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Ammasai Gounder v. Lakshmiammal

Madras High Court
Nov 3, 1995
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Summary of the Opinion

Factual and Procedural Background

The revision arises from an eviction proceeding (R.C.O.P. No. 71 of 1981) initiated by the respondent-landlord under Section 10(2)(ii)(b) of the Tamil Nadu Buildings (Lease and Rent Control) Act ("the Act"). The petitioner is the tenant of premises leased by agreement dated 2.11.1979 at a monthly rent of Rs. 250 for a non-residential purpose. The landlord alleged that the tenant, who had been running a hotel for some time, installed a lathe and obtained a three-phase connection and thereby used the premises for a purpose other than that for which it was leased, justifying eviction for change of user.

The Rent Controller (District Munsif, Coimbatore) tried the eviction petition and, by order dated 12.2.1987, directed eviction with three months' time to vacate, holding that the lease must be considered to have been for running a hotel and that the tenant had changed user without the landlord's consent. The appellate authority (Sub-Court, Coimbatore) confirmed that order by its judgment dated 31.10.1988. The tenant filed the present revision challenging the concurrent findings of the two lower authorities.

Legal Issues Presented

  1. Whether the tenant's use of the premises (installation of a lathe, obtaining three-phase connection and starting a workshop) constituted a change of user attracting eviction under Section 10(2)(ii)(b) of the Act.
  2. Whether the lease, which described the premises for non-residential use (and as a "shop" in analogous authorities), was sufficiently specific to restrict user to running a hotel (or a particular trade), or whether a lease silent on a specific trade permits the tenant to carry on any non-residential business compatible with the character of the demised premises.

Arguments of the Parties

Appellant's (Tenant's) Arguments

  • The lease was not for the purpose of running a hotel exclusively; it did not specify a particular trade or business.
  • Although the tenant had run a hotel for some time, he later started a workshop for his own use; this did not amount to putting the premises to a different user that would attract eviction under Section 10(2)(ii)(b).
  • The lower authorities erroneously read into the lease a specific purpose not warranted by the nature of the written agreement or the parties' intention.

Respondent's (Landlord's) Arguments

  • The findings and conclusions of the Rent Controller and the appellate authority—that the premises were let for running a hotel and that the tenant changed the user without consent—are in accordance with law and require no interference.
  • Counsel for the landlord (Mr. Krishnaswami) contended that the wording of the lease should be read in the context of the business being conducted immediately prior to and at the time of the tenant's induction, and that the parties' intention was that the lease be for running a hotel only.
  • The landlord relied on the factual finding about prior and immediate post-induction use of the premises as a hotel to support eviction for change of user.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ram Dayal v. Ram Charan Dass, (1981) 1 R.C.J. 161 Where a rent note/lease describes premises simply as a "shop" without specifying a particular business, the tenant may use it for any purpose a shop can be used for; change of user arises only if premises cease to be used as a shop. A specific stipulation in the lease limiting use to a particular trade is necessary to make later use for a different trade a change of user. The Court expressed agreement with this exposition and relied on it to hold that a lease which only indicates non-residential use cannot be read as limiting user to a hotel unless specifically so stipulated.
Des Raj's case (Full Bench) Principle that if a lease identifies premises as a "shop" without further restriction, the permissible uses are those generally associated with a shop; specific restriction in the lease is necessary to limit permissible uses. Referenced (via Ram Dayal) as supporting authority for the proposition that silence in the lease about a particular trade precludes finding a change of user where the premises continue to be used as a shop.
T.M. Ramaswamy Gounder v. Ranganayaki, 1990 T.L.N.J. 122 Where lease deed does not specify the purpose, tenant may carry on any business provided it is not injurious to the demised premises; landlord must establish the specific purpose of letting before claiming eviction for change of user. The Court relied on this decision to support the proposition that the landlord bears the burden of proving the specific purpose for which premises were let when the lease is silent, and that a general description does not create a restrictive covenant on use.
M.K. Palaniappa Chettiar v. Ponnuswami Pillai, (1970) 2 S.C.C. 91 Authoritative Apex Court decision relied upon for principles concerning permissible uses where lease is silent (as relied upon in T.M. Ramaswamy Gounder). Cited by the court (through T.M. Ramaswamy Gounder) as supporting the principle that specificity in the lease is necessary before a landlord can successfully claim eviction for change of user.
Gurdial Batra v. Raj Kumar Holdings that (a) change of user complained of may not always give cause for eviction and (b) landlord must prove injury or prejudice resulting from the change in user; relied on earlier decision Mohan Lai v. Jai Bhagwan. Used to illustrate authority where the Apex Court held that change of user (cycle/rickshaw repair shop used partly for sale of televisions) did not necessarily warrant eviction and that prejudice must be shown by the landlord.
Mohan Lai v. Jai Bhagwan Earlier Apex Court decision relied upon for the proposition that landlord must show injury or prejudice to succeed in eviction proceedings for change of user. Referenced by the court as part of the jurisprudence which requires consideration of prejudice when claiming eviction for change of user.
S.P. Sabapathi Pillai v. M. Durga Case where premises let for hotel business were used as a shop selling cool drinks and betelnut; the court held that in absence of landlord's consent, the tenant was liable to be evicted. The decision did not seriously discuss whether absence of prejudice would preclude eviction. Referred to by the respondent; the present Court observed that that decision does not contain detailed discussion on the absence-of-prejudice point and therefore could not be treated as authoritative for the broad proposition the landlord sought.
Kailashchand Jain v. Mohamed Karim, (1995) 1 M.L.J. 67 Lease specifying particular kinds of shops (jewellery, textile, medical) was later used for pawn-broking; eviction was sustained. The decision considered change in the purpose or extent of purpose and did not deeply engage with the requirement of proving prejudice. The Court noted that this decision addressed cases where the lease itself specified purposes, and thus it was not analogous to the present case where the lease did not specify a particular trade.

Court's Reasoning and Analysis

The Court examined the pleadings, documentary record, oral evidence and several cited authorities. It framed the legal question around the construction of the lease and the statutory provision in Sub-section (2) of Section 10 of the Act, particularly Clause (ii)(b), which makes a tenant liable to eviction if he uses the building for a purpose other than that for which it was leased without the landlord's consent.

The Court's analysis proceeded on these principal points drawn from the opinion:

  • The Act is intended to protect tenants' interests while also safeguarding landlords against misuse of statutory protection; thus restrictions on tenant use under the eviction provision must be read strictly and with reference to the lease's expressed terms.
  • Where the lease does not specify a particular trade or business and identifies the premises only by a broad classification (for example, non-residential or as a "shop"), the permissible uses are those consistent with that broad character. Change of user under Section 10(2)(ii)(b) requires a change in the character of user for which the building had been let out.
  • The authorities relied upon by the landlord (decisions where the lease expressly limited use to specific businesses) are distinguishable because those cases turned on explicit stipulations in the lease restricting user to particular trades; such decisions do not support reading a specific restrictive purpose into a lease that is silent on the point.
  • The Court applied the principles laid down in the cited precedents (notably Ram Dayal and T.M. Ramaswamy Gounder) to hold that in the absence of a specific stipulation in the lease, the lower authorities erred in construing the lease as limited to hotel business simply because the premises had been used as a hotel prior to and at the time of the tenant’s induction.
  • The Court observed that, in such cases where the lease is silent on a particular trade, a landlord seeking alternate relief may pursue remedies available under Section 10(2)(iii) of the Act, if the statutory requirements for that provision are satisfied.

Holding and Implications

The revision is allowed and the orders of the authorities below are set aside.

Direct consequences:

  • The eviction order dated 12.2.1987 by the Rent Controller and the appellate order dated 31.10.1988 confirming eviction are quashed; the tenant is relieved from the eviction directed by those orders.
  • There will be no order as to costs.
  • The Court noted that where a lease does not specify a particular business, the landlord may still seek relief under Section 10(2)(iii) of the Act if the statutory conditions for that provision are fulfilled.

Broader implications:

This opinion rests on established interpretive principles and authorities addressing when a lease specifying only a broad non-residential character will or will not permit varied uses. The Court treated the matter as one of construing the lease strictly in light of the Act's object; the decision operates to prevent eviction under Section 10(2)(ii)(b) where no specific restrictive purpose is expressed in the lease. The opinion does not state that it establishes a new legal precedent beyond applying these principles to the facts before it.

Show all summary ...

1. The above revision has been filed against the order of the appellate authority - Sub-Court, Coimbatore, exercising the powers under the Tamil Nadu Buildings (Lease and Rent Control) Act (hereinafter referred to as "the Act") confirming the order of the Rent Controller - District Munsif, Coimbatore, dated 12.2.1987 in R.C.O.P. No. 71 of 1981.

2. The petitioner before this Court is the tenant and the respondent is the landlord of the premises in question. There is no dispute over the position that the petitioner became the tenant pursuant to the lease agreement dated 2.11.1979 on a monthly rent of Rs. 250 for non-residential purpose. On the ground that the lease was for the purpose of carrying on business in hotel and in disregard of the same, the petitioner-tenant is doing business by installing a lathe and obtaining three phase connection, the respondent-landlord has filed R.C.O.P. Nd.71 of 1981 under Section 10(2)(ii)(b) of the Act contending that the tenant is liable to be evicted for having used them premises for a purpose other than that for which it was leased out. The petitioner-tenant contended that the lease was not for the purpose of running a hotel, that though the tenant was running a hotel for sometime, thereupon he wanted to start a workshop for the use of his own and that the tenant cannot be accused of having put the leased premises into a different use, so as to attract liability under Section 10(2)(ii)(b) of the Act.

3. On the above pleadings and claims, the Rent Controller tried the petition for eviction and by his order dated 12.2.1987 ordered eviction granting three months' time for vacating the premises holding that the lease in question must be considered to have been only for the purpose of running a hotel in view of the fact that prior to the induction of the petitioner as a tenant as also immediately thereafter, the portion in question was being used only for the purpose of running a hotel business and that, therefore, it should be considered that there had been a change of the purpose of the lease without the consent or permission of the landlord. Aggrieved, the petitioner filed an appeal before the appellate authority and the learned appellate authority also confirmed the conclusions and findings of the learned Rent Controller and rejected the appeal R.C.A. No. 20 of 1987 by his order dated 31.10.1988. Hence, the above revision by the tenant.

4. Mr. Santhanagopalan, learned Counsel for the tenant contended that the authorities below have committed a grave error in reading into the lease agreement a purpose unwarranted either on the nature of the agreement or the intention of the parties and that the petitioner could not be said to have violated Section 10(2)(ii)(b) of the Act and rendered himself liable to be evicted on that account. The learned Counsel for the respondent/landlord adopted the reasonings assigned by the authorities below in support of his contention and claimed that the findings and conclusions arrived at by the authorities below are in accordance with law and do not call for any interference by this Court in exercise of its revisional jurisdiction.

5. Learned Counsel on either side took me at great length through the orders of the authorities below as also the relevant documents and the oral evidence on record. My attention has been drawn to several judgments in support of the respective stand, of which I intend referring to some of the decisions relevant and directly on the issue for the consideration of the points raised before me in this revision.

6. In Ram Dayal v. Ram Charan Dass (1981) 1 R.C.J. 161, J.V. Gupta, J. as the learned Judge then was, had an occasion to deal with the claim of a landlord before the learned Judge seeking ejectment of a tenant from the shop on the ground of change of user under Section 13(2)(ii)(b) of the East Punjab Urban Land Restriction Act, 1949, which is in pari materia with the provision under consideration in this case. That was a case wherein the rent note or lease deed, as it was called, there was no mention about any particular business or trade to be carried on thereunder. The learned Judge on a careful analysis of the purpose underlying the provision of the nature providing for eviction on the ground of change in the user of the premises, has held as hereunder:

As observed earlier, admittedly the demised premises were let out vide rent note Ex. A-8 dated 23.9.1964. There is no mention in the said rent note that the shop was let out for any particular business. The only mention therein is that only one storeyed shop is being rented out. Once it is so found that the demised premises were let out as a shop and not for doing any particular business then the question of change of user will only arise if the demised premises are not used as a shop, and not otherwise. In this behalf, the observation of the Full Bench in Des Raj's case, in para 13 thereof are very relevant which are to the following effect:

If the record is innocent of any evidence, oral or documentary, indicating expressly or circumstantially the use to which the premises described as a 'shop' in the rent note were to be put by the leases, then the purpose to which the demised premises can be put by the virtue of its identification as 'shop' in the rent note would be a purpose to which a shop can be put and not a purpose to which demised premises could be put if the same had been merely identified as 'non-residential' "building". Again, assuming that the expression shop connotes premises which can be used for the purpose of carrying on wholesale or retail business of sale and purchase, then if the demised premises are only identified as 'shop' (and if the lease deed is silent about the specific purpose for which the shop was to be used), then the business of sale and purchase, whether wholesale or retail, could be carried out in the said shop by the lessee in every kind of merchandise or article without attracting the provisions of Section 13(2)(ii)(b) of the Act i.e., he could carry on therein the retail or wholesale business of cloth merchant or of a Halwai or of a hardware or of a cycle-repairs and so on and so forth. But if in lease deed besides identifying the building as 'shop', it is further mentioned that the same is given for the purpose of running a cloth merchant's business then such an expression would limit the use of the shop for the purpose of carrying on wholesale or retail business of cloth, and the lease without attracting the provisions of Section 13(2)(ii)(b) of the Act would not be able to use the shop for a purpose other than the one mentioned in the lease deed. If afterwards, he were to start using the shop as hardware merchant or as a Halwai, he would be considered to have changed the user of the premises and would be liable for eviction on that ground.

No case as such has been cited at the bar on behalf of the landlord that if the premises were let out as a shop then on oral evidence, it would be held that it was let out for a particular business only. Of course, it may be that in be absence of any rent note or lease deed, oral evidence may be admissible to prove the purpose for which the premises were let out but if the premises were let out as a shop only without specifying in the rent note any particular business or trade to be carried therein then it could not be successfully argued on behalf of the landlord that there is a change of user even if the premises are being used as a shop. In that situation, it becomes immaterial that in the beginning of the tenancy the premises were used as a tea shop or hotel and later on the tenant started his business of selling and repairing cycles. Simply because the tenant admitted that he started a tea shop at the time of letting out the premises to him did not debar him to plead and prove that was not the only business for which the premises were let out to him. Thus there being a rent note on the basis of which the premises were let out as a shop without mentioning any particular business or trade to be carried therein, it could not be held that there was a change of user because in the beginning the tenant was running a tea shop or hotel whereas at present he was carrying on the business of selling and repairing cycles. The approach of the Courts below in this behalf is obviously wrong and illegal. Thus findings under issue No. 5 is liable to be set aside.

I am in entire agreement with the exposition of law made by the learned Judge.

7. In T.M. Ramaswamy Gounder v. Ranganayaki 1990 T.L.N.J. 122, Govindasamy, J. had an occasion to deal with the claim of eviction on the ground of change of user of the premises. That was also a case wherein the lease deed did not specify the purpose for which it was demised at the time of taking the premises on lease. The learned Judge, in such a situation, held that it is open to the tenant to carry on any business provided that such carrying on business is not injurious to the demised premises. The learned Judge has chosen to place reliance upon a decision of the Apex Court in M.K. Palaniappa Chettiar v. Ponnuswami Pillai (1970) 2 S.C.C. 91 to come to such a conclusion. It was highlighted by the learned Judge that it is obligatory on the part of the landlord in case of such a claim to establish the purpose for which it was let, before the landlord could seek for eviction on the ground of change in the user.

8. In Gurdial Batra v. Raj Kumar , the Apex Court was concerned with a claim relating to eviction on the ground of change of user under Section l3(2)(ii)(b) of the East Punjab Urban Land Restriction Act, 1949. On the facts of the said case, the use to which the premises was let out pursuant to the lease was for running a cycle and rickshaw repairing shop and it seems that the same was, on the contrary, used for the sale of televisions along with service of televisions. In dealing with such a claim, the Apex Court apart from holding that the change of user complained off in that case was not such as to give a cause of action to the landlord to seek eviction of the tenant, also held that the landlord must also prove injury or prejudice on account of change in the nature of business complained off. To come to such a conclusion, reliance appears to have been placed on the earlier decision of the apex Court in Mohan Lai v. Jai Bhagwan .

9. Per contra, learned Counsel for the respondent-landlord referred to some of the judgments, to which a reference may be made hereinafter. In S.P. Sabapathi Pillai v. M. Durga , Pratap Singh, J. had an occasion to consider the claim for eviction on the ground of change in the user of premises let out on for hotel business, being used for running a shop for sale of cool drinks and betelnut by shopping entirely the hotel business. The learned Judge held that in the absence of consent obtained from the landlord the tenant incurred liability for being evicted. When the plea based on the absence of prejudice or injury to the landlord on account of such change in the user was pressed before the learned Judge relying upon the decisions in Gurdial Batra v. Raj Kumar and Mohan Lal v. Jai Bhagwan , it was rejected by the learned Judge holding.

In the instant case before me, I am unable to hold that the present purpose for which it was used can be called an allied business.

I do not find any serious discussion in the said decision as to the point whether absence of prejudice could be held to disentitle the landlord from getting eviction of the ground of change of user.

10. In Kailashchand Jain v. Mohamed Karim , Thangamani, J. had an occasion to consider the claim for eviction on the ground of change of user. In the said case, the lease appeared to have been for the purpose of carrying on a jewellery shop, a textile shop and a medical shop. But, it was also used for running pawn broker's trade. On the above facts, the learned Judge sustained the order of eviction made by the authorities below. Even in that decision, the decisions in Gurdial Batra v. Raj Kumar and Mohan Lal v. Jai Bhagwan have been relied upon. The learned Judge adverted to this judgment from the angle of change in the purpose or the extent of change in the purpose for which the lease was granted and there was no detailed discussion or consideration about the need for the landlord further showing any prejudice or injury before getting an order of eviction on the ground of change in the user of the premises. In addition to the above, the learned Counsel on either side drew my attention to some of the judgments with reference to the principles to be taken note of in construing a document and the extent of permissibility of oral evidence to construe the recitals in a document. There can be no dispute over the fundamental principle that whenever the language of the document is ambiguous and not clear, the courts are not precluded from referring to the oral evidence to arrive at the real purpose and purport of the document concerned. But, that is a matter which would depend upon the nature of the document and the problems posed before the court and the nature or extent to which such reliance could be placed upon the oral evidence to adjudicate on the issue raised in a particular case before court. In view of the same, I avoid referring to the line of decisions referred to on this subject.

11. Mr. Krishnaswami, learned Counsel appearing for the respondent-landlord vehemently contended with particular reference to the use of the words, in the lease agreement as, that the word will necessarily refer to "shop" or the nature of the business which was being conducted immediately prior to the induction of the petitioner-tenant and even thereafter when he commenced occupation of the demised premises and viewed in that context, it should be considered that the intention of the parties was only that the lease was for the purpose of running a hotel business and not any other business.

12. Learned Counsel for the landlord contended that the word without any further adjective or indication would colloquially mean and have, reference only to the non-residential nature of the business in contrast to the residential occupation, which used to be ordinarily referred as The authorities below have chosen to place reliance upon the factual position that prior to the induction of the petitioner as also immediately on such induction, the nature of the business that has been carried on in the premises. In my view, the approach of the authorities below cannot be considered to be one in accordance with law since the lease was not shown to be along with the transfer of any particular business also. The very Act is meant to protect the interests of the tenants and while so doing, the Act also has engrafted certain provisions to safeguard the interests of the landlord from being unnecessarily exploited by the statutory protection accorded under the provisions of the Act. Sub-section (2) of Section 10 of the Act and particularly Clause (ii)(b) provides that without the consent of the landlord if the tenant has used building for a purpose other than that for which it was leased, he rendered himself liable for eviction. In my view, it requires to be considered strictly keeping in view the avowed object and purpose of the Act as a whole. Otherwise it will defeat the very object of the law and worth great hardship. Thus viewed, I am of the Opinion that unless it is specified with certainty the purpose of the lease and the change in the user by the lessee in contravention of such specified purpose, no restriction could be read into the agreement which would have the effect of imposing the tenant to a liability not warranted under the Act itself for eviction. The decisions of the learned single Judge of this Court to which reference has already been made would go to show that the learned Judges were concerned in those cases of a claim of change in the user in the teeth of a specific stipulation about the very purpose of the lease itself, unlike in the present case. Consequently, in my view no inspiration could be drawn by the learned Counsel for the respondent-landlord from the decisions in S.P. Sabapathi Pillai v. M. Durga and Kailashchand Jain v. Mohamed Karim (1995) 1 M.L.J. 67. At the same time, it is made clear that the agreement in question in this case cannot be said to have omitted to specify anything about the nature of the lease. Reference to the word must in my view be considered as having reference only to the broad classification, namely, whether the lease was for residential or non-residential purpose. What matters in a case of a claim like this is that the change in user must be change in the character of the user for which alone the building had been let out. In my view and in the light of the conclusion as above that the user for which it was let was only nonresidential without any further restriction, the authorities below could not have legitimately come to the conclusion that there had been a violation of See 10(2)(ii)(b) of the Act. In such cases, it is always open to the landlord to claim relief under Section 10(2)(iii) provided the requirements are satisfied. Consequently, the orders of the authorities below suffer from serious illegality and patent irregularity and therefore, are liable to be set aside. The revision is allowed and the orders of the authorities below are set aside. There will be no order as to costs.