K. Rengaswamy Naidu v. The Tamil Nadu Handl..., Madras High Court, Judgment, Law, casemine.com

Citation Codes

Equivalent Citations

citation codes

Case Number

860 of 1979

Attorney(S)

M.Veluswamy
K.Ramamurthy

Judges

Mr. Justice R. Sengottuvelan

Acts

Section 10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act. Section 10(3)(a)(iii)
Rent Control) Act, and the Rules
Section 7(3)(a)(iii), the section
Section 10 (3)(a)(iii)
Section 7(3)(a)(iii)
Rent Control) Act,

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Smart Summary

Factual and Procedural Background

The civil revision petitioner is the landlord of a non-residential building (Door No. 18, Main Road, Sattur, Ramanathapuram District). The respondent was a tenant in that building, paying monthly rent of Rs. 135; the premises were occupied by the Co-optex Sales Emporium. The landlord filed H.R.C.C. No. 5 of 1978 before the Rent Controller, Sattur, seeking eviction on the ground that he required the premises for his own hotel business.

The landlord's factual account was that he and his son had been running a hotel business for over 50 years in a rented building (Door No. 255, Trunk Road, Sattur) belonging to Krishnaswamy Naicker. Under pressure from Krishnaswamy Naicker and pursuant to legal proceedings, the landlord entered into a compromise dated 13 March 1977 and vacated that building, executing a possession receipt (Exhibit A-4). The landlord claimed he had no other non-residential building and therefore genuinely required the subject premises for his hotel business; he served a termination notice dated 5 December 1977 (Exhibit A-5). The respondent did not comply and sent a reply.

The respondent's case before the Rent Controller challenged procedural sufficiency (alleging the petition was not in proper form and required particulars under the Tamil Nadu Buildings (Lease and Rent Control) Act and Rules were missing). The respondent also raised substantive defences: questions about who was the actual tenant (possession originally given to a Junior Marketing Officer and not the Special Officer, Tamil Nadu Handloom Weavers' Society), a history of rent enhancement demands by the landlord, inconsistency between those demands and the later eviction notice, assertion that the building was unsuitable for hotel use (no kitchen, no water supply, other necessary amenities), and the contention that the landlord owned other buildings, rendering his claimed need not bona fide.

The Rent Controller accepted the landlord's case and granted eviction. The tenant appealed to the Subordinate Judge of Ramanathapuram at Madurai (C.M.A. No. 97 of 1978). The appellate authority held that for invocation of Section 10(3)(a)(iii) the landlord must prove that he was actually carrying on the hotel business, and the evidence showed he could not have been carrying on the business on the date of the petition; accordingly the appellate court allowed the appeal and set aside the eviction order. The landlord filed the present civil revision petition challenging that appellate decision.

Legal Issues Presented

Whether, for the purpose of claiming eviction under Section 10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, the landlord must be actually carrying on the business (here, running a hotel) at the time of making the eviction claim.
Whether the landlord's asserted requirement of the premises is bona fide, having regard to (a) allegations that the building is unsuitable for hotel business and (b) the landlord's ownership of other buildings (as raised by the respondent).

Arguments of the Parties

Civil Revision Petitioner (Landlord) — Principal Contentions

He and his son had carried on a hotel business for more than 50 years; that long history was not disputed by the tenant.
He conducted the hotel business from rented premises belonging to Krishnaswamy Naicker and, after pressure and legal proceedings, entered into a compromise dated 13 March 1977 and vacated those premises (possession receipt Exhibit A-4).
He had no other non-residential building of his own; therefore his need for the subject premises to continue the hotel business was genuine and bona fide.
He served a termination notice dated 5 December 1977 (Exhibit A-5) terminating the tenancy and seeking possession by the end of December 1977; the respondent failed to comply and sent a reply raising alleged false allegations.

Respondent (Tenant) — Principal Contentions

The eviction petition was not in proper form and omitted material particulars required under the Tamil Nadu Buildings (Lease and Rent Control) Act and its Rules.
The lease was entered into on 10 January 1972 and possession was handed to the Junior Marketing Officer, Regional Office, Madurai; therefore the Special Officer, Tamil Nadu Handloom Weavers' Society, Madras, is not a tenant under the landlord.
The landlord had repeatedly demanded enhanced rent (e.g., a demand on 25 January 1974 for Rs. 200, and later demands including a letter of 23 September 1977 seeking Rs. 250), which the respondent opposed — making the later lawyer's notice (Exhibit A-5) claiming landlord's personal need appear inconsistent.
The building was unsuitable for running a hotel (no kitchen, inadequate water supply and other necessary amenities), and the landlord owned other buildings; hence the claimed requirement was not bona fide.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
T.K. Krishna Iyer v. Karur Vysia Bank Limited, Coimbatore	The statute's phrase "a business which he is carrying on" (appearing in the analogous Section 7(3)(a)(iii) in that reported case) requires that the claimant be actually carrying on the business at the date of filing the application; past conduct or future intention to carry on the business is insufficient.	The Court applied the precedent to the present facts: as the landlord had transferred his entire hotel business to Krishnaswamy Naicker (possession/transfer per Exhibit A-4) and had done nothing showing he was carrying on the hotel business at the time of the eviction claim, the statutory requirement was not satisfied and eviction could not be ordered under Section 10(3)(a)(iii).

Court's Reasoning and Analysis

The Court began from the statutory text of Section 10(3)(a)(iii) (as cited in the opinion) which, in effect, allows a landlord to seek possession of a non-residential building if the landlord "is carrying on" a business for which he needs the building and does not have a building of his own in the locality. The Court emphasised that the statute requires the landlord to be actually carrying on the business at the time of the eviction claim.

The Court relied on the reasoning in T.K. Krishna Iyer v. Karur Vysia Bank Limited, where a similar issue arose: the earlier decision held that a person who had carried on a business in the past, but had ceased to have any interest in that business (because of a settlement transferring the business away), and who had not done any act showing he was carrying on or preparing to carry on the business on the date of the application, could not be treated as "carrying on" the business for the statutory purpose. The earlier judgment rejected equating past activity or future intention with present conduct.

Applying that precedent and statutory wording to the present facts, the Court noted the following factual findings from the record:

The landlord had handed over the entire hotel business to Krishnaswamy Naicker as per Exhibit A-4, which showed the transfer occurred on 14 June 1978.
In his evidence (as P.W.2) the landlord did not point to any acts or circumstances from which it could be inferred that he was carrying on a hotel business at the time of filing the eviction application.
Although the landlord had prior experience in running hotels, that historical experience did not satisfy the statutory requirement of actually carrying on the business at the relevant date.

For these reasons, the Court concluded that the statutory condition in Section 10(3)(a)(iii) was not met. The appellate court's conclusion — that the landlord was not carrying on the hotel business at the time of his claim and therefore was not entitled to eviction under Section 10(3)(a)(iii) — was correct and was affirmed by the present Court.

Holding and Implications

Holding: The civil revision petition is dismissed.

Implications:

The appellate decision reversing the Rent Controller and dismissing the eviction application stands; the landlord is not entitled to evict the respondent under Section 10(3)(a)(iii) on the facts of this case because he was not actually carrying on the hotel business at the date of his claim.
The decision's immediate effect is to deny the landlord the eviction relief he sought; there is no order as to costs.
The opinion applies and follows existing precedent (T.K. Krishna Iyer) rather than announcing a new rule of law; no new legal principle or precedent is created by this judgment beyond its application to the facts before the Court.

Source: Summary based exclusively on the provided opinion text.

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K. Rengaswamy Naidu v. The Tamil Nadu Handloom Weavers Co-Operative Society Limited, Through The Marketing Officer

1. The civil revision petitioner before this Court is a landlord in respect of non-residential building bearing Door No. 18, Main Road, Sattur, Ramanathapuram District. The respondent herein had been a tenant in the said building, under the civil revision petitioner, on a monthly rent of Rs. 135 and the building is being occupied by the Co-optex Sales Emporium. The civil revision petitioner filed an application in H.R.C.C. No. 5 of 1978 on the file of the Rent Controller, Sattur for eviction of the respondent herein, on the ground that he required the premises for his own hotel business. The case of the civil revision petitioner before the House Rent Controller is that himself and his son had been running a hotel business in a rented building bearing Door No. 255, Trunk Road, Satturv belonging to Krishnaswamy Naicker, son of Guruswami Naicker. The said Krishnaswamy Naicker had been pressing the tenant, the civil revision petitioner herein to vacate the aforesaid building. He also started legal proceedings and under a compromise entered into between the said Krishnaswamy Naicker and the civil revision petitioner herein under a document dated 13th March, 1977, the civil revision petitioner herein was bound to vacate the building and he accordingly vacated the premises as per the possession receipt Exhibit A-4. The civil revision petitioner had been conducting the hotel business for the past more than 50 years and he cannot afford to close down his business. He has no other non-residential building of his own. Hence his requirement is genuine and is bona fide. The civil revision petitioner sent a notice to the respondent on 5th December, 1977, marked as Exhibit A-5, terminating the tenancy with the last day of December, 1977, and calling upon him to deliver vacant possession to the civil revision petitioner. The respondent did not comply with the notice and sent a reply raising false allegations.

2. The case of the respondent, the tenant in respect of the petition mentioned premises, before the House Rent Controller is that the petition is not in proper form and the material particulars required under the Tamil Nadu Buildings (Lease and Rent Control) Act, and the Rules are not furnished. The lease was entered into on 10th January, 1972, and the possession was handed over to the Junior Marketing Officer, Regional Office, Madurai, and hence the Special Officer, Tamil Nadu I Iandloom Weavers' Society, Madras is not a tenant under the civil revision petitioner. After a lapse of two years from the commencement of the tenancy, the civil revision petitioner on 25th January, 1974, marked as Exhibit R-6 demanded an enhanced rent of Rs. 200 per month to which the Junior Marketing Officer replied that it is not possible to pay any enhanced rent. Subsequently also the civil revision petitioner sent letters demanding enhanced rent. On 23rd September, 1977, the civil revision petitioner sent another letter marked as Exhibit B-17 to the Marketing Officer, Madurai, demanding an enhanced rent of Rs. 250. But strange enough the civil revision petitioner had sent a lawyer's notice on 5th December 1977, marked as Exhibit A-5 stating that he requires the premises for his own use and occupation. The respondent herein sent a reply on 28th December, 1977, marked as Exhibit A-7. It is also the case of the respondent herein before the House Rent Controller that the petition mentioned building is not suitable for running the hotel business since there is no kitchen, water-supply and other necessary amenities, which are necessary for running the hotel business and the civil revision petitioner owns other buildings also and hence the requirement of the building by the landlord is not borra fide.

3. The learned Rent Controller on a consideration of the evidence in the case came to the conclusion that the landlord made out a case and allowed the application for reviction. As against the said order, the tenant, respondent herein filed an appeal before the appellate authority and the Subordinate Judge of Ramanathapuram at Madurai in CM.A. Mo. 97 of 1978. The appellate authority holding that for the purpose of invoking Section 10 (3)(a)(iii) the landlord should prove that he is actually carrying on the hotel business and the evidence in this case showed that the civil revision petitioner could not have carried on the business on the date of the petition as claimed by him and as such the civil revision petitioner is not entitled to an order of eviction under Section 10 (3)(a)(iii). As against the said order this civil revision petition has been filed.

4. It is urged on behalf of the civil revision petitioner that the fact that the landlord has continued the hotel business for the past 50 years is not challenged by the tenant. The fact that he was conducting the hotel business in the premises of one Krishnaswamy Naicker is also not disputed and that he had to vacate the same at his instance is also not seriously challenged by the respondent therein. The case of the civil revision petitioner is that inasmuch as he had been conducting the hotel business and since he had vacated the premises in which he had conducted the hotel business and since he is not in possession of any non-residential building of his own he is entitled to evict the tenant, the respondent herein, under Section 10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act. Section 10(3)(a)(iii) reads as follows:

The landlord may, subject to provisions of Clause (d) apply to the Controller for an order directing the tenant to put the landlord in possession of the building....

(iii) in case it is any other non-residential building, if the landlord or (any member of his family) is not occupying for the purpose of a business which he or (any member of his family) is carrying on, a non-residential building in the city, town or village concerned which is his own.

As per the section the landlord must be carrying on the business at the time of his claim for eviction so as to enable him to put forward a claim under Section 10(3)(a)(iii). In the case reported in T.K. Krishna Iyer v. Karur Vysia Bank Limited, Coimbatore , the civil revision petitioner was conducting a coffee hotel business in a rented premises in the name and style of "Ranjitha Vilas". After he found that he could not acquire possession of the building in which he was conducting the business he entered into a family settlement with his brother and his son under which the business became the exclusive property of the brother and the son. By reason of the settlement the landlord ceased to have any interest in the business, as effectively as if the business has been sold away in Court-auction in execution of a decree which some creditor had obtained against the landlord. After the landlord ceased to have any interest) in the business he desired to start a business of his own as a coffee hotel proprietor. He had been a coffee hotel proprietor all his life and had the skill and experience needed for starting and conducting such business. He subsequently purchased a building with a view to conduct in it the business known as "Ranjitha Vilas". Since that business had ceased to be his and since he desired to start a new business of the same kind, he claimed possession of the building from the tenant occupying the building he had purchased. On these facts Subrahmanyam, J., held that in view of the phrase used viz., "a business which he is carrying on" in Section 7(3)(a)(iii), the section would apply only to cases where a person is conducting a business in a building which is not his and which he is bound to vacate under an order or decree of a civil Court or any other authority. Since the landlord who claimed that he required the premises for his own business had not done any act in the way of carrying on or preparing for carrying on a business as hotel proprietor on the date on which he filed the application, the landlord was held to be not entitled to an order of eviction. Even though he wanted to become a hotel proprietor again it would not render him on the date on which he made the application a person who was carrying on a business as hotel proprietor. He was on that date a person who had done business in the past as a hotel proprietor and who was intending to do business in the future as hotel proprietor. Such a person cannot be said to be a person who is carrying on a business. To hold otherwise would be to delete from Section 7(3)(a)(iii) the words "which he is carrying on", a function which the Court is powerless to perform. With these observations the learned single Judge held that the landlord is not entitled to evict the tenant from the premises the landlord had purchased.

5. The facts of the above case are similar to the case under revision. Here also the landlord who was conducting a business as a hotel keeper had put an end to his business and delivered the entire hotel business as a going concern to his landlord Krishnaswamy Naicker as per Exhibit A-4, On a reading of Exhibit A-4 it shows that the entire business was handed over to Krishnaswamy Naicker on 14th June, 1978. After transferring the entire business to Krishnaswamy Naicker, the landlord had not done anything by which it can be said that he is carrying on the hotel business. In his evidence before the Rent Controller as P.W. 2 the landlord who is the civil revision petitioner herein had not spoken to anything from which the landlord's carrying on a hotel business can be inferred. No doubt the civil revision petitioner had a rich previous experience in running the hotel but that will not help him in any way in getting the tenant evicted. Subrahmanyam, J., in T.K. Krishna Iyer v. Karur Vysia Bank Limited, Coimbatore , observed as follows:

It is true that the avocation of hotel proprietor was with him an old avocation and that nothing more was natural than that he should want to become a hotel proprietor again. But that would not render his on the date on which he made the application a person who was carrying on business as a hotel proprietor.

6. On the same reasoning the civil revision petitioner herein cannot be said to be carrying on a hotel business for which he needed the premises. Since the requirement of the Section 10(3)(a)(iii) of the Tamil Nadu buildings (Lease and Rent Control) Act, that the landlord should be actually carrying on the business is not complied with in this case the appellate Court acted rightly in allowing the appeal and dismissing the rent control application

7. There are no merits in this civil revision petition and the same is dismissed.

8. There well he no order as to costs.

K. Rengaswamy Naidu v. The Tamil Nadu Handl...