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Bombay Burmah Trading Corporation Limited, a Company Incorporated Under the Companies Act Having Its Registered Office at Bombay. Vs. A.T. Narayanaswami Pillai - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtChennai High Court
Decided On
Reported in(1981)1MLJ433
AppellantBombay Burmah Trading Corporation Limited, a Company Incorporated Under the Companies Act Having Its
RespondentA.T. Narayanaswami Pillai
Excerpt:
.....scope of the exemption, we have to turn to the language of section 30(iii) itself for a safe determination. the scope of this exemption is often described by the phrase 'composite lease'.the phrase is only a shorthand expression to denote the requirements of section 30(iii). where the lease is a composite lease in the sense that it is a composite of building as well as business assets, it is not necessary that the business part of the lease must be complete in every respect, leaving nothing to be desired and nothing to be supplemented by the tenant himself......was also proceeding almost to a conclusion. at that time, the petitioner leased out the entire cinema theatre complex to one narayanaswami pillai, the respondent in this revision. the lease was for a period of five years at a monthly rent of rs. 750. it was extended for a further period of five years on the same rent, but actually the tenant held over and continued is possession even thereafter, paying the same rent as before.2. in 1972, the petitioner filed a civil suit against the tenant for his eviction from the cinema theatre. the respondent resisted the suit contending that it did not lie. he said that he was a statutory tenant amenable to eviction only under the tamil nadu buildings (lease and rent control) act, 1960 and not by a civil court in an ejectment suit. this plea in.....
Judgment:

V. Balasubrahmanyan, J.

1. The petitioner, Bombay Burmah Trading Corporation Limited, owns a tea estate in a place called Mudis in Anai Malais. This is a place where the petitioner's employees and other residents in the locality have their residences and transact their business. With the object of providing entertainment to their own employees and the general public at Mudis, the petitioner constructed a cinema theatre with subsidiary buildings and annexes. They had the buildings equipped with fixtures, items of furniture and certain items of machinery and articles to render the theatre fit for projection and exhibition of cinematograph films. The construction of the theatre was completed in October, 1960. The fixation of machinery and fittings in the theatre was also proceeding almost to a conclusion. At that time, the petitioner leased out the entire cinema theatre complex to one Narayanaswami Pillai, the respondent in this revision. The lease was for a period of five years at a monthly rent of Rs. 750. It was extended for a further period of five years on the same rent, but actually the tenant held over and continued is possession even thereafter, paying the same rent as before.

2. In 1972, the petitioner filed a civil suit against the tenant for his eviction from the cinema theatre. The respondent resisted the suit contending that it did not lie. He said that he was a statutory tenant amenable to eviction only under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 and not by a civil Court in an ejectment suit. This plea in defence was accepted by the Court and the suit was dismissed as not maintainable.

3. The landlords did not react to the dismissal of this suit by filing an application for eviction before the Rent Controller under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. They invoked this Act for quite another purpose, namely, for fixation of fair rent, apparently acquiescing in the position that the tenant will continue. In the application filed by them for fixation of fair rent, the landlords gave a full description of the subject-matter of the lease. They described it as a 'cinema theatre building with subsidiary buildings' constructed by them for the express purpose of 'conducting cinema shows' for providing entertainment to their employees and members of the 'public' in Mudis. Details of the buildings and what furnishings, fittings and equipment they contained were set out in the body of the application as well as in a separate schedule annexed to the application. They included, among other items, 'cinemascope scree-frame curtain, cinemascope lens, adaptors, automatic curtain-mover for the screen' and 'other fittings'. The relief claimed in (he application was to fix the fair rent 'for the theatre buildings, land and fittings etc.,' as described in the schedule'.

4. The application for fixation of fair rent was opposed by the tenant on the main ground that it was not maintainable. It was contended that the lease of the cinema theatre was exempted by Section 30(iii) of the Act. This plea was rejected by the Rent Controller. He took the view that the tenant was estopped from putting forward such a plea, he having taken up the position in the earlier suit that he was a statutory tenant to whom the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 alone applied. On this basis, the Rent Controller upheld the maintainability of the fair rent application and posted it for further enquiry on merits. This order on preliminary issue as to jurisdiction was taken on appeal by the tenant. The appellate authority disagreed with the decision of the Rent Controller and upheld the tenant's objection. The appellate authority held that even though in the earlier suit the tenant had relied on the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act and had pleaded it as a bar to the maintainability of the suit, he was not estopped from putting forward the contention in the present proceedings that the lease in his favour was exempt from Section 30(iii) of the Act. The appellate authority relied on the principle that there was no estopprel against the statute. Proceeding to examine the question whether the lease of the cinema theatre building was covered by the exemption enacted by Section 30(iii) of the Act, as contended for by the tenant, the appellate authority referred to the landlord's averments in the application for fixation of fair rent, and the detailed description given therein of the buildings, fixtures, and the items of machinery in the premises. On a consideration of the subject-matter of the lease and its nature in the light of those very averments, the appellate authority held that Section 30(iii) of the Act clearly applied to the instant case In that view, he dismissed the petitioner's application for fair rent as Incompetent.

5. In this revision petition, the landlords seek to canvass the correctness of the appellate authority's decision. Mr. Varadarajan, learned Counsel for the landlords, contended that the lease in the present case cannot be regarded as of a kind which falls within the coverage of Section 30(iii) of the Act. Learned counsel invited my attention to Illustration (2) to the said section in an effect to make good his submission. This illustration is in the following terms:

Illustration 2. - Where the lease is of land and building together with fittings, fixtures, cinematograph talkie equipments, machinery and other articles, the Act does not apply to such building.

6. Learned Counsel's point was that unless the lease included the full complement of cinematograph talkie equipment and other apparatus, the exemption would not apply. Learned Counsel submitted that the Explanation would not apply even if one item of cinema theatre equipment was missing or had been omitted from the subject-matter of the lease.

7. I do not agree with this way of understanding the exemption provision. In my judgment, Illustration (2) to Section 30(iti) cannot be read and understood in isolation or as an operative provision in itself. Nor can it be read in a literal way. Illustration (2), no doubt, mentions a cinematograph talkie equipment, among other items. But the mention of that equipment is only by way of illustration. It cannot be suggested that a fully equipped cinema theatre, but equipped for showing only 'silent' films, cannot come within the, statutory exemption for the one and only reason that it lacks a 'talkie' equipment mentioned in illustration (2). In my judgment, this illustration does not call for an inventory of the equipment of cinema theatres to find out if the inventory answers and tallies fully and in every respect with the items mentioned in the illustration,

8. I do not also approve of the excessive importance sought to be placed by Mr. Varadarajan on the language of illus ration (2). Illustrations to statutory provisions are a rare commodity in modern drafting technique. Even in their heyday, illustrations were usually put in by the legislative draftsmen merely as internal aids to the construction of substantive provisions, which they were avowedly meant to illustrate. It follows that illustrations can by no means be allowed to cut down or limit the scope and effect of the substantive provisions, much less to supplant them. Nor can illustrations be upgraded and construed as independent provisions in themselves. In a matter of statutory construction, illustrations must be put in their place and must be viewed from the proper perspective. Otherwise, we would be mistaking the trees for the wood.

9. Illustration (2) is only a sample illustration which the legislature has set out by way of illustrating the thrust of the exemption provisions of Section 30(iii). In order to ascertain the real scope of the exemption, we have to turn to the language of Section 30(iii) itself for a safe determination. The section is in the following terms:

Nothing contained in this Act shall apply :--... (iii) Any lease of the building under which the object of the tenant is to run the business or industry with the fixtures, machinery, furniture or other articles belonging to the landlord and situated in such building.

10. The idea behind this provision is simple. Leases of buildings, as a general rule, are covered by the Act. The Act applies even to leases of non-residential buildings, as business premises. But the legislature wished to make a distinction between lease of building without more, and lease of an industrial or business complex in which building is only one of the items which figures. The latter is not so much a lease of a building, as lease of a commercial asset. The exemption is granted therefore to a lease which comprises not only a building, but includes certain fixtures, machinery, furniture or other articles belonging to the landlord and which are situated in the building, and which would aid the tenant in carrying on the particular business or industry for the carrying on of which the tenancy has been entered into. The scope of this exemption is often described by the phrase 'composite lease'. The phrase is only a shorthand expression to denote the requirements of Section 30(iii). Where the lease is a composite lease in the sense that it is a composite of building as well as business assets, it is not necessary that the business part of the lease must be complete in every respect, leaving nothing to be desired and nothing to be supplemented by the tenant himself. Section 30(iii) does not say that the lease must be of a business or industrial undertaking as a going concern. Nor does it require that the composite lease must be such that the business or industry leased along with the building must be in a ready running condition as at the date of the lease even if it is not actually a going concern. A lease of building cum industrial or business equipment, in as is or where is' condition might still qualify for exemption, even though the equipment will need something more to operate. In my judgment, the question in every case would be one of substance, and not one of literally applying either of the provisions of Clause (iii) or of Illustration (2 appended to that section. This means that in the task of deciding whether the exemption applies to any given case, the Tribunals and Courts should avoid extreme position one way or the other. They must avoid the mistake of treating a building lease as a composite lease merely because of the presence of certain trivial items of business equipment in the building. At the same time. Courts should also avoid the mistake of refusing the exemption on the ground that the lease did not include some minor piece or machinery or furniture or equipment, which may be regarded as a part of the equipment for the intended line of trade. As I observed earlier, the matter has to be looked into as one of substance having regard to the facts and circumstances of each case, as established by the evidence on record.

11. In the present case, the landlords them' selves admit that the lease was of a cinema theatre, as such together with the cinema equipment which they had fitted the buildings with upto the date of the lease. The tenant might have had to supplement the existing fittings and cinema equipment leased out to him, in order to make the theatre fully equipped for exhibition of films. But that does not detract from the lease being a composite lease as contemplated by Section 30(iii). I am, therefore, in entire agreement with the conclusion of the appellate authority that the lease in the present case does not brook an application for fixation of fair rent, or any other proceeding for that matter under the Rent Control Act. The result is, that this civil revision petition is dismissed. In the peculiar circumstances of the case, I do not make any order as to costs.

12. C. M. P. No, 2292 of 1979 is an application filed by the landlord to mark the lease deed as additional evidence in this revision. But I find it unnecessary to go into the terms of the lease deed, since the vital facts necessary for the disposal of the civil revision petition are to be found in the petitioner's own pleadings and other materials on record. C.M.P. No. 2292 of 1979 is accordingly dismissed.


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