 'Act'). In the second place it was argued that the lease was if at all both for residential a(r) well as manufacturing purposes and in such & case the tenancy could be taken to be only a monthly tenancy terminable on fifteen days' notice. Both the learned counsel invited attention to a number of cases, the more important of which will be referred to in the course of the discussion that follows.

9. I will first read relevant provisions of the Transfer of Property Act. Section 106 provides :

'In the absence of a 'Contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year; terminable on the part of either lessor or lessee, by six months' notice expiring with the end of a year of the tenancy; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days' notice expiring with the end of a month of the tenancy.

Every notice under this section must be in writing signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or toone of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property'

10. Section 107 provides as to bow the leases of immoveable property from year to year or for any term exceeding one year are to be made. It lays down that a lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument. All other leases of immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.

11. Section 116 may also be read. It lays down what is holding over. It provides that if a lessee or underlessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or underlessee, or otherwise assents to his continuing in possession, the lease is in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in Section 106.

12. I may first proceed to consider as to whether this was a lease for a fixed period of ten years as contended. It appears that the property was leased out as a result of public auction. The conditions of the auction are contained in document Ex. A-l which is an admitted document. It is laid down therein that repairs would be made by the tenant and he will have to spend at least Rs. 200/- for it. Further, he was required to submit an account thereof. Then, it was provided that for the period of ten years, in one lump sum the tenant will have to spend Rs. 300/- over the repairs so that the property may not deteriorate. Then, there are certain conditions about the upkeep of trees standing on the land. The period of lease is men-Honed as ten years.

13. It is common ground that no lease deed was executed by the Government though the possession of the property was delivered to the tenant and he started paying rent as agreed and the Government were accepting the same. The document Ex. A-1 is dated 16th November. 1950 and it is also admitted that this period of ten years ended in November. 1960. Since there was no registered deed and not even a written lease deed as is required under Article 299 of the Constitution, the appellant cannot be held to be a tenant for a fixed term and his possession from the beginning will be that of a tenant from month to month, or year to year as the case may be, about which I will be saying a little later. Therefore. there is no force in the contention of the learned counsel for the respondent that no notice for determination of lease was required to be given.

14. Apart from this, even after the expiry of the period of ten years the rent was being accepted by the Government and therefore the possession of the appellant was that of a tenant holding over within the meaning of Section 116 of the Transfer of Property Act. Therefore, the notice for determining the lease was required to be given.

15. The only question is whether the notice had to be given to the tenant on the footing that the lease being for a manufacturing purpose could be determined only by a six months' notice or it was otherwise than for a manufacturing purpose, so that it could be determined by the notice as was given in the case The notice is Ex. 7. It is dated 6th June. 1966. The tenant had been called upon to vacate the premises by 31st July. 1967 or from such date which he thought that the month of tenancy would expire.

16. There is also no dispute that the defendant has a flour mill and the fodder-cutting machine installed on the premises. While the learned counsel for the defendant-appellant argued that the land was taken on rent right from the beginning for a manufacturing purpose the learned counsel for the respondent contends that there was no such purpose manifested in the beginning as there was no lease deed giving expression to such a purpose. In the alternative, he argued that even if by putting up the flour mill and a fodder-cutting machine the land can be said to have been used for a manufacturing purpose within the knowledge of the landlord the purpose cannot be said to be exclusively a manufacturing purpose or dominantly a manufacturing purpose for that matter. The learned counsel invites attention to the pleadings of the parties. He submits that the premises were let out admittedly for a residential purpose and the tenant should not be heard to say that they were let exclusively for a manufacturing purpose.

I may read paragraphs 1 and 2 of the plaint and the corresponding paras 1 and 2 of the written statement in juxtaposition.

^^1&;ggS fd 'kgj vyoj ekS- ukSgjk egrkcflag esa ,d tk;nkn vtuke ukSgjk egrkcflagokds gS ftlds nf{k.kh ifPNeh djus ij pan edkukr fjg;'k nks eaftysa e;ik[kkuk bR;kfn ds cus gq, gS vkSj dqN edkukr [k.Mghj gkyr esa gS vkSj chpe [kkyh pkSd o iMr tehu o mles lMs gq, isM gS vkSj blds pkjks rjQiq[rk MaMk cuk gqvk gS ftldk eq[; }kj if'pe dh gS A bl fooj.k ds uksgjs dhiSek;'k iwoZ if'pe 141 fQV 3 bap o mkj nf{k.k 161 fQV 3 bap gS rFkk cusgq, edkukr dh rQlhy bl izdkj gS fd] uhps dh eafty esa dksBMh lkr] frokjk,d] thuk ,d] eafty ckyk; rd o ik[kkuk ,d oks nks [kaMgj edkukr rFkk eaftynwljh esa pkSckjk ,d] dksBMh ,d] pkanuh ,d] o ik[kkuk ,d A eqUntsZud'kk es 'kkewyk nkok jax lq[kZ A gnwn v/kkZ tk;tkn bl izdkj gSaa(&&

iwoZ esapqUuhyky feL=h eksrhyky vghj oxSjg A

if'pe esa lMdljdkjh A

mkj esafpjathyky czk- ljdkjh xyh A

nf{k.k esajsoMjke vghj A

1&&;g gS fd fteu ua- 1Lohdkj gS A 2&&;g gSfd mDr tk;nkn igys feykf[;r ljdkj Fkh vkSj eqnk;syk us ljdkj ls okLrsfjgk;'k bl tk;nkn dks 10 lky ds fy, 14&50 iSlk ekgoj ij fdjk;s yh gqbZFkh ftldha fe;kn fdjk;nkj lekIr gks pqdh gS A

2&&;g gS fd fteu uacj 2 Lohdkjugha gS A dsoy fjgk;'k ds fy, ukSgjk fooknxzLr fdjk;s ij ugha fy;k x;k]vfirq dkj[kkuk dqVVh dkVus] vkVk ihlus dh e'khu] rsy fudkyus dk dkj[kkukbR;kfn yxkkus ds fy, ukSgjk fooknxzLr fdjk;s ij fy; x;k Fkk fdjk;snkjhfe;knh ugha Fkh vkSj u fdjk;snkjh lekIr gqbZ gS*A

17. In para 1 of the plaint the plaintiff has clearly averred that the 'nohra' was taken for a residential purpose for a period of ten years. Para No. 1 of the plaint has been admitted. This means that there was a house of the plaintiff and it had certain 'Kotries' on the ground floor and certain other apartments on the first floor.

18. Reading of para 2 of the written statement shows that the defendant had no doubt denied that the premises were not exclusively for the residential purposes but they were so taken for setting up a factory, putting up a fodder-cutting machine, establishing a floor mill and oil factory.

19. Thus, there is no gainsaying the fact that the premises were taken both for residential as well as for manufacturing purposes.

20. Now, if the purpose is not exclusively a manufacturing purpose, or In the circumstances cannot be said to be dominantly a manufacturing purpose, then six months' notice is not required; because in that event the case wouldfall under the second part of Section 106 of the Transfer of Property Act and not under the first part Therefore, there has been much debate by the learned counsel on either side whether the purpose was exclusively a manufacturing one or a mixed purpose which was dominantly a manufacturing one or it was of such a character where it could not be said that the purpose was dominantly a manufacturing one- The learned counsel have tried to support their contentions by a number of authorities as already observed.

21. However. I may first dispose of the question whether the setting up of a fodder-cutting machine or a flour mill would constitute a manufacturing purpose. Now. so far as the fodder-cutting machine is concerned what really happens is that the stalks of fodder are cut with the help of the machine into pieces of smaller size or out into chaff so that they may become readily marketable or easily eatable by the cattle. It does not result in transformation or in the change of the goods as they wereoriginally existing. In fact, there is no material change.

22. It is true the phrase 'manufacturing purpose' as used in Section 106 is to be taken in its popular sense and it means the making of articles of trade and commerce by means of machinery. Whether a particular process or activity results in manufacturing of goods will depend, by and large, on the nature of the goods.

22-A. Now, the second question here is whether the grinding of grain or corn into flour by a mechanical process would result in the manufacturing of the flour as such. Now, there is no transformation so far as the chemical composition of the grain is concerned when it is turned into flour- One may not find any significant change in the properties of the goods either but from the point of view of trade and commerce the commodity is understood in a different sense, that is, what is flour is not grain and vice versa. If one goes to a dealer and asks for grain he would not give him flour or vice versa. Though flour is no doubt a derivative of foodgrains yet grain and flour are commercially different and distinct commodities. Therefore, when on account of the mechanical process that the persons operating the flour mill employs, the grain is ground into flour it would be 'manufacture' within the meaning of Section 106 of the Transfer of Property Act.

The case cited by the learned counsel for the appellant Behari Lal v. Smt. Chandrawati, AIR 1966 All 541 fortifies me in holding so. There is another case of the same High Court reported as Bal-want Singh v. L. Murari Lal. AIR 1965 All 187 which relates to the splitting of pulses into 'dal' by a mechanical process. This was also held to be a manufacture and the lease taken for the establishment of a 'Dal Mill' was taken to be a manufacturing purpose. It is not unknown that in the modern era there are quite big flour mills employing quite a large number of labourers and technicians. A flour mill may be a big or a small one but to my mind the grinding of food-grains into flour by substantially a mechanical process would be a manufacturing within the meaning of Section 106 of the Transfer of Property Act. The learned counsel for the respondent referred me to a number of cases but they were not to the point and I need not encumber this judgment by citing them.

23. The more important question and a difficult one too is to determine whether the purpose for which the premises were taken was a manufacturing purpose. There is no written deed evidencing it as already observed. It does, however, appear from Exhibit A-3 that originally the defendant had an idea of establishing an oil mill and it was for that purpose that he made an application for letting out the premises to him. Subsequently, however, the Government resorted to the procedure of a public auction for letting out the premises on rent but in the conditions of the lease no purpose was specified. Then, there was no indenture to evidence the lease as already observed. In the circumstances it cannot be predicated with any assurance that the Government wanted to let out the premises for a manufacturing purpose only. It is true a particular purpose may not have been intended in the beginning but if subsequently land has been used for a manufacturing purpose to the knowledge of the landlord and he has been accepting the rent then too, from the subsequent conduct of the parties it can be inferred that the lease was for a manufacturing purpose.

In the present case, while in the beginning the land cannot be said to have been let out for a manufacturing purpose as such, the subsequent events go to show that the land was inter alia being used for a manufacturing purpose so far as the flour mill was concerned. There was no evidence regarding the property being used for an oil mill which was the purpose indicated in the application made by the defendant in the year 1950. The case is one of letting out the premises for a multiple purpose which could be manufacturing, residential or any other like the carrying on of a trade. So far as the present premises are concerned the purpose as a result of the subsequent behaviour of the parties turned out to be (1) establishment of a flour mill which is a manufacturing purpose. (2) putting up of a chaff cutting machine which is a non-manufacturing purpose as I have al-ready indicated and (3) for residential purposes as admittedly there is a house which is used for residential purposes. The flour mill is in a tin shed separated from the main house. Apart from this, as I have already extracted from para 1 of the plaint the Nohra is quite a big one, 141 ft. 3 inches East-West and 161 ft. 3 inches North-South. The flour mill occupies a very small area out of this big Nohra let out to the defendant.

It is in this context that I have to consider whether the purpose of the lease was dominantly a manufacturing one. In C. Mackertich v. Steuart & Co. Ltd.. AIR 1970 SC 839 the facts were that the premises were let out to a firm carrying on business as coach builders under a registered lease. The object of the company was to carry on trade and business of coach and carriage buildersand to buy sell, import, manufacture, repair, let on hire and otherwise deal in carriages and vehicles of every description. The lessor was treating the company as a monthly tenant. Their Lordships observed that it was for the company to prove that the lease was dominantly for a manufacturing purpose and when this was not done the tenancy will have to be taken as monthly and terminable by 15 days' notice. It may be observed that the fate of the appeal before their Lordships turned on the appreciation of the facts end circumstances of the case. Their Lordships have, however, made observations regarding the question whether under Section 106 of the Transfer of Property Act the test was exclusiveness of the manufacturing purpose for applying for presumption under Section 106 of the Transfer of Property Act.

In Allenbury Engineers Pvt. Ltd. v. Shri Ram Krishna Dalmia, AIR 1973 SC 425 their Lordships considered the question and brought in the doctrine of exclusive and dominant character of the manufacturing purpose. In that case, on the premises the repairing or reconditioning of the vehicles was being done. Some spare parts were also being manufactured. The land was used for keeping automobiles, jeeps, etc. which were in a damaged condition and they were sold after some repairs. Their Lordships observed that even though some spare parts were being manufactured for repairing or reconditioning the vehicles, the dominant purpose of the lease would still have to be regarded as one for storage and re-sale of the vehicles and not for manufacturing purposes. Their Lordships added that manufacturing of spare parts would be merely incidental to the main purpose of disposal of the vehicles as without repairing or reconditioning them, such disposal could hardly have been possible. Their Lordships also laid down as to what are the implications of the term 'manufacture' within the meaning of Section 106 of the Transfer of Property Act Their Lordships observed :

'The burden of proving that the lease was for manufacturing purposes, must for the purposes of Section 106, lie on the party who claims it to be so. That burden is to establish that the exclusive or at least the dominant purpose of the lease was the manufacturing purpose. The expression 'manufacturing purposes' in Section 106 is used in its popular and dictionary meaning, the Transfer of Property Act not having applied any dictionary of its own for that expression. The word 'manufacture' implies a change, but a mere change in the material is not manufacture. There must be such a transformation that a new and differentarticle must emerge having a distinctive name, character or use.'

24. Now, in the present case there is no exclusive purpose of manufacturing involved in the lease. Can one say unhesitatingly in the circumstances that the dominant purpose of the lease was that of manufacturing There are two other competing purposes as already noticed. One is of residence and the other is of the running of the chaff cutting machine. The flour mill is under a tin shed separated from the main block and the area of the tenanted premises including the land is quite big in comparison to the area that the flour mill occupies. Then, it is also a relevant consideration that the rent that was settled right from the beginning was the monthly rent though I am far from suggesting that that alone could be a decisive factor. Taking the overall effect of all the facts and circumstances of the case it cannot be said that the defendant has been able to establish that the dominant purpose of the lease was a manufacturing one. It is mixed up with other purposes and when it is a case of the lease being taken for multi-purposes, i. e. when several purposes are mixed up It will have to be determined in the light of the facts and circumstances of each case as to which of the several purposes was the dominant purpose. There could be no hard and fast rule for this. Therefore, in the present case the lease cannot be said to be one which falls under the first part of Section 106 of the Transfer of Property Act. Therefore, the notice of termination of the tenancy that was given by the landlord cannot be held to be invalid.

25. The appeal has, therefore, no force and is accordingly hereby dismissed. But the parties are left to bear their own costs.

26. The learned counsel for the appellant requests that some respite be allowed to the appellant to vacate the premises on account of the difficulty of finding accommodation in these days. Looking to the fact that the appellant has remained on the premises for almost twentytwo years some reasonable time should be allowed to him to vacate the premises. Six months time is accordingly allowed to the appellant to give the vacant possession of the premises to the respondent but this shall be subject to the condition that he pays all the arrears of rent upto date within one month from today and thereafter goes on paying compensation (equivalent to rent) to the respondent month by month by the 15th of the following month till he vacates the premises.

27. The learned counsel finally prayed for leave to appeal under Section 18 of the Rajasthan High Court Ordinance. In view of the circumstances I am not inclined to grant the leave which is hereby refused.


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