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Gillanders Arbuthnot and Co. Ltd. Vs. Mrs. V.R. Badhrunnissa - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtChennai High Court
Decided On
Reported in(1982)1MLJ437
AppellantGillanders Arbuthnot and Co. Ltd.
RespondentMrs. V.R. Badhrunnissa
Excerpt:
.....they clearly show that the negotiations for the renewal of the lease started even in september, 1978, whereas the sale deed in favour of the landlady was only on 6th april, 1979. then, after prolonged negotiations for over six months the previous owner, namely, a responsible company had renewed the lease deed on the same day simultaneously with the sale deed. what is more, it is clearly recited, in the sale deed itself that messrs. therefore, the finding of the appellate authority is clearly erroneous both on the ground of law and on the question of fact, and therefore, it cannot be allowed to stand......deed, exhibit b-8, the vendor of the landlady had bargained for an enhanced rent and executed a rent deed in favour of the tenant. the learned counsel for the tenant relies upon this registered rent deed, exhibit b-8 and claims protection under section 10(3)(d). the rent controller accepted this argument of the tenant. but, the appellate authority again committed an error and probed into the question whether the renewed lease deed was true or not, and came to the conclusion that the lease deed was executed by the vendor, namely, the previous owner of the building, without proper authority. for one thing, the validity of the lease deed need not be proved in detail in a proceeding under the rent control act, and it is enough if the tenant prima fade proves that he is entitled to be.....
Judgment:

T.N. Singaravelu, J.

1. The tenant is the revision petitioner. The respondent landlady filed the petition for eviction in respect of a non-residential building under Section 10(3)(a)(iii) on the ground of requirement for the occupation of her husband. The tenant contended that the requirement is not bona fide, and that in any event, the landlady is not entitled to file a petition before the expiry of the lease period agreed to between the parties. The Rent Controller accepted the case of the tenant and dismissed the petition. On appeal, the Appellate Authority reversed the finding of the Rent Controller and ordered eviction. Hence the revision by the tenant.

2. The premises in question is a multi-storeyed building consisting of ground floor, first floor and second floor at North Beach Road near the Madras Harbour. The tenant is M|s. Gillanders Arbuthnot and Co., Ltd. The building in question originally belonged to South India Flour Mills Ltd., Madras through whom the tenant was inducted into possession. The landlady, namely, the revision petitioner herein, purchased the building on 6th April, 1979, and thereafter called upon the tenant to vacate the premises on the ground of requirement for the purpose of business of her husband who is a businessman and an exporter at Singapore. These facts are not disputed.

3. The first point to be considered is, whether the requirement of the premises by the landlady for the purpose of running the business by her husband is bona fide. It is common ground that the landlady's husband is a citizen of Singapore doing export and import business at Singapore. According to the landlady the demised building at Madras is required for the purpose of using it as a go-down as well as office for the business run and carried on by her husband at Singapore. The landlady's husband has given evidence as P.W. 1 and has stated that he wants to open up an office at Madras in the leasehold premises so that it will be convenient for him for the purpose of his business. It was elicited from him that though he and his father have been doing export and import business at Singapore from 1963, onwards, they have not chosen to set up any office at Madras till now. In short, there is no evidence to show that the landlady's husband is carrying on any business at Madras on the date of the petition. There is also no evidence to show that they have made any preparations for setting up an office or godown at Madras. That apart, it was elicited from P.W. 1 that the landlady filed eviction petitions against the tenants in the first and second floors, but unceremoneously withdrew the same after some arrangement with them. The tenant herein is in occupation of the ground floor. It was found by the Rent Controller that the conduct of the landlady in withdrawing the eviction proceedings against the tenants of the first and second floors indicates that the requirement is not bona fide. Further, since the tenants in the first and second floors have agreed to vacate, P.W. 1 can easily be accommodated in those premises. Placing reliance on these facts, the Rent Controller rejected the case of the landlady and held that the requirement is neither trite nor bona fide. It was also pointed out that in the notice, Exhibit R-4, the landlady asked the tenant to vacate stating that the ground floor will easily fetch a monthly rent of Rs. 5,000 at the current market rate, and that if the tenant does not vacate, she will take action and recover damages at the rate of Rs. 5,000 per month. This is yet another circumstance to show that the eviction petition is motivated and that her only object is to get a fat rent from the tenant. On this evidence, the finding of the Rent Controller is justified. However, the Appellate Authority has held that there is nothing artificial in a Singapore merchant engaged in export and import business having an office at Madras near the Harbour. In this view, the Appellate Authority found that the requirement was bona fide. But, the finding of the Appellate Authority is contrary to the evidence on record and also to the legal requirement under Section 10(3)(a)(iii). Firstly, there is nothing to show that P.W. 1 is actually carrying on any business at Madras. Secondly, the premises that fell vacant have not been occupied by P.W. 1. Thirdly, there is no evidence at all to show that P.W. 1 has made any preparations for starting the business. These vital points have been ignored by the Appellate Authority which has come to an erroneous conclusion that the requirement must be, bona fide. I am unable to sustain the finding of the Appellate Authority that the requirement is bona fide.

4. There is another formidable impediment to the landlady seeking eviction of the tenant. Exhibit B-8 is a lease deed, dated 6th April, 1979, executed by the vendor of the landlady under which the lease deed was renewed on an enhanced rent of Rs. 1,400 per month for a period of five years with an option to renew for a further term of five years from 1st January, 1974. Originally, the rent was Rs. 1,100 and under this lease deed, Exhibit B-8, the vendor of the landlady had bargained for an enhanced rent and executed a rent deed in favour of the tenant. The learned Counsel for the tenant relies upon this registered rent deed, Exhibit B-8 and claims protection under Section 10(3)(d). The Rent Controller accepted this argument of the tenant. But, the Appellate Authority again committed an error and probed into the question whether the renewed lease deed was true or not, and came to the conclusion that the lease deed was executed by the vendor, namely, the previous owner of the building, without proper authority. For one thing, the validity of the lease deed need not be proved in detail in a proceeding under the Rent Control Act, and it is enough if the tenant prima fade proves that he is entitled to be protected under Section 10(3)(d) by virtue of a solemnly registered document. For another, the rent deed under Exhibit B-8 also stands scrutiny, and it cannot be rejected in the manner in which the Appellate Authority has done it. It may be recalled that the previous owner is a Private Limited Company, namely, the South India Flour Mills (Private) Ltd., Madras, having Board of Directors bound by the Company Law. In other words, it is not a private individual who has entered into a transaction surreptitiously with profit motive. This lease deed was executed by one of the Board of Directors of the Limited Company, one, Rajendra Shah, who had executed the sale deed in favour of the present landlady. Exhibit P-1 is a copy of the resolution of the South India Flour Mills (Private) Ltd., dated 30th March, 1979, under which the Director Rajendra Shah was authorised to execute necessary documents for the sale. Therefore, it is far-fetched to contend that the Director who had authority to execute a sale deed in favour of the landlady had no authority to execute a lease deed to the tenant, Messrs. Gillanders Arbuthnot and Co., Ltd.

5. Learned Counsel for the landlady strenuously contended that this lease deed is suspicious in that both the lease deed and the sale deed were executed on the same day and therefore, this renewal of the lease deed had teen brought about behind the back of the landlady. There is absolutely no basis for this contention, since the sale deed, Exhibit R-3 itself clearly recites that the lessee, Messrs Gillanders Arbuthnot and Co., is in possession of the premises as a tenant and that the tenant will attorn to the vendee. Again, it is not as if the lease deed under Exhibit B-8 came into existence all of a sudden. There is also documentary evidence in the shape of Exhibits R-l to R-7, which is the correspondence between the owner and the lesseee for the renewal of the lease. They clearly show that the negotiations for the renewal of the lease started even in September, 1978, whereas the sale deed in favour of the landlady was only on 6th April, 1979. Then, after prolonged negotiations for over six months the previous owner, namely, a responsible company had renewed the lease deed on the same day simultaneously with the sale deed. What is more, it is clearly recited, in the sale deed itself that Messrs. Gillanders Arbuthnot and Co., namely, the tenant herein, has a right of renewal of the lease and that the tenant has also prepared a fresh lease deed in respect of the ground floor for a period of five years and that it is under execution. After this clear recital to which the landlady was a party it is frivolous to contend that she was not aware of the fresh lease deed or agreement of renewal or that it is not binding on her. On the other hand, the landlady with eyes wide open has purchased the property perhaps under the impression that she will be able to evict the tenant on some ground or other. The Appellate Authority has completely ignored the recital in the sale deed just now referred to and committed a grave error in finding that the lease deed Exhibit B-8 is suspicious. Of course, the lease deed was executed at 3 P.M. and the sale deed was registered between 5 and 6 P.M. on the same day. But, there is nothing suspicious or fraudulent about it especially when the purchaser had been put on notice about the renewal of the lease. The result is, the tenant is protected under Section 10(3)(d) and the landlady who is a subsequent purchaser cannot go behind it and ask for eviction. Therefore, the finding of the Appellate Authority is clearly erroneous both on the ground of law and on the question of fact, and therefore, it cannot be allowed to stand. Consequently, the revision petition is allowed with costs and the eviction petition stands dismissed.


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