Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12
PETITIONER:
MATTULAL
Vs.
RESPONDENT:
RADHE LAL
DATE OF JUDGMENT23/04/1974
BENCH:
BHAGWATI, P.N.
BENCH:
BHAGWATI, P.N.
PALEKAR, D.G.
CITATION:
1974 AIR 1596 1975 SCR (1) 127
1974 SCC (2) 365
CITATOR INFO :
RF 1976 SC2229 (14)
RF 1980 SC1253 (4)
APL 1988 SC 365 (7)
RF 1988 SC 501 (5)
F 1988 SC1060 (13)
RF 1988 SC1422 (5)
R 1988 SC1531 (46)
F 1989 SC1335 (33)
F 1989 SC1420 (9)
R 1989 SC1933 (28)
ACT:
Madhya Pradesh Accomodation Control Act, 1961--Section
12(1)(f)--Bona fide requirement--Proof of.
High Court--Findings of fact by First Appellate
Court--Jurisdiction in Second Appeal to interfere with
findings of fact.
Fact, questions of--Mixed questions of fact and law--Madhya
Pradesh Accommodation Control Act, 1961, s.
12(1)(f)--Finding on bona fide requirement if question of
fact or mixed question of law and fact.
HEADNOTE:
The respondent-landlord having failed in his attempts to
recover possession of the non residential premises from the
appellant, entered into a lease deed by which he gave a
lease of the premises to the appellant for a period of two
years. After the expiry of the period of lease the
appellant continued in possession as a monthly tenant. Two
years after the expiry of the lease period the respondent
again filed suit for eviction on the ground that the bona
fide required the premises for starting his own business as
a dealer in iron and steel materials, a ground for eviction
recognised by s. 12(1)(f) of the Madhya Pradesh
Accommodation Control Act, 1961. The trial court granted a
decree for eviction. The first appellate Court set aside
the decree for eviction. It came to the finding that the
business of dealer in iron and steel materials which the
landlord wanted to start was a totally new business for him,
that there was no evidence to show that the landlord made
the necessary preparations from which inference could be
drawn that he wanted to start new business, and that for the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 12
nearly two years, after the expiry of the lease, the
landlord did not take any steps to terminate the tenancy.
Therefore, the first Appellate Court held that what the
evidence showed was mere assertion on the fell short of the
proof required. The High Court, in second appeal held that
it was established that the requirement of the landlord was
bona fide. It pointed out that the first Appellate Court had
fallen into an error in holding that unless the respondent
showed that he had made preparations for starting the
business it could not be held that be bona fide required the
premises. The High Court relied on the objective facts that
the respondent had as far back as 1959 sought to recover
possession of the premises for the purpose of the new
business and that having discontinued the business he was
carrying on and surrendered the premises, it was but natural
that the respondent wanted to start this new business. The
High Court thus came to the conclusion that the respondent
had succeeded in establishing that he bona fide required the
premises for the purpose of starting business ,is a dealer
in iron and steel materials.
In appeal by Special Leave to this Court it was contended by
the appellants that in reversing the findings of the First
Appellate Court on the question of bona fide requirement of
the premises by the respondent, the High Court exceeded its
jurisdiction in second appeal; since the finding that the
respondent did not bona fide require the premises for the
purpose of starting his own business was i finding of fact,
it was not open to the High Court to interfere with it
unless it could be shown that it was vitiated by an error of
law. The respondent on the other contended that the finding
in regard to the question of bona ride requirement was a
mixed finding of law and fact and the High Court was,
therefore. entitled to examine its correctness.
Allowing the appeal,
HELD : The High Court exceeded its jurisdiction in second
appeal in reversing the decision of the First Appellate
Court and passing a decree for eviction against the
appellant. [137F]
(1) The issues whether the respondent required the shop for
the purpose of starting new business as a dealer in iron and
steel materials, and, if so, whether his requirement was
bona fide were both questions of fact. Their determination
did not involve the application of legal principles to the
facts established in the evidence. The findings of the
First Appellate Court on these issues were no doubt
inferences from other basic facts, but that did not alter
128
the character of these findings and they remained findings
of fact, Therefore, the conclusion of the First Appellate
Court that the respondent did not bona fide require the shop
premises for the purpose of starting new business as a,
dealer in iron and steel materials represented a finding of
fact and could not be interfered with by the High Court in
second appeal unless it was shown that in reaching it a
mistake of law was committed or that it was based on no
evidence or was such as no reasonable man could reach.
[135F-H]
Sarvate T. B. v. Nemichand, 1966 M.P. Law Journal 26,
followed. (Supreme Court.)
Smt. Kamla Soni v. Rup Lal Mehra, C.A. No. 2150 of 1966,
dec. on 26th September, 1969, not followed. (Supreme Court).
(2) Mere assertion on the part of the landlord that he
requires a nonresidential accommodation in the occupation of
tenant for the purpose of starting or continuing his own
business is not decisive. It is for the court to determine
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 12
the truth of the assertion and also whether it is bona fide.
The word ’requires’ signifies that mere desire on the part
of the landlord is not enough but there should be an element
of need and the landlord must show,. the burden being upon
him, that the genuinely requires the non-residential
accommodation for the purpose of starting or continuing his
own business. The First Appellate Court did not misdirect
itself in regard to these matters. [135G-136C]
(3) The First Appellate Court was clearly in error in
relying on two circumstances, namely, that the respondent
had not made preparations for starting the new business and
that he had asked for possession of the whole of the pre-
mises and not merely a portion of it, in support of the
finding of fact reached by it. But, that would not entitle
the High Court to interfere in second appeal and set aside
this finding of fact so long as there was some evidence to
support it and it could not be branded as arbitrary,
unreasonable or perverse. [136D-E]
(4) There was evidence to sustain the finding of fact
arrived at by the First Appellate Court. The respondent had
been trying to obtain the possession of the premises from
the appellant since as far back as 1952. and it was apparent
that the respondent was anyhow bent upon evicting the
appellant from the premises. The respondent allowed the
appellant to continue as ’a monthly tenant for a period of
two years matter the expiry of the period of lease and did
not take any steps to terminate the tenancy and recover
possession of the shop from the appellant. Moreover, the
respondent had no experience in the business of dealing in
iron and steel materials and it was entirely a new business
so far as he was concerned. These circumstances. borne out
by the evidence on record and held established by the First
Appellate Court clearly supported the finding of fact. Nor
could this finding of fact be said to be arbitrary,
unreasonable or perverse so as to merit interference by the
High Court in second appeal. [136E-137B]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2180 of
1970.
Appeal by special leave from the judgment and order dated
the 14th August, 1970 of the Madhya Pradesh High Court at
Gwalior in Second Appeal No. 48 of 1, 69.
D. V. Patel and S. K. Gambhir, for the appellant.
L. M. Singhvi and Rameshwar Nath, for respondent.
The Judgment of the Court was delivered by
BHAGWATI, J.-It is common to find that having regard to
acute shortage of nonresidential as well as residential
accommodation in the urban areas, litigation between
landlord and tenant for recovery of rented premises is
usually bitterly contested and fought to a finish right upto
the highest court. This is what has happened in the present
case. Twice foiled in his attempt, the respondent filed a
third suit to recover possession of a shop let out to the
appellant. The suit resulted in a decree for eviction by
the Trial Court, but on appeal the decree for eviction was
reversed, by the Additional District Judge and on still
further appeal, the judgment of the Additional District
129
Judge was set aside and the decree for eviction was
restored: by the High Court., The appellant challenges the
judgment of the High Court in this appeal preferred by
special leave.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 12
The respondent is the owner of a house situate in Lohia
Bazar in the city of Gwalior. The house consists of a shop
on the ground floor and residential accommodation on the
first floor. ’The respondent is in occupation of the
residential accommodation on the first floor since the past
few years. The ground floor shop, which may hereinafter for
the sake of convenience be referred to as the Lohia Bazar
shop, has been in the possession of the appellant as a
tenant for the last about thirty years. The appellant
carries on business as a dealer in iron and steel materials
in this shop. Originally the rent of this shop was Rs. 8/-
per month but it was subsequently increased from time to
time and ultimately in 1946 it was fixed at Rs. 25/- per
month.
It appears that towards the end of 1952 the respondent
decided to evict the appellant from the Lohia Bazar shop and
with that end in view, filed a suit for recovery of
possession of Lohia Bazar shop. The respondent claimed that
he genuinely required the Lohia Bazar shop for personal use
and the Trial Court, accepting this requirement, passed a
decree for eviction against the appellant. The decree for
eviction was, however, reversed by the Additional District
Judge in appeal since according to Madhya Bharat Premises
Restriction Act, Sy. 2006, which was in force at the
material time, requirement of the landlord of non-
residential premises for- industry ’or business was not a
valid ground for eviction of the tenant. his suit was
accordingly dismissed by the Additional District Judge on
8th December, 1956.
Within a few months after the dismissal of this suit,
however, the respondent, undaunted by this reverse, filed
another suit against the appellant for recovering possession
of the Lohia Bazar shop. By the time this second suit came
to be filed, the Madhya Pradesh Accommodation Control Act,
1955 had come into force and under the provisions of that
Act a landlord could recover possession of rented premises
from the tenant only on certain specified grounds. One of
the grounds in case of non-residential accommodation was
that the landlord genuinely required the accommodation for
continuing or starting his own business. Now, the
respondent was throughout this period carrying on business
as a grocer in a shop situate in Phalke Bazar which was
taken by him on rent from one Vishwanath. With a view to
availing himself of this ground for eviction under the
Madhya Pradesh Accommodation Control Act, 1955 the
respondent pleaded that the landlord of the Phalke Bazar
shop had given him a notice to quit and he, therefore,
genuinely required the, Lohia Bazar shop for continuing his
grocery business. Before the suit came up for hearing, the
respondent amended the plaint with the leave of the Court in
March 1959 by introducing a plea that he wanted to start
business as a dealer in iron and steel materials and the
Lohia Bazar shop was generally required by him for the
purpose of starting this business. This suit also
followed the same pattern as the earlier
130
one the Trial Court passed a decree for eviction, but it was
reversed in appeal by the Additional District Judge. The
limited ground on which the Additional Judge negatived the
claim of the respondent for possession was that the
respondent was in occupation of the. Phalke Bazar shop
which constituted "other accommodation in the city" and that
on the terms of section 4(h) of the Madhya Pradesh
Accommodation Control Act, 1955, he was disentitled to
obtain a decree for eviction against the appellant. The
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 12
Additional District Judge accordingly dismissed the suit by
a judgment dated 4th August, 1962.
Thereafter, the respondent, having failed in both his
attempts to recover possession of the Lohia Bazar shop from
the appellant, entered into a lease deed dated 15th
September, 1962 with the appellant by which he gave a lease
of the Lohia Bazar shop to the appellant for a period of two
years with effect from 15th September, 1962 at the rent of
Rs. 60/- per month. Though the period of the lease expired
on 15th September, 1964, the appellant continued in posses-
sion of the Lohia Bazar shop as a monthly tenant of the
respondent paying the same rent of Rs. 60/- per month. It
appears that some time in 1964-the exact date does not
appear from the record-the respondent voluntarily
surrendered possession of the Phalke Bazar shop to the
landlord and closed down his grocery business. The ap-
pellant alleged that the, respondent gave up possession of
the, Phalke, Bazar shop to the, landlord in consideration of
receipt of premium in cash but this allegation was held not
established both by the Trial Court as also by the First
Appellate Court. The respondent did not have any other
occupation after he gave up his grocery business.
On 17th August, 1966, after a period of inaction of about
two years, the respondent renewed the fight against the
appellant with added vigour and plunged into the turbulent
waters of litigation by filing a third suit to recover
possession of the Lohia Bazar shop from the appellant.
There were two grounds on which possession of the Lohia
Bazar shop was sought by the respondent. One ground, was
arrears of rent but that was wholly without substance, and
was abandoned at the earliest stage. The second was the
real ground urged on behalf of the respondent and that was
that the respondent bona fide required the Lohia shop for
starting his own business as a dealer in iron and steel
materials. This was a ground for eviction recognised by
section 12(1) (f) of the Madhya Pradesh Accommodation
Control Act, 1961 which had come into force in the meantime
repealing the Madhya Pradesh Accommodation Control Act,
1955. The appellant disputed that the respondent required
the Lohia Bazar shop for starting his own business or that
his requirement was bona fide and alleged that in any event
the respondent had other accommodation in the city and hence
he was not entitled to recover possession of the Lohia Bazar
shop under section 12(1) (f) of the Act of 1961. The Trial
Court on a consideration of the evidence led on behalf of
both the parties came to the conclusion that the respondent
was without any occupation since about two years prior to
the filing of the suit and he had no other shop in the city
in which he could carry on business and he, therefore, bona
fide required the Lohia Bazar shop for starting his own
business as a dealer in iron and steel materials. The Trial
131
Court negatived the plea of the appellant that the
respondent was carrying on business as commission agent and
moneylender and he did not really mean to start a new
business as dealer in iron and steel materials and that was
merely a ruse adopted by him for purpose of securing
possession of the Lohia Bazar shop from the appellant. the
trial Court accordingly upheld the claim of the respondent
for recovery of possession under section 12(1) (f) of the
Act of 1961 and passed a decree for eviction against the
appellant.
The appellant being aggrieved by the decree for eviction
preferred an appeal to the Additional District Judge and
since the Court of the Additional District Judge is the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 12
final court of fact, we would set out the findings of fact
reached by the Additional District Judge in some detail.
The Additional District Judge on an appreciation of the
evidence came to the following findings. The respondent was
about 63 years of age when he filed the suit but that was no
ground for saying that he could not bona fide and reasonably
think of starting a new business. Though it was stated by
the respondent in his evidence that he had in the past
carried on business as a dealer in iron and steel materials,
that was contradicted by his own witness Chotelal and it
was, therefore, evident that the business of dealer in iron
and steel materials for which he claimed to require the
Lohia Bazar shop, was totally a new business for him. The
plea of the respondent was that he wanted to make a humble
beginning in this new business but even so he asked for
possession of the whole of the Lohia Bazar shop and not
merely a portion of it. The respondent had not led any
evidence to show that "he had arranged for necessary capital
to be invested or-approached Iron & Steel Controller for the
required permits" or "made agreements to receive stocks" of
iron and steel materials. There was no material on record
to establish that the respondent had made preparations from,
which inference could be reasonably drawn that, but for
possession of the Lohia Bazar shop, the respondent was in a
position to start the new business. Though the period of
two years for which the lease of the Lohia Bazar shop was
granted by the respondent to the appellant expired on 15th
September, 1964, the respondent did not take any steps to
obtain possession of the Lohia Bazar shop for a period of
about two years and it was only in the middle of 1966 that
he put forward the plea that he wanted to start business as
a dealer in iron and steel materials and required possession
of the Lohia Bazar shop for that purpose. It is true that
the appellant had failed to show that the respondent was
carrying on business as commission agent or moneylender, but
that did not establish the bona fide requirement of the
respondent for possession of the Lohia Bazar shop. It was
also evident that the object of the respondent in filing the
suit was not to obtain enhancement of rent from the
appellant but that too was not a circumstance which lent any
positive support to the case of the respondent. The
burdened of establishing that he bona fide required the
Lohia Bazar shop for starting business as a dealer in iron
and steel materials was on the respondent and this burden,
according to the Additional District Judge held that what
the evidence showed was mere assertion on the part of the
respondent that he wanted to start business as a dealer in
iron and steel materials in the Lohia Bazar shop and that
fell far short of the proof required to establish that the
respondent bona fide required the Lohia Bazar shop for
starting this
132
new business. The Additional District Judge accordingly set
aside the decree for eviction passed against the appellant
and dismissed the suit of the respondent.
This led to the filing of a second appeal in the High Court
by the respondent. The High Court pointed out that the
Additional District. Judge had fallen into an error in
holding that unless the respondent showed that he had made
preparations for starting the business of dealer in iron and
steel materials, such as making arrangements for capital in-
vestment, permits from the Iron,& Steel Controller etc., it
could not be held that he bona fide required the Lohia Bazar
shop for starting such business. The High Court observed
that when the respondent stated in his evidence that he
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 12
required the Lohia Bazar shop for the purpose of starting
business as a dealer in iron and steel materials, there was
no cross-examination of the respondent challenging the truth
or bona fide of his statement and no attempt was made on
behalf of the appellant to show that the respondent was not
in a position to start such business, or that he lacked the
necessary resources for that purpose, and his statement
coupled with the other objective and outward facts must,
therefore, be taken as sufficient to establish that he
required the Lohia Bazar shop for starting this new business
and his requirement was bona fide. The outward and
objective facts on which the High Court relied as supporting
the assertion of the respondent were : firstly, the
respondent had as far back as March 1959 sought to recover
possession of the Lohia Bazar shop for the purpose of
starting this new business and it was not for the first time
in the middle of 1966 that he dishonestly put forward this
idea only with a view to securing possession of the Lohia
Bazar shop from the appellant and secondly, the respondent
having closed down his grocery business and surrendered
possession of the Phalke Bazar shop to the landlord was
without occupation for well nigh two years and it was,
therefore, natural for him to want to start this new
business in the Lohia Bazar shop in order to earn a living.
The High Court thus came to the conclusion that the
respondent has succeeded in establishing that he bona fide
required the Lohia Bazar shop for the purpose of starting
business as a dealer in iron and steel materials and since
he had admittedly no other shop inthe city. he was entitled
to recover possession of the Lohia Bazar shop from the
appellant. On this view the High Court reversed the
judgmentof the Additional District Judge and restored the
decree for eviction passed by the Trial Court. Hence the
present appeal by the appellant with special leave obtained
from this Court.
The main ground on which the appellant attacked the judgment
of the High Court was that, in reversing the finding of the
Additional District Judge on the question of bona fide
requirement of the Lohia Bazar shop by the respondent, the
High Court exceeded its jurisdiction in second appeal. The
jurisdiction of the High Court hearing second appeal,
contended the appellant, was limited only to examining
whether the decision of the Additional District Judge
suffered from an error of law and since the finding of the
Additional District Judge that the respondent did not bona
fide require the Lohia Bazar shop for the purpose of
starting his own business as a dealer in iron and steel
materials was a finding of fact, it was not competent to the
High
133
Court to interfere with it, unless it could be shown that it
was vitiated by an error of law which was not the position
in the present case. This contention of the appellant
requires serious consideration.
It is settled law that the High Court in second appeal
cannot reappropriation the evidence and interfere with
findings of fact reached by the lower appellate court. The
lower appellate court is final so far as findings of fact
are concerned. The only limited ground on which the High
Court can interfere in second appeal is that the decision of
the lower appellate court is contrary to law. It is only an
error of law which can be corrected by the High Court in
exercise of its jurisdiction in second appeal. If the
finding recorded by the lower appellate court is one of law
or of mixed law and fact, the High Court can certainly
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 12
examine its correctness, but if it is purely one of fact,
the jurisdiction of the High Court would be barred and it
would be beyond the ken of the High Court unless it can be
shown that there was an error of law in arriving at it or
that it was based on no evidence at all or %,as arbitrary,
unreasonable or perverse. This position was indeed not
disputed by the learned Advocate appearing on behalf of the
respondent but his contention was that the. finding of the
Additional District Judge in regard to the question of bona
fide requirement of Lohia Bazar shop by the respondent was a
mixed finding of law and fact and the High Court was,
therefore, entitled to examine its correctness, and if it
was found to be wrong, interfere with it even while
exercising jurisdiction in second appeal. The question
which, therefore, arises for consideration is whether the
finding of the Additional District Judge that the respondent
did not bona fide require the Lohia Bazar shop for the
purpose of starting the business of a dealer in iron and
steel materials was a pure finding ,of fact or a mixed
finding of law and fact. If it was the latter, the High
Court would have a much larger freedom to interfere, but not
so if it was the former, in which case only certain limited
grounds would be available to the appellant to attack the
finding.
Now it is obvious that the issues whether the respondent
required the Lohia Bazar shop for the purpose of starting a
new business as a dealer in iron and steel materials and if
so, whether his requirement was bona fide were both
questions of fact. Their determination did not involve the
application of legal principles to the facts established in
the evidence. The findings of the Additional District Judge
on these issues were no doubt inferences from other basic
facts, but that did not alter the character of these
findings and they remained findings of fact. There is,
therefore, no doubt that the conclusion of the Additional
District Judge that the respondent did not bona fide require
the Lohia Bazar shop for the purpose of starting business as
a dealer in iron and steel materials represented a finding
of fact and it could not be interfered with by the High
Court in second appeal unless it was shown that in reaching
it a mistake of law was committed by the Additional District
Judge or it was based on no evidence or was such as no
reasonable man could reach. This was precisely the ground
on which a Bench of four Judges of this Court in
134
Sarvate T. B. v. Nemichand(1) set aside the judgment of the
Madhy; Pradesh High Court which had interfered with the
decree passed by the District Court dismissing a suit for
eviction filed by the landlord against the tenant. The
District Court, sitting as a court of first appeal, had
taken the view, on an appreciation of the evidence, that the
requirement of the premises by the landlord for his
residence was not genuine, but in second appeal the Madhya
Pradesh High Court reversed this finding and passed a decree
for eviction against the tenant. This Court set aside the
judgment of the Madhya Pradesh High-Court on the ground that
the finding reached by the District Court on an appreciation
of the evidence that the landlord did not genuinely require
the premises for his residence was a finding of fact and the
Madhya Pradesh High Court had no jurisdiction in second
appeal to disturb this finding. Shah, J., speaking on
behalf of the Court, summed up the legal position in the
following words :
"The District Court considered the evidence
for the purpose of ascertaining whether the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 12
respondent honestly or in good faith required
the premises and held that the respondent
failed to establish the case pleaded by him.
This finding of the District Court was based
on appreciation of evidence and was binding
upon the High Court and the High Court had no
power to reverse that finding. The
Legislature has imposed a restriction upon the
jurisdiction of the Court to pass a decree
against the tenant in a suit in ejectment by
the landlord; and the onus of proving the
conditions, on proof of which alone the
protection may not be claimed, lies upon the
landlord. The burden of proving that he
genuinely requires non-residential
accommodation within the meaning of section
4(h) therefore lies upon the landlord.
Whether in a given case, that burden is
discharged by the evidence on the record is a
question of fact. It must however be observed
that mere assertion by the landlord that he
requires for his use the premises in the occu-
pation of his tenant raises no presumption
that be genuinely requires the premises for
his use. The District Court held that the
respondent failed to establish
that he
genuinely required the premises in suit
primarily on two grounds-(i) that he had in
the first instance claimed that he required
the promises for his residence and after the
suit was remanded to the trial Court, he set
up the plea that the premises were required
for business purposes and abandoned his
earlier case, and (ii) that the nature and
extent of that business carried on by the
respondent were such that no additional
accommodation could have been honestly claimed
by him. The inference of fact raised by the
District Court was preeminently reasonable.
In any event the High Court has no
jurisdiction in second appeal to set aside the
conclusion reached by the District Court based
on that inference of fact."
(1) 1966 M. P. Law Journal 26.
135
This decision, apart from principle, should conclude the
question, but we find that there is one later judgment of
this Court where a different view seems to have been
expressed. That is the judgment in Smt. Kamla Soni v. Rup
Lal Mehra(i). This case was decided by a Bench of three
judges and the judgment was delivered by Shah,J., who was
one of the, Members of the Bench. The learned Judge,
speaking on behalf of the Court, observed in reference to
section 39(2) of the Delhi Rent Control Act which confers an
identical power on the High Court to interfere only where
there is an error of law
"The argument that the learned Judges of the
High Court exceeded their jurisdiction under
s. 39(2) of the Delhi Rent Control Act, when
they reversed the finding of bona fide
requirement of the appellant, has no
substance. Whether on the facts proved the
requirement of the landlord is bona fide
within the meaning of s. 14 (1) (e) is a
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12
finding on a mixed question of law and fact.
An inference that the requirement of the
appellant in the present case was bona fide
could not be regarded as conclusive."
Now there can be no doubt that these observations made in
Smt. Kamla Soni’s case(1) are plainly in contradiction of
what was said by this Court earlier in Sarvate T. B.’s
case.(2) It is obvious that the decision in Sarvate T.B.’s
case(2) was not brought to the notice of this Court while
deciding Smt. Kamla Soni’s case(1), or else this Court
would not have landed itself in such patent contradiction.
But whatever be the reason, it cannot be gain said that it
is not possible to reconcile the observations in these two
decisions. That being so, we must prefer to follow the
decision in Sarvate T.B.’s case(2) as against the decision
in Smt. Kamla Soni’s case(1) as the former is a decision of
a larger Bench than the latter. Moreover, on principle, the
view taken in Sarvate T.B.’S case(1) commends itself to us
and we think that is the right view. We must, therefore,
hold that the finding of the Additional District Judge that
the respondent did not bona fide require the Lohia Bazar
shop for the purpose of starting business as a. dealer in
iron and steel materials was a finding of fact and not a
finding of mixed law and fact,
The question would still remain whether there
were proper grounds on which this finding of fact could be
interferred with by the High Court. It is now well settled
by several decisions of this Court including the decision in
Sarvate T.B.’s case(2) and Smt. Kamla Soni’s case(1) that
mere assertion on the part of the landlord that he requires
the non-residential accommodation in the occupation of the
tenant for the purpose of starting or continuing his own
business is not decisive. It is for. the court to determine
the truth of the assertion and also whether it is bona fide.
The test which has to be applied is an objective test and
not a subjective one and merely because a landlord asserts
that he wants the non-residential accommodation for the
purpose of starting or continuing his own business, that
would
(1) C. A. No. 2150 of 1966, decided on 26th September,
1969.
(2) 1966 M. P. Law Journal 26.
136
not be enough to establish that he requires it for that,
purpose and that his requirement is bona fide. The word
’required’ signifies that mere desire on the part of the
landlord is not enough but there should be ’an element of
need and the landlord must show the burden being upon him
that he genuinely requires the non-residential accommodation
for the purpose of starting or continuing his own business.
The Additional District Judge did not misdirect himself in
regard to these matters, as for example, by misconstruing
the word ’required’ or by erroneously placing the burden of
proof on the appellant and no error of law was committed by
him in arriving at the finding of fact in regard to the
question of bona fide requirement of the respondent, which
would entitle the High Court in second appeal to interfere
with that finding of fact.
The respondent, however, contended that the finding of the
Additional District Judge that the respondent did not bona
fide require the Lohia Bazar shop for the purpose of
starting new business as a dealer in iron and steel,
materials was vitiated, firstly because he erroneously
assumed that unless the respondent showed that he had made
preparations for starting this new business, such as making
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12
arrangements for capital investment, approaching Iron &
Steel Controller for the required permits, etc., it could
not be said that the respondent bona fide required the Lohia
Bazar shop for such new business, and secondly because he
relied wrongly and unjustifiably on the fact that the
respondent had asked for possession of the whole of the
Lohia Bazar shop and not merely a portion of it. Now there
can be no doubt that ,these two circumstances relied upon by
the Additional District Judge were Wholly irrelevant. It is
difficult to imagine how the respondent could be expected to
make preparations for starting the new business unless there
was a reasonable ’prospect of his being able to obtain
possession, of the Lohia Bazar shop in the near future. It
is a common but unfortunate falling of our judicial system
that a litigation takes an inordinately long time in
reaching a final conclusion and then also it is uncertain as
to how it will end and with what result and unless the
respondent could be reasonably sure that be would within a
short time be able to obtain possession of the Lohia Bazar
shop and start a new business, it would be too much to
expect from him that lie should make preparations for
starting the new business. Indeed from a commercial and
practical point of view, it would be foolish on his part to
make arrangements for investment of capital, obtaining of
permits and receipt of stock of iron and steel materials
when he would not know whether he would at all be able to
get possession of the Lohia Bazar shop, and if so, when and
after how many years. So also we do not see how the
respondent could possibly ask for possession of a portion of
the Lohia Bazar shop. The Lohia Bazar shop was given on
rent under a single tenancy and even if the requirement of
the respondent extended only to a portion of this shop, he
had no other option but to terminate the tenancy and seek to
recover. Possession of the: whole shop. The Additional
District judge was,therefore, clearly in error in relying on
these two circumstances in. support of the finding of fact
reached by him. But that would not entitle the High Court
to interfere in, second appeal
137
and set aside this finding of fact so long as there was some
evidence to support it and it could not be branded as
arbitrary,’ unreasonable or perverse. There is no doubt
that here there was evidence to sustain the finding of fact
_ arrived at by the Additional District Judge. The
respondent had been trying to obtain possession of the Lohia
Bazar shop from the appellant since as far back as 1952 and
it was apparent that the respondent was any how bent upon
evicting the appellant from the Lohia Bazar shop. Though
the period for which the lease was granted by the respondent
to the appellant expired on 15th September, 1964, the
respondent allowed the appellant to continue as a monthly
tenant in respect of the Lohia Bazar shop and did not, for a
period of about two years, take any steps to terminate the
tenancy of the appellant and recover possession of the Lohia
Bazar shop from the appellant. If the respondent was really
serious about starting the new business of a dealer in iron
and steel materials, he would not have waited for a period
of two years before taking action to recover possession of
the Lohia Bazar shop from the, appellant. He would have
bestirred himself immediately as soon as the lease, which
prevented him from asking for possession, expired.
Moreover, the respondent had no experience in the business
of dealing in iron and steel materials and it was entirely a
new business so far as he was concerned, and it would indeed
be strange and unusual-taxing the credulity of the Court-
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12
that the respondent, which was all his life a grocer, should
at the age of 63 years, want to start a new business as a
dealer in iron and steel materials a business in which he
had no experience at all. These circumstances, borne out by
the evidence on record and held established by the
Additional District Judge, clearly supported the finding of
fact reached by the Additional District Judge that the
respondent did not bona fide require the Lohia Bazar shop
for starting business as a dealer in iron and steel mate-
rials. Nor could this finding of fact-be said to be
arbitrary, unreasonable, or perverse so as to merit
interference by the High Court in second appeal. There can,
therefore, be no doubt that the High Court in reversing the
decision of the Additional District Judge and passing a
decree for eviction against the appellant.
We, therefore, allow the appeal, set aside the decree for
eviction passed by the High Court against the appellant and
dismissed the suit of the respondent. There will be no
order as to costs all throughout.
Appeal allowed.
K.B.N.
138