Full Judgment Text
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PETITIONER:
D. N. SANGHAVI & SONS
Vs.
RESPONDENT:
AMBALAL TRIBHUWAN DAS
DATE OF JUDGMENT09/01/1974
BENCH:
DWIVEDI, S.N.
BENCH:
DWIVEDI, S.N.
GOSWAMI, P.K.
CITATION:
1974 AIR 1026 1974 SCR (3) 55
1974 SCC (1) 708
CITATOR INFO :
RF 1987 SC 857 (5)
RF 1987 SC2199 (2)
RF 1992 SC2166 (4)
ACT:
Madhya Pradesh Accommodation Control Act 1961, Sec. 12 (1)
(f)--Its scope--The expression, ’His business’--Meaning of.
HEADNOTE:
The respondent is the owner of the suit premises. The
appellants 2 to 4 are carrying on the business in the name
of the first appellant, D. N. Sanghavi & Sons. They are
tenants of the Respondent and using a part of the premises
as their residence. The respondent sued the appellant for
eviction on the ground that he needed the accommodation for
continuing "his business" within the meaning of S.12 (1) (f)
of the Madhya Pradesh Accommodation Control Act 1961. The
questions for decision in the case are as follows :-(i) What
is the meaning of the phrase "his business" in s. 12 (1) (f)
and (ii) Whether in the circumstances of the case, the busi-
ness for which he required the accommodation could be said
to be "his business." The first question arose because he
wanted the accommodation for continuing the business of a
partnership firm of which he was one partner and the other
two partners were his brothers.
The Trial Court held against the respondent and dismissed
the suit, but the appeal court reversed the judgment and
decreed the suit for ejectment of the appellants. On
appeal, the High Court upheld the judgment of the appeal
Court and hence the appeal before this Court.
Allowing the appeal,
HELD : (1) The meaning of the expression "his business" in
s. 12 (1) (f) of the Madhya Pradesh Accommodation Control
Act 1961, is to be determined by examining the object of the
Act and the setting of the phrase "his business."
(2) The direct and immediate object of the Act is to ensure
occupation of accommodation by them who are in need of it.
Broadly speaking, a. construction which fulfils this purpose
should be preferred to the alternate construction which
frustrates it.
(3) A review of the provisions of the Act would show that
the Act is more strict with respect to the eviction of a
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tenant from a nonresidential accommodation than from a
residential accommodation. The landlord cannot sue for
eviction of a tenant from a non-residential accommodation
where he needs it for continuing or starting his major
married daughter’s business or his brother’s business.
Therefore, section 12 (1) (b) is protective of the tenant
and should not receive a wide construction as to the class
of persons who may be included in the possessive pronoun
’his’ in the phrase ’his business’, for it would be against
legislative policy.
(4) The words "for the purpose of continuing or starting
his business" in Sec. 12 (i) (f) should be amplified to read
as "for the purpose of his own occupation by way of
continuing or starting his business". This amplification is
necessarily implied. Therefore, it is necessary for the
respondent to prove that the accommodation is needed
directly and substantially for his occupation for the
purpose of continuing or starting his business. From the
evidence, it is not clear whether the respondent was merely
a sleeping partner or an active partner. In absence of any
proof that the accommodation is exclusively required
directly and substantially for his occupation for the
purpose of continuing or starting his business, the suit
must fail.
Rajniklal and Co. v. Vithal Pandurang Kawade and another, A.
1. R. 1952 Nagpur 312; Tansukhdas Chhaganlal v. Smt.
Shambai, A. 1. R. 1954 Nagpur 160, Commissioner of Income-
tax, West Bengal v. A. W. Figgies and Co., [1954] S.C.R.
56
171, Dulichand Lakshminarayan v. The Commissioner of Income-
tax, Nagpur, [1956] S.C.R. 154, Karasandas Ramji v. Karsanji
Kalyanji, A.I.R. 1953 Saurashtra 113 and Gundalapalli
Rangamannar Chetty v. Desu Bangiah, A. I. R. 1954 Madras
182, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1643 of 1967
Appeal by special leave from the judgment and Order dated
4th September, 1967 of the Madhya Pradesh High Court (Indore
Bench) at Indore in Second Appeal No. 288 of 1967.
M. V. Phadke a if A. G. Ratnaparkhi, for the appellants.
D . V. Patel A. T. M. Sampath, M. M. L. Srivastava and E.
C.,Agarwala, for the respondent.
The Judgment of the Court was delivered by
DWIVEDI, J. The facts of this case fall within a short
compass. The respondent, Amba Lal Tribhuwan Das, is the
owner of the suit accommodation. It is situated in
Siyaganj, Indore. The appellants 2 to 4 are carrying on
business in the name of the first appellant, D. N. Singhavi
aid S).13. They are the tennants of the accommodation.
Courts below have held that it was being used predominantly
as a shop by them and that a part of it was being used by
them as their residence for the sake of more of efficient
conduct of the business they were carrying on in the shop.
The respondent purchased the shop some time in 1953. The
appellant were then carrying on their business in the shop.
They attorned to the respondent. On October 10, 1964 the
respondent give the requisite notice to them to vacate. On
November 16, 1964 he instituted a suit for their ejectment
from the accommodation. It was alleged by him that he
needed the accommodation for continuing "his business"
within the meaning of s. 12 (1) (f) of the Madhya Pradesh
Accommodation Control Act, 1961 (hereinafter called the
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Act). At the evidence stage he gave evidence that it was
needed for partnership business. There arose two crucial
questions in the case: (1) What is the meaning of the
phrase "his business" in s. 12(1)(f)? (2) Whether in the
circumstances of the case the business for which he required
the accommodation could be said to be "his business". The
first question arose because he wanted the accommodation for
continuing the business of a partnership firm of which he
was one partner. There were two other partners. They are
his brothers. The trial court held against the respondent
on the second issue and dismissed the suit. No view was
expressed on this issue. The respondent filed an appeal
from the judgment. The appeal court reversed the judgment
and decreed the suit for ejectment of the appellants. The
appeal court recorded this filling of fact........ Ambalal
(plaintiff) has stated...... that the partnership shop was
previously run by his father. It is now run by the brothers
in partnership. This business is thus of the family alone.
Their shop? is at Siyaganj itself where the premises in suit
are situate." On this finding the appeal court reached the
conclusion that the business of the partnership firm, of
which he is one partner is "his business"
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within the meaning of s. 12(1)(f). As the firm’s business
was being carried on in a rented premises, his need was
found to be genuine. The appellants then filed an appeal in
the Madhya Pradesh High Court from the judgment of the
appeal court. The High Court has upheld, the judgment of
the appeal court. It is noteworthy that the appeal court
has simply assumed that the partnership business is "his
business". No reasonings are given in support of the
conclusion. The High Court agreed with the appeal court
that the firm’s business of which the respondent was one
partner is "his business". The reasoning of the High Court
in support of this conclusion is summed up in the following
passage in the judgment: "In the present case what we are
concerned with is whether the landlord can be said to have
the necessity when the need was for the partnership firm.
It cannot be doubted that when a person runs a business in
partnership with others he does it for himself and therefore
his necessity is identified with the necessity of the firm.
’Whether he wants to do business himself or he does it along
with others still remains that he needs it for his
own purpose."
It is evident from this passage that the High Court, like
the appeal court, has overlooked the words of s. 12(1)(f) in
arriving at its conclusion. The High Court considered that
it is an elementary proposition of law that a partnership
business is the business of each and every partner so that
it will be "his business." It seems that the High Court was
misled by the apparent meaning of this phrase so that the
necessity of examining the scheme of the Act and the setting
of clause (f) of s. 12(1) to discover its real meaning was
not felt at all. But this is the first thing on which the
High court should have fixed attention. After all, it is a
matter of statutory construction. And in such a case all
attempts at construction should converge on the statute at
hand, lest the reasoning should become abstract and
artificial, having no contact with reality. The High Court
has ought support from a decision of the erstwhile Nagpur
High Court. (Rajniklal and Co. vs. Vithal Pandurang Kawade
and another)(1). Here again, the High Court did not take
care to Notice the similarities and dissimilarities between
the law which fell or consideration in that case and the law
which falls for construction this appeal.
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With these preliminary comments, we pass on to the real
issue What does "his business" mean in s. 12(1)(f)? The
meaning is to be determined by examining the object of the
Act and the setting of the phrase "his business". The Act
deals with the difficult problem of scarcity of
accommodation and seeks to distribute accommodation in a
fair way amongst those who need.
The Act professes to control letting and rent of
accommodation and the eviction of tenants therefrom. The
Act restricts the power of the landlord to let and to rack-
rent at will. It also restricts his power to eject the
tenant at will. Thus the direct and immediate object of the
Act is to ensure occupation of accommodation by them who are
in need of it. Broadly speaking, a construction which
fulfils this purpose should be preferred to the alternative
construction which furstrates it.
1.A.I.R. 1952 Nagpur 312.
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Chapter III controls eviction of tenants. Section 12 is the
first provision in this Chapter. We are now reading the
material portions of s. 12 :
"Section 12(1)(e) : that the accommodation let
for residential purposes is required bonafide
by the landlord for occupation as a residence
for-himself or for any member of his family,
it he is the owner thereof, or for an
y person
for whose benefit the accommodation is held
and that the landlord or such person has no
other reasonably suitable residential
accommodation of his own in his occupation in
the city or town concerned
(f) that the accommodation let for non-
residential purposes is required bonafide by
the landlord for the purpose of continuing or
starting his business or that of any of his
major sons or unmarried daughters if he is the
owner thereof or of any person for whose
benefit the accommodation is held and that the
landlord or such person has no other
reasonably suitable non-residential
accommodation of his own in his occupation in
the city or town concerned;
(4) where a landlord has acquired any
accommodation by transfer, no suit for the
eviction of tenant shall be maintainable under
sub-s. (1) on the ground specified in clause
(e) or clause (f) thereof, unless a period of
one year has elapsed from the date of the
acquisition.
(5) where an order for the eviction of a
tenant is made on the ground specified in
clause (e) of sub-section (1), the landlord
shall not be entitled to obtain possession
thereof before the expiration of a period of
two months from the date of the order.
(6) where an order for the eviction of a
tenant is made on the ground specified in cl.
(f) of sub-section (1), the landlord shall not
be entitled to obtain possession thereof-
(a) before the expiration of a period of two
months from the date of the order : and
(b) if the accommodation is situated in ....
Indore.... unless the landlord pays to the
tenant such amount by way of compensation as
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may be equal to......
(i) double the amount of the annual standard
rent of the accommodation in the following
cases:
(a) where the accommodation has for a period
of ten complete years immediatly preceding the
date on which the landlord :files a suit for
possession thereof, been used for business
purposes or for any other purpose along with
such purposes, by the tenant who is being
evicted.
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(b) where during the aforesaid period of ten
years, the tenant carrying on any business in
the accommodation has left it and the tenant
immediatly succeeding has acquired the
business
of his predecessor either through transfer or
inheritance.
(ii) the amount of the annual standard rent
in other cases."
Section 17 provides that where, after ejecting the tenant,
the landlord does not occupy the accommodation within two
months of obtaining possession, or transfers or relets it
within two years thereof, the rent Controlling Authority
may, on an application made in this behalf by the evicted
tenant, direct the landlord to put him in possession of the
accommodation or to pay him such compensation as the Rent
Controlling Authority may think fit. This compensation
shall be over and above the compensation which has already
been paid to the tenant under s. 12(6). In a similar way,
section 18 provides that where the landlord has ejected the
tenant for the purpose of repairing of rebuilding the
accommodation and does not commence the work of repairing or
rebuilding within one month of the date specified in the
order for ejectment or fails to complete the work in a
reasonable time or having completed the work fails to place
the tenant in occupation of the accommodation, the court
may, on an application made in this behalf by the tenant,.
direct the landlord to give possession to the tenant or to
pay to him such compensation as the court may think fit.
Section 39(1) requires the landlord to inform the Collector
whenever any accommodation has fallen vacant or is likely to
fall vacant The Collector may then direct him to let or not
to let it in accordance with the provisions of the Act.
Section 39(2) gives preference to certain class of persons
in the matter of letting. It is not necessary to mention
them here. But the first proviso to s. 39(2) is important
for this case. It reads : "Provided that if the landlord
has in the information given...... under s. (1) stated that
he needs the accommodation for his own occupation, the
Collector..... shall, if satisfied after due inquiry that
the accommodation so needed is proper, direct the landlord
to.. occupy the same under the proviso the accommodation may
be allotted to the landlord if he makes out a case that he
needs the accommodation for "his own occupation".
A review of these provisions would show that the Act is more
strict with respect to the eviction of tenant from a non-
residential accommodation than from a residential
accommodation. In the case of a residential accommodation,
section 12(1) (e) provides for the eviction of a tenant
where it is needed for the residence of the landlord or for
any member of his family. But he cannot sue for eviction of
a tenant from a non-residential accommodation where he needs
it for continuing or starting his major married daughter’s
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business. Nor he can evict a tenant from such accommodation
for continuing or starting his brother’s business. Thus
while
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Cl. (e) of s. 12(1) is more hospitable to the landlord,
cl.(f) thereof is more protective of the tenant. Sub-
section (4), (5) and (6) of s. 12 also point to this
contrast. While the tenant evicted from a residential
accommodation gets a respite of 14 months, the tenant
evicted from a non-residential accommodation gets not only
the said respite but also the prescribed compensation. In
many cases the burden of compensation may act as a deterrent
to eviction. Having regard to the rigour of cl.(f) of s.
12(1) we think that the phrase"his business" should not
receive a wide, construction as to the class of persons who
may be included in the possessive pronoun ’his’ in the
phrase, for it would be against legislative policy.
Section 39 controls the letting of an accommodation,
residential as well as non-residential, which has fallen
vacant or is likely to fall vacant. The first proviso to
sub-section (2) of s. 39 provides that at the request of the
landlord such accommodation may be allotted to him if he
needs it "for his own occupation." As section 39 deals with
a residential as well as a non-residential accommodation.
the expression "his own occupation" in the first proviso
should be amplified to read as "his own occupation by way of
residence or business". Clauses (e) and (f) of s. 12(1) are
complementary to the first proviso to s. 39(2). While the
first proviso enables the landlord to obtain possession of a
vacant accommodation for his own occupation by way of
residence or business, section 12(1) (e) enables him to
obtain a residential by accommodation for his or his
family’s residence by ejecting a tenant. Similarly, s.
12(1) (f) enables him to obtain a nonresidential
accommodation for continuing or starting "his business" by
ejecting the tenant. Considering the complimentary nature
of s. 12(1) (f), we have little doubt in our mind that the
words "for the purpose of continuing or starting his
business" in the section should be amplified to read as "for
the purpose of his own occupation by way of continuing or
starting his business." It cannot be legitimately complained
that we are trying to redraft cl. (f). This amplification
is necessarily implied, for we think that the legislature
intended to use the phrase "for the purpose of continuing or
starting his business." as a synonym for the phrase "for his
own occupation" in the first proviso to s. 39(2) as
explained earlier. The words "in his occupation" at the end
of cl. (f) fortify our construction. Again, the word "own"
in the phrase "his own occupation" should not be discarded
as redundant. It seems to us that the Legislature has
deliberately used it to add emphasis to the possessive force
of the pronoun "his". (see the Shorter Oxford-Dictionary,
3rd Edn. P. 1409) it connotes the idea that the
accommodation is needed directly and substantially for his
occupation.
On this construction of cl. (f) of S. 12(1), it is necessary
for the respondent to prove that the accommodation is needed
directly and substantially for his occupation for the
purpose of continuing or starting his business.
The respondent has stated in his evidence that he and his
two brothers are carrying on a partnership business in a
rented shop in
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Siyaganj. He has further said that he needs the suit
accommodation for that purpose. The appeal court has
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believed this evidence and has recorded the finding that the
respondent bonafide requires the accommodation for his
partnership business. But this finding does not fulfil the
conditions of cl. (f) of s. 12(1) as construed by us.
Unfortunately for him, the respondent did not lead any
evidence to show that the accommodation was needed directly
and substantially for his occupation by way of business. He
filed the registration certificate showing that the
partnership was registered with the Registrar of Firms. The
certificate will only prove as to who are the partners of
the firm. nothing more The respondent did not file the
deed of partnership’ It would have disclosed whether the
respondent is a mere sleeping partner or a partner who is
entitled to manage the business either solely or with other
partners, or that they are the sole managing partners.
In his examination he has said that he was a partner in the
firm, He, has also said : "There is no proper accommodation
for carrying on business in Indore by the members of his
family " In Cross-examination he has said : "In the members
of my family there are two of my brothers Nand Kishore and
Mani Lal their wives and children, and my mother are
included For our residence and running the shop we need the
disputed shop." No doubt he has stated that he needs the
suit accommodation for his residence also. but the lower
courts did not examine the need for residence. Before the
appeal court counsel for the parties had stated that the
suit for eviction of the tenant should be disposed of only
on the basis of ’ s. 12(1) (f). The respondent thus.
abandoned his case based on s. 12 (1) (e) which deals with
residential, accommodation. So we are concerned with his
need for business, accommodation. The passage in his
statement, earlier reproduced would seem to suggest that his
notion of ’his business’ is inclusive of his brothers’
business in which he may have no concern at all, So the
possibility of his brothers’ separate business being set up
in the suit accommodation is not ruled out. However, we do
not ground our judgment on this statement. In his evidence
he has said : "’Ale, the three brothers and father are the
partners in the shop. There is no person from outside.
Before the partnership my father used to run the shop. (The
father died during pendency of the suit)". He also said :
"We deal in bidi, cigarettes, matches, tobacco and soap.,_
WC also want to have the same business in the disputed
shop." In_, neither of these two passages nor anywhere else
in the evidence he has stated that on the terms of
partnership he, is entitled to manage, the partnership
business or even that he would also occupy the suit
accommodation along with his partners on obtaining
possession from the appellants. He has also not said that
the other partners have agreed to shift the business.
if the deed of partnership I has excluded him expressly or
impliedly from the management of firm’s business and has
made him a sleeping partner, it cannot be held that the
accommodation is needed directly and substantially for his
occupation by way of business. Nor he has
62
power to shift the business. To sum up, for the reasons
already given, his suit should fail.
Counsel have referred us to a large number of decisions.
Such of them as appear to us to be relevant in this case
will alone be noticed by us. We shall make no reference to
the others.
In Rajniklal and Co. (supra) the decision turned on the
meaning of the phrase "business of his own" in cl.
13(3)(vi)(c) of the C.P. and Berar Letting of Houses and
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Rent Control Order, 1947. The Nagpur High Court confined
itself to that single phrase and did not refer to the object
and setting of the order. In our case the conditions of s.
12(1)(f), as construed by us, are apparently different from
those of cl. 13(3)(vi)(c) of the order. So it is not
helpful in this case.
In Tansukhdas Chhaganlal vs. Smt. Shambai(1), the Nagpur
High Court has held that where a tenant carrying on
business in the demised shop converts the business into a
partnership business and allows the latter business to be
carried on in the demised premises, it would amount to sub-
letting because the partnership "was clearly a personality
in law distinct from that of the petitioner himself" There
also, the High Court was concerned with cl. 13 of the
aforesaid Order. This statement of law does not appear to
be universally true. However, as pointed out earlier, in
respect of Rajniklal (supra) it is sufficient for us to my
that this case also is not helpful in this appeal.
Commissioner of Income-tax, West Bengal vs. A. W. Figgies
and Co. (2) and Dulichand Lakshminarayan vs. The
Commissioner of Income-tax Nagpur(3) are concerned with the
legal character of a firm in the Income-tax Act. It is held
that a firm is a distinct entity different from its partners
for purposes of assessment. These decisions are based on
particular provisions of that Act which are radically
different from the provisions of the Act. So these cases
are also not helpful in deciding the present appeal.
Karsandas Ramji vs. Karsanji Kalyanji(4) and Gundalapalli
Rangamannar Chetty vs. Desu Rangiah(5) discuss the very
question which fell consideration in Tansukhdas Chhaganlal
(supra). It was held on the facts of these cases that the
tenant could not be held to have sublet the rented premises
to the partnership firm because they retained possession
over the premises. These cases thus apply the test of occu-
pation by the tenant in finding out whether he has or has
not sub-let. These are all the relevant Indians cases cited
before us. Sri Patel has also relied on three English
cases: (1) Clift. v. Taylor,(6) Tunstall v. Steigamann( 7)
and Gian Singh & Co. vs. Devraj Narar and Others. (8) Clift
takes the same view as Rajniklal (supra). The decision
turned on the meaning of the expression "required the
premises for his own occupation" in s. 5(3)(b)(i) of the
Landlord and Tenant Act, 1927. There the landlord carried
on a business in a part of the building in
(1) A.I.R. 1954 Nagpur 160.(2) [1954] S.C.R. 171.
(3) [1956] S.C. R. 154. (4) A.I.R. 1953 Saurashtra 113.
(5) A.I.R. 1954 Madras 182.(6) [1948] 2 A.E.R. 11 3.
(7) [1962] 2 A.E.R. 417.(8) [1965] 1 A.E.R. 768.
63
dispute; in another part of it the tenant carried on her
business. On the eve of the expiry of her lease, she
applied for a new lease. Her application was opposed by the
landlord on the ground, inter alia, that he required the
premises for his own occupation. The facts found were that
he had converted his own business into a partnership
business. There were six partners including himself. The
partnership business had extended considerably so that there
was scarcity of accommodation. It appeared that the
landlord needed the demised premises for the purpose of his
partnership business. So the issue was whether he needed
the premises "for his own occupation." The finding was: "The
firm and he himself, as its senior partner, had great need
for less cramped .head office premises, and, in particular,
for the free and full use of the ground floor on street
level as essential to convenience of office work, for
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clients, and for display of notice etc., and indeed, it was
necessary for the prosperity of the greatly enlarged and
still growing business with its ramifications into many
allied or compatible departments or activities." It is
evident from this finding that the landlord was a managing
partner and that he himself along with the firm was to
occupy the demised premises after getting possession. This
decision, far from helping Sri Patel, helps the appellants
in view of the construction placed by us on clause (f) of s.
12(1). Tunstall (supra) deals with an entirely different
set of facts. There the landlord was carrying on business.
She gave notice to the tenant that she wanted the rented
shop for her own business. The notice was given under the
Landlord and Tenant Act. 1954. In the meantime she
transferred her business to an incorporated company. The
relevant words of s. 31(g) of that Act are : "to occupy the
holding for the purpose.... of the business to be carried on
by the landlord." It was held that the business of an
incorporated company was not the business of the landlord
the company being a distinct legal person different from the
landlord. Gian Singh (supra) was concerned with the
construction of a particular clause in a covenant forbidding
the tenant from assigning his tenancy to a third person. It
is claimed by the landlord that the tenant has assigned the
premises to a partnership firm of which he was a partner.
On the facts of the case, it was held that there was no
assignment. We fail to appreciate how these cases help
Sri Patel.
In some of the cases cited by Sri Patel, ’own’ has been
interpreted virtually as otiose. Nevertheless what it means
in the Act would depend on its own context, for a word may
take a colour from its context.
In view of our decision against the respondent on the basis
of the construction of s. 12(1)(f) it is not necessary for
us to decide several other points raised by Sri Phadke.
The appeal is allowed with costs (one set only). The
decision of the courts below are set aside and the suit of
the respondent is dismissed.
S.C.
Appeal allowed.
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