Full Judgment Text
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PETITIONER:
GANTUSA H. BADDI (DEAD) BY LRS.
Vs.
RESPONDENT:
MEERABAI G. PAI & ORS.
DATE OF JUDGMENT: 24/04/2000
BENCH:
S.V.Patil, R.P.Sethi, G.B.Pattanaik
JUDGMENT:
PATTANAIK,J.
This appeal is directed against the revisional Order
of a learned Single Judge of Karnataka High Court,
dismissing the Revision Petition and affirming the order of
eviction passed by the District Judge in his Revisional
Jurisdiction under the provisions of Karnataka Rent Control
Act. The legal representatives of the deceased tenant are
the appellants. The landlord filed an application for
eviction under Section 21(1) (a), (h) and (p) of the Act,
alleging that the tenant has not paid or tendered the
arrears of the rent legally recoverable from him and that
the premises are reasonably and bona fide required by the
landlord for occupation of himself as well as on the further
assertion that the tenant has acquired vacant possession of
an alternative suitable building. The Munsif at Yellapur,
on consideration of the entire materials before him held
against the landlord on all counts, and dismissed the
application for eviction by his order dated 4.10.1991. The
said order was assailed in revision under Section 50 of the
Act. The Revisional Court came to the conclusion that the
Munsiff had not properly appreciated the evidence on record.
Though he did not set aside the findings of the Munsiff, on
the question of arrears of rent and the bona fide
requirement, which are the two grounds under Section
21(1)(a) and (h) of the Act, but he did set aside the
finding on the third question namely whether tenant has
acquired a suitable alternative premise, as required under
Section 21(1)(p) of the Act and came to hold that the
eviction sought for on the grounds available under Section
21(1)(p) of the Act has to be allowed. Against the said
revisional order of the District Judge in exercise of powers
under Section 50 of the Act, the tenants moved the High
Court. The landlord also filed a revision petition against
the findings of the revisional Court on the question of
arrears of rent and bona fide requirements. The original
tenant died during the pendency of the said revision
petition and his legal heirs were substituted and brought on
record. The High Court disposed of the revision on two
grounds. Following the Judgment of this Court in the case
of Venkatesh Thimmaiah Gurjalkar vs. S.S. Hawaldar, JT
1997(8) SC 528, the High Court came to the conclusion that
the premises in question being non- residential and under
the Act the tenancy in respect of non-residential premise
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being not heritable and admittedly the tenant having died,
the revisional application is liable to be dismissed. On
the question whether the provisions of Section 21(1)(p) of
the Act is attracted or not, the High Court came to the
conclusion that in view of the evidence of the son of the
original tenant that it was the partnership firm, which was
running the business in the schedule premises and the said
firm has acquired an alternative premise, it must be held
that the grounds for eviction under Section 21(1)(p) has
been made out. With these findings, the revision filed by
the tenant as well as the one filed by the landlord stood
dismissed. On grant of special leave by this Court, this
appeal was placed before a Bench of two learned Judges,
wherein a contention was advanced that the decision of this
Court in Venkatesh Thimmaiahs case, on which the High Court
has relied upon, is contrary to the decision of this Court
in the case of Vishnu Narayan Gadskari (Dead) by L.Rs. vs.
Paralal Baladev Uza and Ors., 1995 Supp.(4) SCC 428, and in
both the cases, the question for consideration was whether
under the Karnataka Rent Control Act, the tenancy in respect
of a non-residential premises can be held to be heritable or
not. In view of the two conflicting decisions, referred to
above, the Bench, thought it fit to refer the matter to a
larger Bench and that is how the matter has been placed
before us.
The learned counsel for the appellant contends that
the latter decision of this Court in Venkatesh Thimmaiahs
case, must be held to have been not correctly decided, as it
does not take notice of the earlier decision in Vishnu
Narayans case 1995 Supp.(4) SCC 428, which was a decision
interpreting the very same provision of the Karnataka Rent
Control Act and which also relied upon the Constitution
Bench decision of this Court in Gian Devi Anands case
1985(2) SCC 683, wherein the pari materia provision of Delhi
Rent Control Act, 1958 was under consideration. The learned
counsel further urged that acquisition of a premises by the
partnership firm of which the tenant was merely a partner to
the extent of 15%, cannot be held to be an acquisition of
alternative premises by the tenant in view of the definition
of tenant in Section 3(r) of the Act and the High Court,
therefore committed serious error of law.
The learned counsel appearing for the respondent
however contended that the impugned judgment of the High
Court is unassailable, since it has followed the latter
decision of this Court on the question of heritability of a
non-residential premises and it has rightly interpreted the
provisions of Section 21(1)(p) of the Act. According to the
learned counsel for the respondent, the so-called
partnership firm being of the father and the sons and the
said firm having acquired the premises where business is
being carried on and even in the schedule premises the firm
in fact was carrying on the business, though the father was
the tenant, the conclusion becomes irresistible that an
alternative premises is now available and therefore,
eviction could be ordered under Section 21(1)(p) of the Act.
In view of the rival submissions at the Bar, two
question arise for our consideration: (1) Whether the
tenancy in respect of a non- residential purpose can be held
to be heritable under the Karnataka Rent Control Act; and
(2) Whether an individual being a tenant of a business
premises and said individual having become a partner of a
firm, if the firm acquires vacant possession of a suitable
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building, whether the tenant incurs the liability of being
evicted under Section 21(p) of the Act.
So far as the first question is concerned, it really
depends upon an analysis of the provisions of the Act. The
expression premises has been defined in Section 3(n) to
mean a building as defined in clause (a) and any land not
used for agricultural purposes. The building has been
defined under Section 3(a) to mean any building or hut or
part of a building or hut other than a farm house, let or to
be let separately for residential or non-residential
purposes and includes ----------------. The expression
tenant has been defined in Section 3(r) to mean any person
by whom or on whose account rent is payable for a premises
and includes the surviving spouse or any son or daughter or
father or mother of a deceased tenant who had been living
with the tenant in the premises as a member of the tenants
family up to the death of the tenant and a person continuing
in possession after the termination of the tenancy in his
favour, but does not include a person placed in occupation
of a premises by its tenant or a person to whom the
collection of rents or fees in a public market, cart-stand
or slaughter house or of rents for shops has been framed out
or leases by a local authority. Section 51 of the Act
provides that any application made, appeal preferred or
proceeding taken under the Act by or against any person may
in the event of his death be continued by or against his
legal representatives. In the case of Gian Devi Anand vs.
Jeevan Kumar and Ors., 1985 (2) SCC 683, the Constitution
Bench of this Court was considering the very question as to
whether the tenancy in respect of a commercial premises or
non-residential premises can be said to be heritable under
the Act. Bhagwati J, concurring with the majority view,
expressed by Sen J, came to hold that the distinction
between contractual tenancy and statutory tenancy is
completely obliterated by the rent control legislation and
if a contractual tenant has an estate or interest in the
premises which is heritable, a statutory tenant should also
be held to have such heritable estate or interest. In one
case, the estate or interest is the result of contract while
in the other, it is the result of statute. But the quality
of the estate or interest is the same in both cases. In the
majority judgment expressed through Sen, J, it was observed:
Keeping in view the main object of Rent Control
Legislation, the position of a tenant whose contractual
tenancy has been determined has to be understood in the
light of the provisions of the Rent Acts. Though provisions
of all the Rent Control Acts are not uniform, the common
feature of all the Rent Control Legislation is that a
contractual tenant on the termination of the contractual
tenancy is by virtue of the provisions of the Rent Acts not
liable to be evicted as a matter of course under the
ordinary law of the land and he is entitled to remain in
possession even after determination of the contractual
tenancy and no order or decree for eviction will be passed
against a tenant unless any ground which entitles the
landlord to get an order or decree for possession specified
in the Act is established. In other words, the common
feature of every Rent Control Act is that it affords
protection to every tenant against eviction despite
termination of tenancy except on grounds recognised by the
Act and no order or decree for eviction shall be passed
against the tenant unless any such ground is established to
the satisfaction of the court.
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After considering the definitions of tenant, the
landlord and various other provisions of the Delhi Act as
well as the amendment to the definition of tenant
introduced by the Delhi Rent Control Act Amendment Act (Act
18 of 1976), which gives personal protection and personal
right of continuing in possession to the heirs of the
deceased statutory tenant in respect of residential premises
only and not with regard to the heirs of the so-called
statutory tenant in respect of commercial premises, the
Court observed that the termination of the contractual
tenancy in view of the definition of tenant in the Act does
not bring about any change in the status and legal position
of the tenant, unless there are contrary provisions in the
Act. The Court observed in paragraph 34 of the Judgment :
A tenant of any commercial premises has necessarily
to use the premises for business purposes. Business carried
on by a tenant of any commercial premises may be and often
is, his only occupation and the source of livelihood of the
tenant and his family. Out of the income earned by the
tenant from his business in the commercial premises, the
tenant maintains himself and his family; and the tenant, if
he is residing in a tenanted house, may also be paying his
rent out of the said income. Even if a tenant is evicted
from his residential premises, he may with the earnings out
of the business be in a position to arrange for some other
accommodation for his residence with his family. When,
however, a tenant is thrown out of the commercial premises,
his business which enables him to maintain himself and his
family comes to a standstill. It is common knowledge that
it is much more difficult to find suitable business premises
than to find suitable premises for residence. It is no
secret that for securing commercial accommodation, large
sums of money by way of salami, even though not legally
payable, may have to be paid and rents of commercial
premises are usually very high. Besides, a business which
has been carried on for years at a particular place has its
own goodwill and other distinct advantages. The death of
the person who happens to be the tenant of the commercial
premises and who was running the business out of the income
of which the family used to be maintained, is itself a great
loss to the members of the family to whom the death,
naturally, comes as a great blow. Usually, on the death of
the person who runs the business and maintains his family
out of the income of the business, the other members of the
family who suffer the bereavement have necessarily to carry
on the business for the maintenance and support of the
family. A running business is indeed a very valuable asset
and often a great source of comfort to the family as the
business keeps the family going. So long as the contractual
tenancy of a tenant who carries on the business continues,
there can be no question of the heirs of the deceased tenant
not only inheriting the tenancy but also inheriting the
business and they are entitled to run and enjoy the same.
We have earlier held that mere termination of the
contractual tenancy does not bring about any change in the
status of the tenant and the tenant by virtue of the
definition of the tenant in the Act and the other Rent
Acts continues to enjoy the same status and position, unless
there be any provisions in the Rent Acts which indicate to
the contrary. The mere fact that in the Act no provision
has been made with regard to the heirs of tenants in respect
of commercial tenancies on the death of the tenant after
termination of the tenancy, as has been done in the case of
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heirs of the tenants of residential premises, does not
indicate that the Legislature intended that the heirs of the
tenants of commercial premises will cease to enjoy the
protection afforded to the tenant under the Act. The
Legislature could never have possibly intended that with the
death of a tenant of the commercial premises, the business
carried on by the tenant, however flourishing it may be and
even if the same constituted the source of livelihood of the
members of the family, must necessarily come to an end on
the death of the tenant, only because the tenant died after
the contractual tenancy had been terminated. It could never
have been the intention of the Legislature that the entire
family of a tenant depending upon the business carried on by
the tenant will be completely stranded and the business
carried on for years in the premises which had been let out
to the tenant must stop functioning at the premises which
the heirs of the deceased tenant must necessarily vacate, as
they are afforded no protection under the Act. We are of
the opinion that in case of commercial premises governed by
the Delhi Act, the Legislature has not though it fit in the
light of the situation at Delhi to place any kind of
restriction on the ordinary law of inheritance with regard
to succession. It may also be borne in mind that in case of
commercial premises the heirs of the deceased tenant not
only succeed to the tenancy rights in the premises but they
succeed to the business as a whole.
It has been further held:
It may be noticed that in some Rent Acts, provisions
regulating heritability of commercial premises, have also
been made whereas in some Rent acts, no such provision
either in respect of residential tenancies or commercial
tenancies has been made. As in the present Act, there is no
provision regulating the rights of the heirs to inherit the
tenancy rights of the tenant in respect of the tenanted
premises which is commercial premises, the tenancy right
which is heritable devolves on the heirs under the ordinary
law of succession. The provisions of the Karnataka Rent
Control Act directly came up for consideration before a
Bench of this Court in the case of Vishnu Narayan Gadskari
(Dead) by L.Rs. vs. Paralal Baladev Uza and Ors., 1995
Supp (4) SCC 428, relying upon the aforesaid Constitution
Bench decision and bearing in mind the definition of
tenant in Section 3(r) of the Karnataka Act, the Court
held that the tenant continues to have an estate or interest
in the tenanted premises and the tenancy rights both in
respect of residential premises and commercial premises are
heritable. In the latter decision in Venkatesh Thimmaiahs
case, neither the decision of the Constitution Bench,
referred to supra has been noticed nor the earlier two Judge
Bench decision of this Court on the provisions of Karnataka
Act has been noticed and relying upon the decision of the
Karnataka High Court, without any analysis of the provisions
of the Act, the conclusion of the Forums below that the
premises in question being non- residential, the right of
tenancy therein is not heritable has been upheld. In view
of the law laid down by the Constitution Bench as well as
the earlier decision of this Court in Vishnu Narayan
Gadskaris case, we have no hesitation to hold that the
latter decision in Venkatesh Thimmaiahs case, has not been
correctly decided. In the absence of any contrary
provisions in the Act, it must be held that the tenancy in
respect of a non-residential premises under the Karnataka
Rent Control Act is heritable. The conclusion of the High
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Court to the contrary, therefore, cannot be sustained.
So far as the second question is concerned, it depends
upon the interpretation of Section 21(1)(p) of the Act. The
aforesaid provision is quoted hereinbelow in extenso:
Sec.21(1)(p): that the tenant whether before or
after the coming into operation of this part has built, or
acquired vacant possession of, or been allotted, a suitable
building.
The language of the provision is clear and unambiguous
and given its plain grammatical meaning, it is susceptible
of only one construction that it is only when the tenant has
built or acquired vacant possession of or has been allotted
a suitable building, then only the provisions of Section
21(1)(p) of the Act are attracted and not otherwise. The
expression tenant has been defined in Section 3(r) and
howsoever vide meaning to the said definition be given, it
will not bring within its scope, a partnership firm of which
the tenant himself may be a partner. In the case in hand
the individual namely deceased Gantusa H. Baddi was the
tenant in respect of the premises and application for
eviction had been filed as against him. The so-called
alternative accommodation, has been acquired, admittedly by
a partnership firm, no doubt, consisting of the original
tenant the father and his sons wherein the father has 15%
share but it cannot be held that the said acquisition of
vacant possession is by the tenant. The High Court has
given a peculiar reasoning on consideration of evidence
adduced to the effect that since in the disputed premises,
the business of the firm was carried on, though it had been
tenanted to an individual, the moment a vacant possession
has been acquired by the firm, the liabilities incurred
under Section 21(p) of the Act, we are unable to pursuade
ourselves to agree with the aforesaid conclusion of the High
Court. In our considered opinion, because of acquiring
vacant possession of a building by the partnership firm of
which the tenant may be a partner, the tenant does not
become liable to be evicted by application of Section
21(1)(p) of the Act. It is neither the case of the landlord
in the application for eviction that the tenant namely
deceased Gantusa H. Baddi, has acquired vacant possession
of a building nor has it been proved in course of the
proceeding. That being the position, the conclusion of the
High Court that the tenant has incurred the liability of
having evicted under Section 21(1)(p) of the Act, the moment
a business premises is acquired by the partnership firm is
erroneous and cannot be sustained.
In view of our aforesaid conclusion on both the
questions, this appeal succeeds. The order of eviction
passed by the Revisional Authority and reaffirmed by the
High Court stands quashed. The application for eviction
stands dismissed. There will however be no order as to
costs.