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Dr. N.R. Rao Alias N. Raghavendra Rao and anr. Vs. Premier Auto Electric Private Limited, by Its Branch Manager V.B. Menon - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtChennai High Court
Decided On
Reported in(1980)1MLJ1
AppellantDr. N.R. Rao Alias N. Raghavendra Rao and anr.
RespondentPremier Auto Electric Private Limited, by Its Branch Manager V.B. Menon
Cases ReferredPalaniappa Chettiar v. Ponnuswami Pillai
Excerpt:
- .....the respondent, vis., m/s. premier auto electric private ltd., gave the use of a portion of the leased premises to m/s. premier automobiles ltd., bombay and their local resident representative ran his office in the leased premises. the landlords further averred in the eviction petition that in april, 1966, they filed c.s. no. 77 of 1966 on the file of the high court of judicature, madras, against m/s. premier auto electric private ltd., bombay alleging violation of the covenant and praying for damages and an injunction restraining the defendant from further violating the covenant. a few months after the filing of the said suit, m/s. premier automobiles ltd., bombay, vacated the premises, and the prayer in the suit for injunction became infructuous at the time of the trial. the suit.....
Judgment:

P.R. Gokulakrishnan, J.

1. The revision petitioners herein filed H.R.C. No. 1433 of 1968, before the Rent Controller, Madras, for eviction of the respondent, under Section 10(2)(ii)(b) of the Tamil Nadu Buildings (Lease and Rent Control) Act, XVIII of 1960. They inter alia alleged that they are the owners of premises No. 4/A, Pattulos Road, Mount Road, Madras-2, a non-residential building, that they leased out a portion, of the said premises to M/s. Premier Auto Electric Private Ltd. (respondent) by a registered instrument bearing the date 28th October, 1961 for the purpose of running their administrative office, that the portion leased out consisted of an area of 2.225 sq. ft. in the ground floor and an area of 759 sq. ft. in the first floor, that Clause 9 of the lease deed specifically provides that the lessee should use the demised premises only for the purpose of having the administrative office of their business and for no other purpose, and that contrary to the covenant the respondent, vis., M/s. Premier Auto Electric Private Ltd., gave the use of a portion of the leased premises to M/s. Premier Automobiles Ltd., Bombay and their local resident representative ran his office in the leased premises. The landlords further averred in the eviction petition that in April, 1966, they filed C.S. No. 77 of 1966 on the file of the High Court of Judicature, Madras, against M/s. Premier Auto Electric Private Ltd., Bombay alleging violation of the covenant and praying for damages and an injunction restraining the defendant from further violating the covenant. A few months after the filing of the said suit, M/s. Premier Automobiles Ltd., Bombay, vacated the premises, and the prayer in the suit for injunction became infructuous at the time of the trial. The suit was transferred to the file of the City Civil Court, Madras, for administrative reasons, and numbered as O.S. No. 5484 of 1967. There, both the defendants admitted the violation of the covenant though they sought to justify it on various grounds. In the Judgment that was delivered in that suit on 6th March, 1968, it was found that the defendants had violated the covenant contained in Clause 9 of the lease deed, in that M/s. Premier Electric Private Ltd., had given the use of a portion of the premises to a third party. Subsequent to that, the landlords, i.e., the revision petitioners herein, issued a notice under Section 106 of the Transfer of Property Act, calling upon the tenant to vacate and deliver vacant possession of the demised premises. The tenant has replied by notice dated 18th March, 1968 stating that the lease was not liable to be terminated and that the tenant was not liable to vacate the premises. Hence, the landlords, on the ground that the tenant has used the building for a purpose other than that for which it was leased, filed a petition H.R.C. No. 1433 of 1968 under Section 10(2)(ii)(b) of the Act praying for the eviction of the tenant from the leased premises and also for costs.

2. The respondent, M/s. Premier Auto Electric Private Ltd., inter alia, contended that the landlords knew that M/s. Premier Auto Electric Ltd., and M/s. Premier Automobiles Ltd., Bombay were one unit, that to the knowledge of the landlords a portion of the premises was occupied by M/s. Premier Automobiles Ltd., Bombay and that is why no proceedings had been launched by the landlords from 1960 to 1964 in spite of the fact that M/s. Premier Automobiles Ltd., was occupying a portion of the demised premises for a long period. The respondent further contended in the eviction petition that the notice for eviction was defective and that the tenant never admitted during the trial of the suit O.S. No. 5484 of 1977, aforesaid, that the tenant has committed violation of the terms and conditions of the lease. The tenant further contended that the present proceedings taken by the landlords was barred by res judicata by virtue of Section 19 of the Act and that at the time of filing the present eviction petition M/s. Premier Automobiles Ltd., Bombay was not in occupation of the premises and therefore the breach, if any, had not existed.

3. The Rent Controller, on a consideration of the evidence on record, came to the conclusion that the respondent-tenant has violated Clause 9 of the lease deed by allowing R.W. 1, the then District Sales Manager of M/s. Premier Automobiles Ltd., Bombay to make use of the petition-premises, which was in clear violation of the terms of the lease deed. On this finding the Rent Controller ordered the eviction of the respondent and allowed the eviction petition.

4. Against the order of eviction, the tenant, M/s. Premier Auto Electric Ltd., preferred H.R.A. No. 461 of 1977 before the Appellate Authority. The Appellate Authority, after observing that M/s. Premier Automobiles Ltd., Bombay, is the parent concern of the tenant, that only a small portion was used as the administrative office of R.W. 1, that R.W. 1 was having the office even prior to the lease deed and that there was nothing to show that M/s. Premier Auto Electric Private Ltd., used the building for a purpose other than that for which it was leased, held that the petition under Section 10(2)(ii)(b) of the Act was not maintainable. After holding so, the Appellate Authority allowed the appeal with costs and set aside the order of eviction passed by the Rent Controller.

5. The landlords, aggrieved by the decision of the Appellate Authority, have preferred this civil revision petition.

6. The lessees shall not assign, sub-let heard this civil revision petition considered the decision rendered by a Division Bench of this Court in Appeal No. 825 of 1968. Appeal No. 825 of 1968 arose out of the decision in the aforementioned suit O.S. No. 5484 of 1967. That suit, as already mentioned, was for recovery of damages in a sum of Rs. 18,000 for alleged violation of Clauses 6 and 9 of the lease deed dated 28th October, 1961. The appellants in the said appeal were M/s. Premier Auto Electric Ltd. and M/s. Premier Automobiles Ltd., while the respondents therein were the present revision petitioners. Clause 6 of the lease deed runs as follows:

6. The lessees shall not assign, sub-let or part with possession of the premises or any part thereof without the specific and written consent of the lessors.

Clause 9 of the lease deed runs as follows:

9. The lessees shall use the demised premises only for the purpose of administrative office of their business and for no other purpose.

In that case, the trial Court found that the first defendant, M/s. Premier Auto Electric Ltd., has violated Clauses 6 and 9 of the lease deed and therefore it was liable in damages. The trial Court further found that the second defendant, M/s. Premier Automobiles Ltd., was also liable in damages. As regards the quantum, the trial Court fixed it at a nominal sum of Rs. 500, observing that the plaintiffs had not proved the quantum they claimed in the plaint, In appeal, a Division Bench presided over by Ramanujam and V. Ramaswami, JJ., considered the question as to whether M/s. Premier Auto Electric Ltd., has violated Clauses 6 and 9 of the lease deed and thus made itself liable in damages for such violation. The learned Judges, on a consideration of Clause 6 of the lease deed, came to the conclusion that M/s. Premier Auto Electric Ltd., has violated Clause 6 of the lease deed in permitting the second defendant to occupy a portion of the leased premises. Continuing further, the Division Bench considered the question of violation of Clause 9 of the lease deed, and observed that Clause 9 has to be taken to cover any unauthorised user by the first defendant, that if the first defendant has used the premises for purposes other than for running its administrative office then it can be said to have violated Clause 9, that having specifically found that the first defendant has violated Clause 6 by parting away with possession of a portion of the leasehold premises to the second defendant and the second) defendant has used it for its business, the Division Bench cannot find that the first defendant had also violated Clause 9 in respect of the same conduct, and ultimately held that Clause 9 of the lease deed has not been violated. Since the appellate Court sustained the finding that Clause 6 has been violated, it upheld the award of damages made by the trial Court.

7. The parties to Appeal No. 825 of 1968 were the same as in this revision petition. There also, the lease deed which we have to consider here, was in question. Since the Division Bench has held that Clause 9 of the lease deed has not been violated and since Clause 9, which we have extracted above, in effect embodies the provisions contained in Section 10(2)(ii)(b) of the Act, the learned Chief Justice who felt that he cannot accept the finding of the Division Bench as regards Clause 9 of the lease deed, has referred the matter to a Full Bench for the purpose of deciding as to whether the tenant has come under the mischief of Section 10(2)(ii)(b) of the Act. The learned Chief Justice has observed in the order of reference that incidentally the question whether the user of the building for a different purpose has been made out would have to be considered in the light of the decision reported in Palaniappa Chettiar v. Ponnuswami Pillai (1970) 1 S.C.W.R. 487, This incidental question was also referred because of the fact that Mr. U.N.R. Rao, for the petitioner stated that a third of the property was put to such use, while Mr. Govind Swaminathan, for the respondents, stated that it was not so.

8. This is how the matter is before us.

9. Before advancing arguments in the Reference, Mr. U.N.R. Rao, learned Counsel for the petitioner, submitted before us that since the learned Chief Justice has clearly found that the tenant has contravened Section 10(2)(ii)(b) of the Act, we need not go into the questions forming the subject-matter of Reference and we can allow the revision petition solely with reference to the finding rendered by the learned Chief Justice. On the other hand, Mr. Govind Swaminathan, learned Counsel for the respondents, submitted that having regard to the observation of the learned Chief Justice that he is bound by the decision of the Division Bench in Appeal No. 825 of 1968 dated 9th April, 1968, we should take note of that fact and straightaway dismiss the revision petition. We, however, do not feel persuaded to dispose of the revision petition in the summary way in which the respective counsel would like us to deal with the matter. What has been referred to us for consideration is whether clauses (6) and (9) of the lease deed are mutually exclusive and whether Clause (9) is restricted in its application only to a different user of the demised premises by the tenant alone, and secondly, whether the ratio laid down in Palaniappa Chettiar v. Ponnuswami Pillai (1970) 1 S.C.W.R. 487, would apply to the facts of the case in the event of its being found that the tenant has contravened Section 10(2)(ii)(b) of the Act.

10. We have carefully gone through the pleadings in this case filed in H.R.C. No. 1433 of 1968, and also the judgment rendered by the Division Bench in Appeal No. 825 of 1968. Apart from the fact that the said judgment was in respect of the suit for damages for violation of Clauses 6 and 9 of the lease deed, the learned Judges of the Division Bench were of the opinion that since they held that the tenant has violated Clause 6, which prohibits the tenant from sub-letting any part or the whole of the demised premises without the written consent of the lessors, the Court cannot also find that the tenant has violated Clause 9, which is to the effect that the lessee shall use the demised premises only for the purpose of administrative office of their business and for no other purpose. While giving such a finding, the Division Bench was of the view that if only the tenant himself has used the premises for purposes other than for running its administrative office, the tenant can be said to have violated Clause 9. We do not think the abovesaid finding of the Division Bench can have any impact on the matter now under consideration. What was asked for in the suit, C.S. No. 77 of 1962 (re-numbered as O.S. No. 5484 of 1967), on the file of the City Civil Court by the landlords was, the award of damages for contravention of Clauses 6 and 9 of the lease deed. For granting relief to the landlords in that suit, it was not necessary that a violation of both the clauses should have occurred. It was enough even if one of the clauses was violated. Therefore, the question, as it has now arisen for consideration in these proceedings, did not arise for consideration in the earlier suit. It cannot, therefore, be strictly said that the finding rendered by the Division Bench in Appeal No. 825 of 1968 will govern the dispute between the parties in these proceedings. However, even assuming that the finding of the Division Bench will govern the first question referred to us for consideration, we find ourselves unable to share the view taken by the Division Bench. We have already extracted Clauses 6 and 9. From a reading of those clauses it may be seen that Clause 6 contains an inhibition regarding the unauthorised sub-letting of the building, whereas Clause 9 contains restrictions regarding the mode of user of the building. In spite of the different inhibitions contained in the two clauses, it can never be said that the two clauses are mutually repellant. We are of opinion that the two clauses have a certain amount of over-lapping area, and with reference to that area the clauses are not mutually exclusive. For example, if the respondent sub-lets or parts with possession of a certain area of the premises to a third party without the consent of the lessors, then such act will not only be violative of Clause 6, but will also be violative of Clause 9 to the extent the tenant had failed to use the demised premises solely and exclusively for the purpose for which the building was let out to him. It is this aspect of the matter which has been touched upon by the learned Chief Justice in the following words in the order of reference:

The conclusion of the learned Judges, that, even though the tenant had parted with physical possession and allowed a third party to use the premises for a purpose other than the primary purpose of conducting the administrative office of their business, he could not be said to have violated Clause 9, is not acceptable to me.

Continuing further, the learned Chief Justice would observe:. I am of the view that Section 10(2)(ii)(b) has been violated, since the purpose for which the premises were used by the person to whom part of the premises was surrendered during the term of the lease, would amount, to user of the premises for a purpose other than the accredited purpose within the meaning of Clause 9.

It has been specifically found by the Division Bench in Appeal No. 825 of 1968 that the tenant has violated Clause 6 of the lease agreement by sub-letting a portion of the leased premises to M/s. Premier Automobiles Ltd. We have ourselves gone through Clauses 6 and 9, which we have extracted above. The very fact that the tenant has sub-let a portion of the building for use by some other person will squarely come under the mischief of Clause 9, by which the tenant has been specifically required to use the premises only for the purpose of administrative office of its business and for no other purpose. Even according to the decision of, the Division Bench, a third party to the lease agreement was using a portion of the building. Hence in our view Clause 9 of the lease agreement Exhibit A-l also has been definitely violated.

11. Clause 9 of the lease agreement, in effect, contains the ingredients of Section 10(2)(ii)(b) of Tamil Nadu Act XVIII of 1960. Section 10(2)(ii)(b) reads thus:

10(2). A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf, if the Controller, after giving the tenant a reasonable opportunity of showing cause against the application, is satisfied.

(ii) that the tenant has after the 23rd October, 1945 without the written consent of the landlord.

(b) used the building for a purpose other than that for which it was leased...

The purpose for which the building was leased is evident from the lease deed Exhibit P-2. As per Clause 9 the lessee shall use the demised premises only for the purpose of administrative office of its business and for no other purpose. The evidence on record clearly make's out that a third party has made use of portion of the demised building, which is definitely contrary to the purpose for which the building was leased out to the tenant, in the light of Clause 9 of the lease agreement. Hence, if the user of the building, or part thereof, by some person other than the tenant to whom it has been let out, is found to be true, the tenant will definitely come under the mischief of Section 10(2)(ii)(b) of the Act having regard to the specific Clause 9 of the lease agreement Exhibit P-2. Accordingly, we answer this question in the above terms.

12. The incidental question referred by the learned Chief Justice is whether the different user was with reference to a substantial portion of the property having regard to the decision of the Supreme Court in Palaniappa Chettiar v. Ponnuswami Pillai (1970) 1 S.C.W.R. 487. The said decision of the Supreme Court was in respect of a case of the tenant himself using a negligible portion of a non-residential building got on lease, for cooking purposes. On the facts and circumstances of that case, the Supreme Court held that the landlord failed to show that any substantial part of the building was being used by the tenant for a purpose different from the one for which the building had been let out and as such the claim of the landlord had to fail. Following the above decision of the Supreme Court, a single Judge of our High Court in E.A.E. Kamal Pasha v. V.A. Tajuddin and Ors. (1974) T.L.N.J. l80, has held that in order to bring a case within Section 10(2)(ii)(b), it is necessary to prove that a substantial part of the building was put to a different use and that in that case the landlord had not succeeded in doing so.

13. In this case, the Rent Controller had found that the tenant has allowed R.W. 1 the then District Sales Manager of M/s. Premier Automobiles Ltd., to make use of a portion of the petition premises. The Appellate Authority has observed that it is the admitted case that in a portion of the demised premises, M/s. Premier Automobiles Ltd., Bombay, were having their administrative office for a long time. Thus, from the findings of both the authorities below, it is clear that a third party had been allowed to occupy a portion of the demised building for its own purposes. We have already held in the foregoing paragraphs that this act of the tenant is clearly violative of Clause 9 of the lease agreement and that he would directly come under the mischief of Section 10(2)(ii)(b) of the Act.

14. Mr. Govind Swaminathan, relying upon the aforementioned decisions, submitted that the space occupied by M/s. Automobiles Ltd., in the demised premises cannot be taken to be a substantial part of the building in order to entitle the landlords to put forth the contention that the building was being used for a purpose different from the one for which the building had been let out. On the other hand, Mr. U.N.R. Rao, submitted that the word substantial part of the building was being used, as opposed to a minimal or trivial part of the building. Mr. Rao, further contended that the Supreme Court decision cannot be applied to the facts of the present case, since that was a case of the tenant himself using a negligible portion of the demised non-residential building for his own cooking purposes. According to the learned Counsel, in the present case the tenant has not only allowed into the building a third party to the lease agreement, but also allowed the third party to have its administrative office in a portion of the building. This, according to Mr. Rao is not only violative of Clause 9 of the lease agreement but will also attract the mischief of Section 10(2)(ii)(b) of the Act.

15. Exhibit P-3 is the plan, wherein the red-marked portion ABCD is said to be in the occupation of M/s. Premier... Automobiles. P.W. 1, the power-of-attorney agent of the landlords, has proved Exhibit P-3 and has stated that the portion red-marked in Exhibit P-3 series is the portion occupied by Mr. Pejawar, the then District Sales Manager of M/s. Premier Automobiles Ltd. Nothing was elicited in cross-objection from this witness to show that the portion occupied by M/s. Premier Automobiles Ltd., is a trival or minimal one. On the other hand, the cross-examination proceeded on the basis that the landlords were aware of the occupation of a portion of the building by M/s. Premier Automobiles Ltd., and that there was absolutely no protest by the landlords. It has also been elicited from P.W. 1 in the re-examination that M/s. Premier Auto Electric Private Ltd., and M/s. Premier Automobiles Ltd., are two different companies, registered separately. R.W. 1 the then District Sales Manager of M/s. Premier Automobiles Ltd., Bombay, has deposed that he was using a chair and a table in the premises of M/s. Premier Auto Electric Private Ltd., and that he used to come to the office for half an hour in the morning and half an hour in the afternoon if it was necessary. In cross-examination, he has stated that it is not true to say that he was occupying the whole portion marked red in Exhibit P-3 series and that he was using a table and a chair in that red-marked portion. It is in the evidence of R.W. 1 that his service representative Mr. Marsh was also using the said office. His specific version in cross-examination was that M/s. Premier Auto Electric Private Ltd. and M/s. Premier Automobiles Ltd., are different companies. In re-examination it has been elicited from R.W. 1 that Mr. Narayana Rao, (the first landlord) knew very well that R.W. 1 was occupying a portion of the petition premises since 1957. From the above evidence it is clear that M/s. Premier Automobiles Ltd., was occupying a portion of the demised building.

16. Section 2(2) of the Tamil Nadu Buildings (Lease and Rent Control) Act (XVIII of 1960), defines 'building' to include part of the building also. In Section 10(2)(ii)(b), the expression is 'used the building for a purpose other than that for which it was leased...'. Such a reference to 'building' will include part of the building also. Therefore, the occupation by R.W. 1 of a part of the building will definitely attract the mischief of Section 10(2)(ii)(b). As contended by Mr. Rao, the occupation of a portion of the building by a third party will squarely come within the meaning of occupation of 'substantial part' of the building, as contemplated by the Supreme Court in Palaniappa Chettiar v. Ponnuswami Pillai (1970) 1 S.C.W.R. 487, and such an expression 'substantial part' has been used in contrast to a minimal or trivial portion of the building. This argument is fortified by the definition given to 'building' in the Act and also the expression 'building' occurring in Section 10(2)(ii)(b) of the Act.

17. Thus, the findings of the two Authorities below, and also the evidence on record which we have discussed above, amply make out that a portion of the building was in the occupation of M/s. Premier Automobiles Ltd., of which R.W. 1 was the District Sales Manager in Madras, and the said occupation by him, in view of the sections of the Tamil Nadu Buildings (Lease and Rent Control) Act and from the meaning we have given to the expression 'substantial portion' occurring in the Supreme Court decision, referred to above, will attract the provisions of Section 10(2)(ii)(b) of Act XVIII. of 1960. Accordingly, we answer this question in the above terms.

18. In view of the findings we have given above, the civil revision petition is allowed and the eviction ordered by the Rent Controller is restored. There will be no order as to costs.


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