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V.P Selvaraj v. V. Narasimha Rao, By Power Agent V. Sethu Rao And Another.

Madras High Court
Jun 21, 1968
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Judgment Summary (Delivered by Ramaprasada Rao, J.)

Factual and Procedural Background

The dispute concerns a building occupied in its entirety by the tenant (petitioner in C.R.P. 112 of 1965) since 1956. The building comprised two distinct compartments: a front portion used for non-residential purposes and a back portion used for residential purposes. In or about 1962 the tenant and landlord entered into an arrangement that the front portion (delineated by mutual understanding) would be demolished and reconstructed and, on reconstruction, the landlord would re-let the front portion to the tenant at an increased rent. The tenant advanced money to the landlord to enable demolition and reconstruction and a mortgage (Ex. B.1) dated 21 May 1962 was executed for that purpose. The arrangement was not implemented due to later differences between the parties.

The landlord filed an application under S. 14(1)(b) of the Madras Buildings (Lease and Rent Control) Act, 1960, seeking possession for demolition and reconstruction and included the back portion in the claim. The Rent Controller initially allowed the petition. The appellate authority set aside the Rent Controller's order. On revision, the learned District Judge, West Thanjavur, considered the prior arrangement and concluded that the landlord's claim to demolish and reconstruct the front portion was bona fide and ordered eviction from that front portion, but he found the landlord's claim with respect to the back portion to be oblique and lacking in bona fides and negatived it. Both the tenant and the landlord filed revision petitions against the District Judge's order (the tenant in C.R.P. 112 of 1965 and the landlord in C.R.P. 1620 of 1965).

Legal Issues Presented

  1. Whether the landlord's application under S. 14(1)(b) of the Madras Buildings (Lease and Rent Control) Act, 1960, was bona fide — i.e., whether the landlord honestly desired to demolish and reconstruct the building for the purpose stated.
  2. Whether the concept of 'bona fide' under S. 14(1)(b) can be compartmentalised between different portions of the same building (i.e., whether bona fides can be accepted for the front portion and rejected for the back portion).
  3. Whether the District Judge's partial allowance (eviction from front portion but not from back portion) was legally correct in light of the statutory scheme, including S. 14(2)(b) and S. 16 of the Act.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Nathella Sampathu Chetti v. Sha Vajinjee Bapulal, 80 L.W. 73 Interpretation of the word "bona fide" in eviction provisions — that the landlord must honestly desire to occupy the premises and the claim must not be a device to serve an oblique purpose. The court quoted Veeraswami J.'s formulation to emphasize that "bona fide" requires an honest desire to occupy and that the claim should not be a device for an ulterior purpose; this principle guided interpretation of S. 14(1)(b).
David v. Daniel, 1967 1 M.L.J. 110 The only requirements of S. 14(1)(b) are the landlord's honest desire to demolish and that demolition is for erecting a new building on the same site; "bona fide" does not mean the building must be old or dilapidated; statutory safeguards negate the need for microscopic scrutiny of subjective intention. The court relied on this Division Bench authority to hold that "bona fide" under S. 14(1)(b) means an honest intention to demolish and rebuild, and that there is no rule requiring the building to be old or dilapidated; the case supports refusal to bifurcate bona fides between portions of the same building.

Court's Reasoning and Analysis

The court began by identifying and explaining the relevant statutory scheme:

  • S. 14(1)(b) permits a landlord to obtain an order directing a tenant to deliver possession where the Controller is satisfied that the building is bona fide required for immediate demolition and for erecting a new building on the same site.
  • S. 14(2)(b) requires the landlord to give an undertaking that demolition work will be substantially commenced within one month and completed within three months (or within any extended period allowed by the Controller).
  • S. 16 gives the tenant a statutory right to reclaim possession if the landlord does not substantially commence work within the prescribed time; the Controller is then obliged to restore the tenant to possession on the original terms.

Reading S. 14(1)(b) in conjunction with S. 16, the court observed that the meaning of "bona fide" in S. 14(1)(b) must be understood in a limited and contextual sense. Because S. 16 provides a statutory remedy to the tenant if the landlord fails to carry out demolition and reconstruction, the courts need not engage in intrusive or microscopic inquiries into the landlord's subjective state of mind beyond determining whether the claim is honestly entertained and not a device to achieve an oblique purpose.

The court relied on the quoted passage from Nathella Sampathu Chetti defining "bona fide" as an honest desire to occupy and not a device to serve an oblique purpose, and on the Division Bench decision in David v. Daniel which held that S. 14(1)(b) requires only an honest desire to demolish and rebuild and does not condition the section on the building being old or dilapidated. The David decision was cited for the additional point that statutory safeguards (S. 14(2)(b), S. 16 and S. 33(3)) exist to prevent misuse of S. 14(1)(b).

Applying these principles to the facts, the court noted:

  • It was not suggested that the landlord's overall claim for possession of the entire building was dishonest or designed for an ulterior purpose.
  • There had been a prior arrangement to reconstruct only the front portion, but subsequently the landlord sought to demolish and reconstruct the whole building including the back portion.
  • Given the statutory scheme and the safeguards that attach to S. 14(1)(b) (notably the undertaking in S. 14(2)(b) and the tenant's remedy under S. 16), the court concluded that there was no basis for compartmentalising or bifurcating the question of bona fides between different portions of the same building.

Consequently, once the landlord's claim was found to be honest and compliant with other statutory conditions, the court held that eviction must be directed for the entire building rather than only for the front portion. The District Judge's conclusion — accepting bona fides for the front portion but negativing the claim as to the back portion — was held to be not "legal, regular or proper" and therefore was set aside.

Holding and Implications

Holding: The court set aside the order of the learned District Judge. In the result, C.R.P. 112 of 1965 is dismissed and C.R.P. 1620 of 1965 is allowed. The petitioner in C.R.P. 112 of 1965 (the tenant) is granted four months from the date of the judgment to vacate and surrender possession of the entire building to the landlord. There will be no order as to costs.

Implications: The direct effect is that the landlord's claim for possession under S. 14(1)(b) succeeds for the entire building and the tenant must vacate within four months. The opinion emphasises that, in the context of S. 14(1)(b) read with S. 16 and related statutory safeguards, the court should not engage in microscopic scrutiny of the landlord's subjective intention nor compartmentalise bona fides between different portions of the same building. The opinion does not describe or purport to establish any broader precedent beyond the statutory interpretation and its application to the facts of this dispute.

Reported disposition excerpt: "The order of the learned District Judge is set aside. C.R.P. 112 of 1965 is dismissed and C.R.P. 1620 of 1965 allowed. There will however be no order as to costs. The petitioner in C.R.P. 112 of 1965 is granted four months time from to date to vacate and surrender possession to the landlord of the entire building."

Show all summary ...

(Delivered by Ramaprasada Rao, J.)

Both the tenant and the landlord aggrieved against the legality, regularity and propriety of the order of the learned District Judge of West Tbanjavur, have filed these two revision petitions, the former being the one fieled by the tenant and the latter by the landlord. It is unnecessary to repeat the entire facts which have been clearly state by the learned District Judge in his order. Suffice it however to observe the relevant details.

The tenant, petitioner in C.R.P 112 of 1965, was occupying the premises in question in its entirety from 1956. The premises, however, contained two distinct compartments, one the front portion thereof which was used for non residential purposes, and the other the back portion which was at all times being used for residential purposes. In or about 1962, the tenant (petitioner in C.R.P 112 of 1965), and respondent in C.R.P 1620 of 1965) and the landlord (respondent in C.R.P 112 of 1965 and petitioner in C R, P. 1620 of 1965), entered into an arrangement whereby the front portion which was delimited and delineated by mutual understanding, was to be demolished and reconstructed, and on such reconstruction the landlord was to re-let the same to the tenant on an increased rent. The other material portions of the arrangement between the tenant and the landlord need not be stated as it is not necessary. The tenant, in fact, advanced moneys to the landlord to unable him to demolish and reconstruct the front portion as agreed to. Indeed a mortagage, Ex. B. 1, dated 21st May 1962, was executed for the purpose. Later, due to differences between the tenant and the landlord, the arrangement was not implemented. The landlord thereafter filed an application under S. 14(1) (b) of the Madras Buildings (Lease and Rent Control) Act of 1960, hereinafter referred to as the Act, including the back portion on the ground that he required the building for demolition and reconstruction. The Rent Controller allowed the petition. The appellate authority, however, disagreeing with the Rent Controller, set aside the order of the Rent Controller. On revision to the learned District Judge, West Thanjavur, he was of the view that regard should be had to the entericr arrangement entered into between the landlord and the tenant and to that extent at least the bona fides of the landlord to demolish and reconstruct the front portion of the building is established and having regard to the difference between the provisions of S. 14 (1) (a) and 14 (1) (b), came to the conclusion that the Supervening intention of the landlord in seeking eviction of the tenent from the back portion of the building appears to be oblique and lacking ia bona fides. He ultimately came the conclusion that in so far as the claim of the landlord to evic the tenant from the front portion of the building which was delineated and demarcated by both the parties was concerned it was well founded and bonafide and therefore ordered the eviction of the tenant from that portion of the building; as regards the back portion of the building, the claim of the landlord was negatived. Against this order of the learned District Judge, both the tenant and the landlord have come up in revision.

At the outset it is necessary to observe the statutory provision which enables a landlord to file aa application for eviction for demolition and reconstruction of his building ia the occupation of a tenant. S. 14 (1) (b) speaking of recovery of possession by a landlord for reconstruction, provides that on an applicatioa made by a landlord, the Controller shall, if he is satisfied that the building is bona fide required by the landlord for the immediate purpose of demolishing it and such demolition is to be made for the purpose of erecting a new building on the site of the building sought to be demolished, pass an order directing the tenant to deliver possession of the building to the landlord, before a specified date. Sub. sec. (2) (b) of S. 14 imposes a further obligation on the landlord. This sub-section provides that no order directing the tenant to deliver possession of the building ander S. 14 (1) (b) of the Act shall be passed unless the landlord gives an undertaking that the work of demolishing any material portion of the building shall be substantially commenced by him not later than one month and shall be completed before the expiry of three months from the Gate he recovers possession of the entire building or before the expiry of such further period as the Controller may allow. It is however to be noted that S. 16 controls the letter and spirit of 5. 14 (1) (b) of the Act. S. 16 makes it imperative that the undertaking envisaged in S, 14 (2) (b) of the Act shall be implemented, and in default thereof the tenant would be entitled to restoration of the possession of the building. S. 16 of the Act in terms thereof provides that where the work of demolishing any material portion of the build’ ing has not been substantially commenced by the landlord within the period of one moath in accordance with his undertakiag uader clause (b) of sub-sec (2)of S. 14, the tenant aaay after following the prescribed procedure therein, reclaim the building from the landlord on an application made in that behalf. The Controller, while dealing with such an application, is mandatorily obliged to put the tenant in possession of such a building on the original terms and conditions. It is in the light of such statutory provisions that the word ‘bonafide’ appearing in S. 14 (1) (b) has to be understood. No doubt, the word ‘bona fide’ is tritely used in the Act for very many pnrposes, and to achieve different objects. But the word ‘bonafide’ in S. 14 (1) (b) has to be understood ia the context ia which it is used. When S. 14 (1) (b) is read in conjunction with and in juxtaposition to S. 16 of the Act, it is very clear that the real content of the word “bona fide” appearing ia this sub-section has to be understood in a limited sense and has to given effect to in the context in which it appears. While dealing with the expression ‘bona fide’, Veeraswami J, speaking for the Bench in Nathella Sampathu Chetti v. Sha Vajinjee Bapulal 80 L.W 73 observed as follows:—

“It is not in controversy before us that the conditions of S. 10 (3) (iii) are satisfied, and, therefore, the only question is, as was rightly posed by the lower appellate court whether the claim of the landlord is bona fide. This requirement that the claim of the landlord should be bona fide is common to not only the provision under which the petitioner applied in this case, but also to several other provisions which provide for tenant's eviction. The expression, therefore, will have to be understood in the context, but subject to that, It means that for present purposes the landlord honestly desires to occupy the premeses from which eviction is sought and his claim is not a device to serve an oblique purpose”.

The quality and content of the expression ‘bona fide’ appearing in the various sections of the Act and for puposes therein enumerated have to be weighed and construed in different lines under different circumstances having regard to the context in which the expression appears S. 16 of the Act affords a statutory right to the tenant to reclaim possession of a building secured by the landlord under S. 14 (1)(b), if he does not substantially demolish the building and attempt at reconstruction as proposed. This controlling provision provides as it were a key to the interpretation of the expression ‘bona fide’ appearing jn S. 14(1) (b) of the Act. It appears to us that in cases where the claim of the landlord is not per se dishonest and has not been found to be oblique or for any designed purpose to evict the tenant, then it follows that he is entitled to an order of eviction in the ordinary course, subject, however, to the tribunals constituted under the Act being satisfied that the other relevant conditions required and prescribed under the Act are complied with. It is relevant at this stage to quote an expert from the decision of a Division Beneh of this court in David v. Daniel 1967 1. M.L.J 110.. The learned Chief Justice speaking for the Bench said:—

“The only requirements of S. 14 (1) (b) it the honest desire of the landlord to demolish the building and such demolition is to be made for the purpose of erecting a new building on the site of the building sought to be demolished. There is nothing in the language of this clause to warrant the view that, the building should be old and decrepit. The expression ‘bona fide’ occurring in that clause cannot sustain the opinion that it is only when a building is old and in a dilapidated condition that it could be demolished for the purpose of putting up a new construction, so as to attract clause (b) of S. 14 (1). The import of the section is that the desire or the intention to demolish and rebuilt should be honestly entertained by the landlord. It should not be a device to evict the tenant.

Moreover there are sufficient safeguards is the statute itself against such device in the shape of S. 14 (2) (b), Sec. 16 and S. 33 (3)

In the instant case it is not suggested that the lannlord's claim for possession of the entire building is in any way oblique or dishonest or indeed designed. No doubt, there was a prior arrangement between the parties that the landlord intended to reconstruct only the front portion of the building which was being used for non-residential purposes. Later on, he changed his mind and wanted to demolish the entire building including the back portion and reconstruct the same. In the light of the statutory mandates and the undertaking which is bound to give at the time when he secures an order under S. 14 (1) (b) of the Act, it is difficult to hold that there is partial lacking of bona fides on the part of the landlord in so far as his claim for eviction of the tenant from the back portion of the building is concerned. Bona fides cannot be mutilated in the way it was sought to be done by the learned District Judge. In an application under S. 14 (1) (b), there is no scope for such bifurcation of bona fides and compartmentalisation thereof. It cannot be said that the application for demolition and reconstruction of the front portion of the building is bona fide and that it is not so in so far as it relates to the back portion of the same building. Once it is found that the landlord has satisfied all other relevant considerations which might arise under S. 14(1) (b) of the Act, and his claim is found to be honest and not designed and not for an ingenious purpose, then no option is left to the court except to direct eviction of the tenant. This is so, because the landlord it always under the grave risk of facing a claim for repossession of the building or part thereof whenever he fails in his undertaking as contemplated in sub-sec. (2) of S. 14 resulting in the tenant securing a redelivery of the building or part thereof securrd by the landlord pursuant to the orders passed by the Controller under S. 14 (1) (b). This safeguard acts as a pivot to tilt matters one way or the other and in effect a microscopic scrutiny into the subjective content of the expression ‘bona fide’ appearing under S. 14 (1) (b) becomes absolutely unnecessary.

In view of the finding of the learned Distriet Judge that the landlord's requirement of the front portion of the building is bona fide justified, we are of the view that his conclusion that the petition has to be dismissed in so far as it relate to the back portion of the building is not well-founded. In our view the order of the learned District Judge is neither legal, regular or proper. It is therefore set aside. In the result C.R.P 112 of 1965 it dismissed and C.R.P 1620 of 196S allowed. There will however be no order as to costs. The petitioner in C.R.P 112 of 1965 is granted four months time from to date to vacate and surrender possession to the landlord of the entire building.

V.C.S