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Shankarlal Ramratan Shet v. Pandharinath Vishnu Phatak

Bombay High Court
Jan 22, 1951
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Smart Summary (Beta)

Structured Summary of Opinion (Bhagwati, J.)

Factual and Procedural Background

The plaintiff owned a house (City Survey No. 1991) that comprised business premises. The plaintiff had granted the defendant a lease for about five years ending on 4 November 1945. The defendant continued in possession after the lease expired. Two-thirds of the premises had been requisitioned by the Government; the defendant occupied the remaining one-third.

On 18 June 1946 the plaintiff sued for possession of the one-third in the defendant's actual possession, claiming he required the premises for his own use and occupation. The defendant resisted, denying the plaintiff's requirement.

The trial Court (Assistant Judge, Jalgaon) held that Bombay Act LVII of 1947 applied but found the plaintiff had not required the premises reasonably and bona fide and dismissed the suit on 19 April 1948. The plaintiff appealed. The lower appellate Court concluded that Bombay Act VII of 1944 applied, found that Act did not protect business premises, and therefore decreed the plaintiff's claim without considering the bona fide requirement. The defendant (appellant in the second appeal) filed this second appeal against the lower appellate Court's decision.

Legal Issues Presented

  1. Which statutory regime governed the pending suit when Bombay Act LVII of 1947 came into force on 13 February 1948: Bombay Act LVII of 1947 or Bombay Act VII of 1944?
  2. If Bombay Act LVII of 1947 applies, whether the plaintiff required the suit premises reasonably and bona fide for his own occupation (a condition relevant to the plaintiff's right to possession under the Act)?
  3. As a subsidiary issue under s. 13(2) of Bombay Act LVII of 1947, whether having regard to all the circumstances (including availability of other reasonable accommodation) greater hardship would be caused by passing the decree than by refusing it.
  4. Whether, within the meaning of s. 13(1)(b) of Bombay Act LVII of 1947, the defendant had erected a permanent structure on the premises without the plaintiff's written consent (an issue raised by the parties and argued before the Court).

Arguments of the Parties

Appellant's (Defendant's) Arguments

  • It was urged (by Mr. R. B. Kotwal for the appellant) that the Government, which had requisitioned two-thirds of the premises, were necessary parties to the suit.
  • It was also contended that a suit could not lie for possession of only one-third of the property that had been the subject-matter of the original lease.
  • The defendant maintained in pleadings (and in reply to an application by the plaintiff) that he had not constructed any permanent structure on the premises; he denied that fixing a compression machine in the earth or electric fittings of a petrol pump amounted to erection of a permanent structure.

Respondent's (Plaintiff's) Arguments

  • The plaintiff claimed the one-third in the defendant's occupation for his own use and occupation, i.e., that he required those premises reasonably and bona fide.
  • On the question of permanent structures, the plaintiff (as presented by Mr. Dharap for the respondent) relied on the plaintiff's earlier application and the defendant's admissions in notices to argue that the defendant had erected permanent structures (compression machine and electric fittings) without written consent.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
M. & S.M Railway v. Bezwada Municipality Cited for the normal rule of interpretation of a proviso: that a proviso ordinarily excepts and deals with a case which would otherwise fall within the main enactment and does not alter clear and unambiguous language of the main enactment. The Court invoked this principle but explained that where a proviso in clear and explicit terms enacts a substantive provision (conferring benefits beyond the main enactment) it cannot necessarily be controlled by the language of the main enactment; thus the proviso to s. 50 was treated as substantive and applicable.
Shivaraj Rupchand Shedji v. Abdul Ajij Referred to as a supporting authority where a similar point arose and the learned Chief Justice reached a like conclusion about the substantive effect of a proviso. The Court relied on this judgment to fortify its conclusion that the proviso to s. 50 of Bombay Act LVII of 1947 enacted a substantive provision benefiting tenants and therefore made the 1947 Act applicable to suits pending when it came into force.

Court's Reasoning and Analysis

The Court proceeded through a stepwise legal analysis rooted strictly in the language of the statute and the record:

  1. Requisition and Parties: The Court rejected the submission that the Government (which had requisitioned two-thirds of the premises) were necessary parties. It held that requisitioning vests tenancy rights in the Government vis-à-vis the tenant but does not create privity of estate between landlord and Government such as to require impleading the Government in an ejectment suit against the tenant. Even if the Government had become a sub-tenant hypothetically, that would not compel making them a party.
  2. Suit for Part of Demised Premises: The Court explained the landlord's right on termination of lease is to delivery of possession given over by the tenant. If the tenant can deliver only part of the demised property (because the remainder is under requisition), the landlord is still entitled to sue for and obtain possession of that portion which the tenant is able to deliver. Accordingly, a suit for one-third was maintainable.
  3. Statutory Construction — s. 50 of Bombay Act LVII of 1947: The central question was whether pending suits should be governed by the new Act (LVII of 1947) or by the earlier Bombay Act VII of 1944. The Court examined s. 50, which repealed the earlier Rent Restriction Act (Bombay Act XVI of 1939) and the 1944 Act, and considered the proviso to s. 50 which expressly provided that suits and proceedings between landlord and tenant relating to recovery or fixing of rent or possession of premises to which Part II applies, and which are pending, shall be transferred and continued before courts which would have jurisdiction under the new Act and "thereupon all the provisions of the Act and the rules made thereunder shall apply to all such suits and proceedings."
  4. Definitions and Part II Coverage: The Court relied on the definition of "tenant" in s. 3(11) (which includes persons remaining in possession after determination of the lease) and on s. 6(1) (Part II applies in specified areas to premises let for residence, education, business, trade or storage). Since Part II covers business premises in the specified areas, the proviso to s. 50 made the 1947 Act applicable to pending suits concerning such premises.
  5. Effect of the Proviso: Although the normal rule (citing M. & S.M Railway v. Bezwada Municipality) is that a proviso is limited to excepting cases from the main enactment, the Court held that where a proviso in clear and explicit terms enacts a substantive provision — as the proviso to s. 50 did by extending the benefits of the 1947 Act to pending suits including business premises — it cannot be confined or nullified by the main repealing provision. The Court treated the proviso as substantive in effect and therefore concluded that Bombay Act LVII of 1947 applied to the plaintiff's pending suit on 13 February 1948.
  6. Mistake by Lower Appellate Court: Because the lower appellate Court applied Bombay Act VII of 1944 (which excluded business premises) and did not consider the proviso's substantive effect, its conclusion that the 1944 Act applied was incorrect; the trial Judge's finding that the 1947 Act applied was correct.
  7. Lack of Determination on Bona Fide Requirement: The appellate record contained no finding by the lower appellate Court on whether the plaintiff required the premises reasonably and bona fide for his own occupation (an issue the trial Court had decided against the plaintiff). Because that issue was unresolved at the appellate level, the Court declined to decide the matter itself.
  8. Remand Direction: The Court determined that the appropriate remedy was to set aside the decree of the lower appellate Court and remit the matter to it with directions to consider the trial evidence on whether the plaintiff required the premises reasonably and bona fide and to record findings. The lower appellate Court was also directed to consider the subsidiary s. 13(2) question — whether greater hardship would be caused by passing the decree — and dispose of the appeal according to those findings.
  9. Permanent Structure Issue (s. 13(1)(b)): The respondent asked the Court to direct inquiry into whether the defendant had erected permanent structures without written consent. The Court declined to direct remand on this issue, concluding that fixing a compression machine in the earth and electric fittings for a petrol pump may be fixtures but are not "permanent structures" for this purpose. It noted that remanding on that narrow factual point would cause delay and would not serve the ends of justice.
  10. Final Procedural Dispositions: The Court allowed the appeal, set aside the lower appellate Court's decree, remanded for the limited factual and legal determinations described above, ordered that the respondent pay the costs of the appeal, and removed the stay in Civil Application No. 913 of 1950, discharging the rule and ordering each party to bear its own costs of that application.

Holding and Implications

Holding: The appeal was allowed. The Court held that Bombay Act LVII of 1947 applied to the suit which was pending on 13 February 1948 (the date the Act came into force). The decree passed by the lower appellate Court (which applied Bombay Act VII of 1944) was set aside and the matter was remanded to the lower appellate Court with directions to determine specific factual and statutory issues.

Direct consequences and orders:

  • The decree of the lower appellate Court is set aside and the appeal is remanded to that Court to record findings on (a) whether the plaintiff required the suit premises reasonably and bona fide for his own occupation and (b) whether, under s. 13(2) of Bombay Act LVII of 1947, greater hardship would be caused by passing the decree than by refusing it, having regard to all circumstances including availability of other reasonable accommodation.
  • The Court declined to direct further inquiry on whether the defendant had erected a "permanent structure" within the meaning of s. 13(1)(b), holding the alleged works (compression machine fixed in earth and electric fittings) were not permanent structures for this purpose.
  • The respondent (plaintiff in the second appeal) was ordered to pay the costs of this appeal.
  • In Civil Application No. 913 of 1950 the stay previously in force was removed, the rule discharged, and each party was ordered to bear its own costs of that application.

Broader legal implication noted by the Court: the proviso to s. 50 of Bombay Act LVII of 1947 was construed to operate substantively so as to make the 1947 Act applicable to pending landlord-tenant suits (including those concerning business premises) where Part II of the Act otherwise applies. The Court relied on statutory definitions (s. 3(11) and s. 6(1)) and precedent to support this interpretation. The decision therefore affected the statutory regime applicable to pending landlord-tenant litigation at the date the 1947 Act came into force.

Appeal allowed: Rule discharged.

Disposition summary: Appeal allowed; lower appellate decree set aside; matter remitted for specific findings; costs as ordered; stay removed in related civil application.

Show all summary ...

Bhagwati, J.:—

This is a second appeal from the decision of the learned Assistant Judge, Jalgaon, allowing the appeal against the decision of the learned Joint Civil Judge, Junior Division, at Jalgaon.

The plaintiff is the owner of a house bearing City Survey No. 1991 which consisted of business premises. A lease for a period of about five years expiring on November 4, 1945, was granted by the plaintiff to the defendant. The defendant, however, continued in possession of the suit premises even after the expiration of the period of the lease. A two-thirds portion of the suit premises had been requisitioned by the Government and a one-third portion was in the possession of the defendant. On June 18, 1946, the plaintiff filed a suit for possession of the suit premises consisting of one-third of the house in the actual possession of the defendant basing his claim for possession on the ground that he required the suit premises for his own use and occupation. This claim of the plaintiff was resisted by the defendant who contended that the plaintiff did not require the premises for his own use and occupation. The trial Court held that the Bombay Act LVII of 1947 which came into operation from February 13, 1948, applied but that the suit premises were not required by the plaintiff reasonably and bona fide for his own use and occupation and therefore dismissed the plaintiff's suit on April 19, 1948. The plaintiff filed an appeal from this decision of the learned trial Judge. The lower appellate Court came to the conclusion that the Bombay Act VII of 1944 was applicable, that the same did not apply to business premises and that therefore the defendant was not entitled to the protection of the Act. Under the circumstances the lower appellate Court does not appear to have considered the question whether the plaintiff required the suit premises reasonably and bona fide for his own use and occupation, and proceeding on the basis that the defendant was not entitled to the protection of the Bombay Act VII of 1944 decreed the plaintiff's claim and ordered the defendant to hand over possession of the suit premises to the plaintiff. This second appeal was filed by the defendant from that decision of the lower appellate Court.

Before we proceed to deal with the main question that has been canvassed before us in this appeal we might as well dispose of two minor points which were urged before us by Mr. R.B Kotwal for the appellant, viz. (1) whether the Government which had requisitioned two-thirds of the suit premises were necessary parties to the suit, and (2) whether a suit could lie for possession only of a one-third part of the suit property which had been the subject-matter of the original lease.

In regard to the first point, it is obvious that there is no privity of estate established between the plaintiff and the Government by reason of the requisition of the two-thirds part of the suit premises. The effect of an order of requisition is only this that so far as the tenant is concerned the tenancy rights in respect of the part of the premises which are the subject-matter of the requisition order vest in the Government. That does not mean that the Government become sub-tenants of the original tenant or are brought into direct relationship with the landlord as landlord and tenant. If the former were the true position, even then it would not be necessary to implead the sub-tenant as a party-defendant to the suit which the landlord files for eviction of the tenant. If the latter were the true position, the landlord not seeking to evict the Government from the portion of the premises in their use and occupation under the terms of the requisition order, there would be absolutely no necessity of making the Government party defendants to this suit.

In regard to the second point, it may be observed that the right which the landlord has on the termination of the lease is to have delivery of the possession given over by the tenant to him and that is the right which the landlord seeks to exercise when he files a suit for ejectment against the tenant on the termination of the tenancy. It may be that the tenant for certain reasons is not in a position to hand over possession of the whole of the property which has been let out to him. But that does not mean that the landlord would not be entitled to obtain possession from the tenant of such portion of the property let out to him as the tenant is in a position to give. In this case by reason of the paramount rights acquired by the Government over the two-thirds of the suit property by requisitioning the tenancy rights in connection there with, it may be that the landlord may not be able during the currency of the requisition order to obtain vacant possession of the two-thirds of the property, the subject-matter of the requisition order. That, however, would not preclude the landlord from maintaining a suit for possession of the one-third of the suit property which is actually in the possession and occupation of the defendant; and it would be no answer for the defendant to say that if the possession of the whole of the suit property cannot be obtained by the landlord he, though he is in actual possession and occupation of the one-third of the suit property and is in position to deliver vacant possession to the landlord, should not be called upon to do so. We therefore negative both these contentions which have been urged on behalf of the appellant.

The main question therefore which survives for our determination is whether the parties here were governed by Bombay Act LVII of 1947 which came into operation on February 13, 1948, or by the Bombay Act VII of 1944 as it was held by the lower appellate Court. The determination of this question turns upon the construction of s. 50-of Bombay Act LVII of 1947 and the proviso thereto. The main part of s. 50 enacts that the Bombay Rent Restriction Act, 1939, and the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944, are hereby repealed. Stopping here for a moment, it is clear that from the time that this Act LVII of 1947 came into operation, i.e February 13, 1948, these two Acts of 1939 and 1944, being respectively Bombay Act XVI of 1939 and Bombay Act VII of 1944, were repealed. If nothing more was said, we would have s. 7 of the General Clauses Act 1 of 1904 coming into play and saving the legal proceedings or remedies in respect of any right, privilege, obligation or liability acquired, accrued or incurred under the repealed enactments. All suits therefore which were pending and which were governed by the provisions of these respective Acts which were repealed would be saved and the rights and the obligations of the parties thereunder would be governed by the relevant provisions of the repealed Acts. The Legislature, however, in the enactment of Bombay Act LVII of 1947 was enacting certain provisions for the benefit of the tenants which conferred larger benefits on them than were in fact conferred by the earlier Acts which were repealed, and it therefore thought it advisable that in regard to pending suits also in which decrees were not passed the provisions of Bombay Act LVII of 1947 should be made applicable. It was with that intention that the proviso to s. 50 was enacted in the manner it was done and it was provided that “all suits and proceedings between a landlord and tenant relating to recovery or fixing of rent or possession of any premises to which the provisions of Part II apply…which are pending in any Court shall be transferred to and continued before the Courts which would have jurisdiction to try such suits or proceedings under the Act and thereupon all the provisions of the Act and the rules made thereunder shall apply to all such suits and proceedings.” It is necessary at the outset to turn to the definition of a “tenant” contained in s. 3(11) of this Act which lays down that the tenant includes any person remaining after the determination of the lease in possession with or without the assent of the landlord of the premises leased to such person……and also to s. 6 of the Act which lays down to what premises the provisions of part II of the Act apply. Section 6(1) of the Act says that in the areas specified in schedule I, part II shall apply to premises let for residence, education, business, trade, or storage……If regard be had to these provisions of the Act just mentioned, it follows that suits which were pending in any Court at the date of the coming into operation of this Act, Bombay Act LVII of 1947, and which fall in the category of suits and proceedings between landlord and tenant relating to recovery or fixing of rent or possession of any premises to which the provisions of part II apply were to be transferred to and continued before the Courts which would have jurisdiction to try such suits or proceedings under the Act and all the provisions of the Act and the rules made thereunder would apply to all such suits and proceedings. It may be remembered that the Bombay Act VII of 1944 did not apply to business premises but only applied to residential premises therein mentioned. This proviso, however, made the Bombay Act LVII of 1947 applicable to all suits which had been pending at the time when it came into operation and which were in regard to premises inclusive of business premises, and this enlarged the scope of the benefit which was enjoyed by the tenants under the repealed Act, Bombay Act VII of 1944, by conferring the benefit of the provisions of the Bombay Act LVII of 1947 on such tenants also who would otherwise have not been entitled to the same if the provisions of the Bombay Act VII of 1944 only continued to be applicable. This proviso therefore in effect enacted a substantive provision in favour of the tenants and was not merely a proviso to the main part of the s. 50. It is a normal rule of interpretation of a proviso that its proper function:

“is to except and deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case. Where the language of the main enactment is clear and unambiguous, a proviso can have no repercussion on the interpretation of the main enactment, so as to exclude from it by implication what clearly falls within its express terms.”

(Vide M. & S.M Railway v. Bezwada Municipality. This is no doubt the normal rule of construction as to the effect of a proviso, but if the proviso in clear and explicit terms enacts a substantive provision of this type, it cannot necessarily be controlled by the language of the main enactment. As we have observed above, the purpose of the enactment of this proviso in the terms in which it is couched was to confer larger benefits on the tenants of the nature available in the provisions of the Bombay Act LVII of 1947, and if that was so, the main provisions of s. 50 which was merely a repealing section would not fetter or limit or control the explicit or specific provisions contained in the proviso and the proviso to s. 50 could not be legitimately read as confined only to those cases which fell within the purview of the repealed Acts, Bombay Act XVI of 1939 and Bombay Act VII of 1944. We are fortified in this conclusion of ours by a judgment of the learned Chief Justice in Shivaraj Rupchand Shedji v. Abdul Ajij where a similar point arose for the decision of the learned Chief Justice and he came to the same conclusion as we have reached above. The result therefore is that Bombay Act LVII of 1947 applied to the suit which was filed by the plaintiff against the defendant herein and which was pending in the Court on February 13, 1948, when that Act came into operation. If that was so, the conclusion which was reached by the lower appellate Court, viz. that Bombay Act VII of 1944 applied, was wrong, and the learned trial Judge was right when he held that the Bombay Act LVII of 1947 applied to the present case.

The difficulty, however, which confronts us on the record is that though the learned trial Judge recorded his finding that the premises were not required reasonably and bona fide by the plaintiff for his own use and occupation, the lower appellate Court did not apply its mind to this aspect of the case and did not record its finding thereon, with the result that we have not got before us any finding recorded by the lower appellate Court in regard to this issue. In the absence of that finding we would not be justified in passing any order one way or the other in regard to the plaintiff's claim against the defendant. The only reasonable thing under the circumstances would be to set aside the decree which has been passed by the lower appellate Court and to remand the matter to the lower appellate Court with a direction that it will go into the evidence which has been recorded in the trial Court in regard to this issue and record its finding on the issue whether the plaintiff requires the suit premises reasonably and bona fide for his own occupation. As a subsidiary issue to this main issue the lower appellate Court will also record its finding on the question whether under s. 13(2) of Bombay Act LVII of 1947 it is satisfied that having regard to all the circumstances of the case including the question whether other reasonable accommodation is available for the landlord or the tenant, greater hardship would be caused by passing the decree than by refusing to pass it and will dispose of the appeal in accordance with its findings on the above issues.

Mr. Dharap for the respondent urged upon us that when we were remanding this matter to the lower appellate Court, we should also direct the lower appellate Court to go into one further issue, whether within the meaning of s. 13(1)(b) of the Bombay Act LVII of 1947 the defendant had without the plaintiff's consent in writing erected on the premises any permanent structure. He drew our attention to the application which the plaintiff had made in the trial Court being ex. 61 where he had stated that the defendant had constructed without the plaintiff's written consent permanent structures on the premises in suit such as fixing in earth a compression machine and electric fittings of a petrol pump. In ex. 62 which was a reply to this application the defendant had denied that he had erected any permanent structure on the premises, his contention being that fixing in earth of a compression machine and electric fittings of a petrol pump is in no manner the erection of a permanent structure on the premises. Mr. Dharap drew our attention to the reply which the defendant had given to the notices which had been given by the plaintiff to eject him and where he had stated as one of the grounds why he should not be called upon to vacate and deliver over vacant possession of the premises that he had erected a permanent structure on the premises and he relied upon this statement of the defendant as an admission showing that the defendant had in fact erected on the premises a permanent structure without the plaintiff's consent given in writing. We would have been inclined to accept this argument of Mr. Dharap if we thought that there was any substance in the contention of the plaintiff in this behalf. We are, however, of the opinion that the mere fixing in earth of a compression machine and electric fittings of a petrol pump, though they may be fixtures, are certainly not permanent structures erected on the premises, and even though an inquiry in this behalf might entail the remanding of an issue in this behalf by the lower appellate Court to the trial Court involving considerable time and therefore delay in the matter of the ejectment of the defendant if ever the plaintiff was entitled to eject him and might benefit the defendant who is the tenant, we do not think that such an order can be legitimately made by us having regard to the facts of the case as indicated above. No ends of justice would be served by making such an order and we there fore decline to do so.

The result, therefore, is that the appeal will be allowed, the decree passed by the lower appellate Court will be set aside and the matter will be sent back to the lower appellate Court with a direction that the lower appellate Court do record its findings on the two issues which we have mentioned above and dispose of the appeal in accordance with law having regard to those findings. The respondent will of course pay the costs of this appeal.

In regard to the Civil Application No. 913 of 1950, the parties are relegated to the positions which they enjoyed in the lower appellate Court. There is therefore no justification for continuing the stay any longer. The stay will therefore be removed, the rule will be discharged and each party will bear and pay its own costs of this application.

Appeal allowed: Rule discharged.
J.G.R