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J.N Gulamali And Others v. Howrah Casting Co., Madras And Another

Madras High Court
Aug 26, 1977
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Structured Summary of the Opinion

Factual and Procedural Background

These revision petitions arise out of a common judgment and raise the same question of law. The revision petitioners are owners of premises bearing door No. 25, Errabalu Chetti St., Madras-1; the respondents are tenants occupying various portions of that building. The second petitioner (Abidali) carries on a business in pipes and slice valves under the name "International Sales Corporation" from a rented premises at No. 3/13 Vanniar St., Madras. It is admitted that the business at No. 25 (owned by the petitioners) is different from the business carried on by the second petitioner at No. 3/13.

The second petitioner filed petitions before the Rent Controller under S. 10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act claiming a bona fide requirement of the tenants' portions for his own business purposes; as a precaution, petitions under S. 10(3)(c) of the Act were also filed for additional accommodation if the primary applications were held not maintainable.

The Rent Controller found the second petitioner's requirement bona fide and ordered eviction under S. 10(3)(a)(iii), holding that S. 10(3)(c) was not applicable. The tenants appealed to the Court of Small Causes, Madras (Second Judge). The appellate authority concluded that because the second petitioner was a partner in a business ("Universal Hardware Mart") carried on in the premises at No. 25, he could not obtain eviction under S. 10(3)(a)(iii), and further held that S. 10(3)(c) was not maintainable. These findings led to the present revision petitions.

Legal Issues Presented

  1. Whether S. 10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act is available to a landlord (or co-owner/partner) who seeks eviction to occupy his own non-residential premises for a business that is different from a business carried on by him (or by him in partnership) in other premises.
  2. Whether the phrase "a business" in S. 10(3)(a)(iii) should be read as referring to any business generally (so as to disqualify a landlord who carries on any business in his own non-residential building) or whether the test must be applied to the particular business for which eviction is sought.
  3. The maintainability of alternative claims under S. 10(3)(c) of the Act in the circumstances of these petitions.

Arguments of the Parties

Revision petitioners' (Appellants') arguments — as advanced by Mr. K. Parasaran

  • The business carried on by the second petitioner at No. 3/13 Vanniar Street is entirely different from the business carried on at No. 25, Errabalu Chetti St. If the businesses are different, S. 10(3)(a)(iii) applies and the second petitioner may seek eviction for bona fide occupation for that different business.
  • The fact that the second petitioner is a partner in a business carried on in No. 25 should not negate his right to eviction for a different business; denying that right would be contrary to the spirit of the Act.
  • The petitioner relied on judicial authority (including Easwaran Chettiar v. Subbarayan and the Division Bench ruling in C.R.P. 2343 of 1971 / V. R. Jayaraman v. N. S. Ramalingam) to support the proposition that where the landlord carries on different businesses, S. 10(3)(a)(iii) is available in relation to the distinct business being shifted to the owned premises.

Tenants' (Respondents') arguments — as advanced by Mr. M. R. Narayanaswami

  • Support for the appellate authority's order: the phrase "a business" in S. 10(3)(a)(iii) should be read with reference to any business carried on by the landlord in his own non-residential building; the provision does not allow the landlord to claim eviction if he is carrying on a business in his own non-residential premises, even if the business for which eviction is sought is different.
  • Relied specifically on Glamour Saree Museum v. Tamil Nadu Handloom Weavers Co-operative Society (83 L.W. 13), where the learned judge held that "a business" refers to any business and not each of the businesses; reading the section otherwise would amount to adding to the legislation rather than interpreting it.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Easwaran Chettiar v. Subbarayan (cited as 85 L.W. 696) The Division Bench wording that the letter "a" in S.10(3)(a)(iii) would mean "any" — interpreted in the context of the facts of that case (same business, wholesale vs retail). The court treated this decision as authority for the proposition that where the landlord is carrying on the particular business in his own building, he cannot obtain eviction for that same business; but the opinion emphasises that the decision must be read with regard to its facts and does not preclude eviction where the business for which eviction is sought is different.
Glamour Saree Museum v. Tamil Nadu Handloom Weavers Co-operative Society (83 L.W. 13) Held that the phrase "a business" refers to any business and not each of the businesses; the carrying on of a business by the landlord in his own non-residential building is the disqualifying test. Relied upon by the tenants' counsel. The court discussed and distinguished this authority, observing that its statement must be understood in context and does not govern situations involving distinct businesses where eviction is sought in respect of a different business carried on in a rented building.
C.R.P. 2343 of 1971 (Division Bench) — shortly reported as V. R. Jayaraman v. N. S. Ramalingam (1973 T.L.N.J. 393) Held that if a landlord carries on two different businesses — one in a building of his own and another in a rented building — the landlord may be entitled to relief under S.10(3)(a)(iii) for the business carried on in the rented building (i.e., the test applies to the particular business being shifted). The court accepted and applied this ruling as governing the facts of the present case, concluding that S.10(3)(a)(iii) is available where eviction is sought for a business being carried on in rented premises that is different from a business carried on in the landlord's own building.
1969 2 M.L.J. 493 (as discussed in the opinion) The observation (by a learned judge in that report) that "a business" refers to any business and not each of the businesses — to be understood in context. The court noted that the appellate and revisional authorities had misapprehended the purport and scope of that decision when applied broadly; the present opinion reads that authority in context and reconciles it with the Division Bench view that distinguishes distinct businesses.
C.M.P. 6164 of 1950 — 1951 1 M.L.J., Notes of recent cases p.7 (referenced) Referenced as being in accord with the view that a landlord carrying on different businesses may be entitled to relief for a distinct business being shifted. Used as supporting material for the court's interpretive conclusion; the opinion cites this authority as consistent with the Division Bench view that permits eviction where the business for which eviction is sought is distinct and carried on in rented premises.

Court's Reasoning and Analysis

The court begins its analysis by situating S.10(3)(a)(iii) against the object and preamble of the Act: the Act aims to regulate letting and prevent unreasonable eviction. With that purpose in mind, the court interprets the provision so as to avoid unreasonable eviction while giving effect to the statutory text.

The text of S.10(3)(a)(iii) is reproduced and its plain words are examined. The tenant's counsel urged that the statute disqualifies a landlord from seeking eviction if the landlord (or a family member) carries on any business in a non-residential building owned by him; in other words, the presence of any business in the landlord's owned non-residential building would prevent relief under the section.

The court analyses earlier authorities. It recognises that in Easwaran Chettiar v. Subbarayan the Division Bench described the article "a" as meaning "any" and, on the facts of that case (involving essentially the same business in wholesale and retail forms, cited as involving the oil business), concluded that the landlord could not succeed. The court emphasises that that decision must be understood in its factual setting: where the landlord seeks to shift the same business (or the particular business) already carried on in his own premises, the landlord is not entitled to eviction under S.10(3)(a)(iii).

By contrast, the court relies on the Division Bench decision in C.R.P. 2343 of 1971 (V. R. Jayaraman v. N. S. Ramalingam) which held that where a landlord carries on two different businesses — one in a building of his own and the other in a rented building — the landlord may be entitled to relief under S.10(3)(a)(iii) for the business carried on in the rented premises (i.e., the statutory test must be applied with reference to the particular business for which eviction is sought). The court finds this view applicable to the present facts.

The court reconciles the cases by drawing a factual distinction: Easwaran Chettiar is authority for the proposition that a landlord cannot claim eviction for shifting the same particular business when he already carries that business in a building of his own; C.R.P. 2343 supports the proposition that nothing in S.10(3)(a)(iii) bars a landlord from seeking eviction to occupy his own building for a different business which he is carrying on in rented premises.

The court adopts the latter approach as consistent with the Act's object of preventing unreasonable eviction while protecting landlords' rights to occupy their own property for bona fide business needs. The court notes two practical qualifications contained in its reasoning: (1) the landlord's claim must be bona fide; and (2) under the provision the landlord can obtain possession of only one building.

Holding and Implications

Core Ruling: The court held that eviction petitions of the type before it are maintainable under S.10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act where the landlord seeks possession of his own non-residential premises for a business which he is carrying on in a rented building and that business is different from any business he (or his partners) carry on in premises already owned by him. The appellate authority's finding that S.10(3)(a)(iii) did not apply in these circumstances was an error of law.

The court also upheld the lower courts' conclusion that the applications could not succeed under S.10(3)(c) of the Act and did not disturb that finding.

Direct consequences and orders given by the court (as stated in the opinion):

  • C.R.P. 405 and 407 of 1977, which arise out of eviction petitions under S.10(3)(c) of the Act, are dismissed.
  • C.R.P. 406 and 408 of 1977 (the other revision petitions) are allowed; the matter is remitted to the lower appellate court for consideration on merits on the evidence on record.
  • No costs were awarded.
  • The parties are permitted to lead such evidence as they may desire; the appellate authority has discretion to consider the need for additional evidence.
  • The appellate authority is directed to dispose of the appeals on or before 30th November 1977.

The court's decision is presented as an interpretation and application of existing authorities to the facts before it; the opinion distinguishes earlier precedents on factual grounds rather than purporting to legislate a new rule.

Show all summary ...

1. All these revision petitions arise out of a common judgment, and the question of law that arises in these revision petitions is one and the same. It is enough to note the facts of one of the cases.

2. The revision petitioners are the owners of premises bearing door No. 25, Errabalu Chetti St., Madras-1. The respondents are tenants in various portions of the said building. The second petitioner (Abidali) in all these petitions is carrying on business in pipes and slicen valves under the name and style of ‘International Sales Corporation’ in door No. 3/13 Vanniar St., Madias. It is a rented premises. It is admitted that the business carried on by the reviiion petitioners in No. 25, Errabalu Chetti St., Madras, is a different business from the one which the second petitioner is carrying on at No. 3/13 Vanniar St. Stating that the second petitioner bona fide required the portions in the occupation of the respondents herein for his own business purposes, he filed the peti tions before the Rent Controller under S. 10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, (hereinafter referred to as the Act). By way of abundant caution, they also filed petitions under S. 10(3)(c) of the Act for additional accommodation, should the court hold the other applications were not maintainable. The Rent Controller held that the requirement of the premises for the occupation of the second petitioner was bona fide, and ordered eviction under S. 10(3)(a)(iii) of the Act. It was further held by him that S. 10(3)(a)(c) of the Act was not applicable.

3. Aggrieved by that order, the tenants preferred appeals to the Court of Small Causes, Madras (Second Judge). The Appellate authority was of the view that in so far as the second petitioner is a partner of the business called ‘Universal Hardware Mart’ which is being carried on in door No. 25, Errabalu Chetti St., Madras, it was not open to him to get an order of eviction under S. 10(3)(a)(iii) of the Act. He also held that the application under S. 10(3)(c) of the Act was not maintainable. It is under these circumstances, the revision petitions have arisen.

4. Mr. K. Parasaran, learned counsel for the revision petitioners, urges with considerable force that the business carried on at No. 3/13, Vanniar Street, is an entirely different business from the one which is carried on by the second petitioner at No. 25, Errabalu Chetti St. in partnership with other revision petitioners. In such a case S. 10(3)(a)(iii) would apply. So long as these businesses are different, for that business it would be open to the second petitioner to seek eviction of the tenant from the petition-mentioned premises, and his rights cannot be negatived because he happens to be a partner in the business carried on at No. 25, Errabalu Chetti St. That would be against the spirit of the Act. In fact, a Division Bench of this court in Easwaran Chettiar v. Subbarayan . 85 L.W 696. in dealing with a case of same business being carried on by a landlord in two different premises held that the word ‘a business’ occurring in S. 10(3)(a)(iii) would mean any business. This was in fact the ruling laid down by a single Judge earlier. But, a Division Bench in C.R P. 2343 of 1971 dated 2nd May 1973 (shortly reported in V. R, Jayaraman v. N. S. Ramalingam . 1973 T.L.N.J 393. clarified the position and held if there are two different businesses, and with reference to one of the businesses that is carried on by the landlord in a rented premises, if he wants to occupy a portion of that non-residential building which belongs to him, such an application would be maintainable under S. 10(3)(a)(iii). That ruling would govern this case. In this view, the order of the Appellate authority is liable to be set aside.

5. Mr. M. R. Narayanaswami, learned counsel for the tenant, supports the order of the appellate authority and relies upon a decision of Veeraswami, J., as he then was, reported in Glamour Saree Museum v. Tamil Nadu Handloom Weavers Co-operative Soeiety . 83 L.W 13.. In that case the learned Judge categorically laid down that the phrase, ‘a business’ in the provision has reference to any business and not each of the businesses. Therefore, the application under S. 10(3)(a)(iii) is not maintainable. If, according to the learned counsel, the test is applied with reference to each of the businesses it will be adding to the legislation and not interpreting that section.

6. Having regard to the controversy, I think it will be useful to refer to the object of the Act which says—

“An Act to amend and consolidate the law relating to the regulation of the letting of residential and nonresidential buildings and the control of rents of such buildings and the prevention of unreasonable eviction of tenants therefrom in the State of Tamil Nadu”.

The preamble also reads in similar terms. Therefore, what is sought to be prevented is unreasonable eviction. If this is kept in the background, in my view, much of the difficulties can be avoided. S. 10 (3) (a) (iii) of the Act, which is relevant for our purpose, reads—

“In case it is any other non-residential building, if the landlord is not occupying for purposes-of a business which he is carrying on, a non-residential building in the city, town or village concerned which is his own”.

How Mr. M. R. Narayanaswami wants me to read this section is, if a landlord or any member of the family is occupying for the purpose of a business (though different) in non-residential building, he will go out of the put view of the section. In other words, according to him, the test is: (1) whether he carries on business, (2) in a non residential building. In the instant case, so far as the second petitioner carries on business as a co-owner along with the other petitioners, he would fall out of the purview of this section. He also relies on for this contention, a judgment of Veeraswami, J, as he then was, reported in Glamour Saree Museum v. Tamil Nadu Handloom Wealvers Co-operative Society. The learned Judge held therein at page 14.—

“What the sub-section provides is that the carrying on of a business by the landlord in his own non-residential building is the test, and that does not in my view, mean each business or a particular business. The phrase, ‘a business’ in the provision has reference to any business and not each of the businesses.

7. However, in Eswaran Chettiar v. Subbarayan a Division Bench of this court held—

“The primordial requisite or the condition precedent which would enable a landlord to seek an order under S. 10 (3) (a) (iii) is that he should not be in occupation of a non-residential building of his own in which he is carrying on a business. The letter ‘a’ in S. 10 (3) (a) (iii) would mean ‘any’. That would be its plain meaning. The fact that the premises owned and occupied by him does not subserve his business interests and that it is not convenient for him to occupy the same for purposes of a business which he is carrying on is an irrelevant factor and if that is taken into consideration, we are of the view that while interpreting the section we would be making law and not declaring law. The law as it stands says that the landlord is interdicted from seeking a non-residential building of his in the occupation of his tenant if and when he is already in such a non-residential building of his own in which ho is carrying on a business. We have already prefaced that hardship and inconvenience caused in declaring the law as it stands cannot be noticed by court; for it is the exclusive prerogative of the Legislature to amend such hardships and to avoid the same. In the instant case, the finding of the court below is that the respondent is carrying on both wholesale and retail business in a building of his own, and he is seeking for eviction of the tenant in another con-residential building belonging to him on the ground that he wants to expand his business or set up a new business. However bona fide the intention of the Legislature may be, and whatever hardship might result by reason of the application of the prevailing law, we are unable to agree with the contention of the learned counsel for the respondent that he would be entitled to an order for eviction, for he deserves it”.

8. It requires to be noted at this stage that the law which came to be laid down by a Division Bench was with reference to the oil business. In other words, it was in respect of the same business, except that one was wholesale, and the other was retail. The reason why I mention this is, a distinction has been made, if I may say so with great respect, rightly between distinct businesses.

9. In C.R.P 2343 of 1971 dated 2-5-1973, a Division Bench of this court, in dealing with a siuation like the one on hand, held—

“But the Court is of the opinion that the fact that the petitioner is carrying on business in jewellery in a building of his own does not really disentitle him to relief under S. 10 (3) (a) (iii) of the Act, though in this case the petitioner has to fail on other grounds. The Appellate Authority and the revisional authority have not correctly understood the purport and scope of the decision in 1969 2 M.L.J 493. The observation of the learned Judge—“What the sub-section provides is that the carrying on of the business by the landlord in his own nonresidential building is the test, and that does not, in the view of the court, mean each business or a particular business. The phrases ‘a business’ in the provision has’ referenee to any business and not each of the businesses has to be understood in that context. The learned Judge held that if the landlord was carrying on co-optex saree business in the Pantheon road building, which is its own, it will not be entitled to an order of eviction. That is so because on the plain reading of S. 10 (3) (a) (iii) a landlord who is carrying on a particular business in a building of his own would not be entitled to relief under the provision in respect of the same business. But, if the landlord is carrying on a different business in another building which is not his own, there is nothing in the section which debars him to have recourse to the provisions in that section in respect of that business, even though he might be carrying on another business in a building of his own. In other words, if a landlord is carrying on two different businesses, one say in jewellery, in a building of his own, and the other, say in timber, in a rented building, he would be entitled to relief under S.(10) (3) (a) (iii) for shifting the timber business to a third building which is his own but in the occupation of a tenant. In such a case the timber business of the landlord in the rented building satisfied the clause a business which he……is carrying on occurring in the above section. This is in accord with the view taken by a Division Bench of this court in C.M.P 6164 of 1950—1951 1 M.L.J, Notes of recent cases p.7 In the present case, the landlord is carrying on business in jewellery in a building of his own. If the business, Rangi medicals which is being carried on in 61, Long Bazaar, a rented building, is a business of the landlord himself the court sees no ground at all to say that the landlord would not be entitled to apply for eviction of a tenant from the premises in question under S. 10 (3) (a) (iii).”

10. The observation of a Division of this court in 83 L.W 696 that the letter ‘a’ in S. 10(3) (a)(iii) would mean ‘any’ and that that would be its plain meaning, has also to be understood on the facts of that case. If the landlord is carrying on the particular business in his own building, he cannot be heard to say that he required the premises in the occupation of the tenant for shifting that business. The mere fact that in the building, belonging to the landlord, not only the particular business but another business was also being carried on, would not mean that the landlord: would be entitled to relief under S. 10(3)(a) (iii) of the Act. But, on a plain meaning of the said provision, if the landlord is carrying on business in a building not his own, he would certainly be entitled to relief under the said provision, albeit, he is carrying on another business in a different building which is his own. The only limitation is, the claim of the landlord should be bona fide, and under the said provision, the landlord can obtain possession of only one building.

11. The legal position will boil down to this: Does the landlord seek eviction of a tenant from a non-residential building belonging to him with reference to a business, which he is cayrring on in a rented premises? If that be so, S. 10 (3) (a) (iii) would apply, albeit he is caryring on another business either individually or in partnership in the non-residential premises owned by him. This interpretation is in accordance with the object of the Act, viz.. this is not a case of unreasonable eviction. It will be rather very reasonable for a landlord to have his business which is of a different nature in the premises owned by him, rather than suffer the tenancy for all time to come, merely because he happens to be a partner in some other business which is being carried on in a portion of that non-residential premises. In the case of Muslim co-sharers, it is not unknown that fractional shares are held by them, and if the law is not to be interpreted in this manner, then it would affect the rights of a landlord, which is certainly not the policy of the Act. It is not a case of legislation at all. It is only a case of interpreting the law so as to avoid unreasonable eviction.

12. In the result, I hold the eviction petitions are maintainable under S. 10 (3) (a) (iii) of the Act, and therefore, that the finding of the lower appellate authority that S. 10 (3) (a) (iii) will not apply is clearly an error of law. However, I do not disturb the finding that the application cannot fall under S. 10(3) (c) of the Act.

13. Therefore, C.R.P 405 and 407 of 1977 which arise out of eviction petitions under S. 10 (3) (c) of the Act will have to be dismissed, and are accordingly dismissed. The other revision petitions, viz, C.R.P 406 and 408 of 1977 will stand allowed and the matter is remitted to the lower appellate court for consideration on merits on the evidence on record. No costs. It will be open to the parties to let in such evidence as they may desire, and the learned appellate authority will consider the need therefore, in his discretion. The appellate authority is directed to dispose of the appeals on or before 30th November 1977.

VCS