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citation codes
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Acts
  • provisions of Sections 5 and 6 of the Burma Shell (Acquisition of Undertakings in India) Act, 1976,
  • Sections 5 and 6 of the Burma Shell (Acquisition of Undertakings in India) Act, 1976
  • sub-section (1) of Section. 21 of the Rent Control Act,
  • Section 21(1) of the Karnataka Rent Control Act,
  • Section 21(1) of the Rent Control Act,
  • Section 106 of the T.P Act.
  • TRANSFER OF PROPERTY ACT
  • State Rent Control Acts
  • Section 115 C.P.C3.
  • Section 115 C.P.C
  • Rent Control Acts
  • Rent Control Act.
  • Nadu Rent Act
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • provisions of Sections 5 and 6 of the Burma Shell (Acquisition of Undertakings in India) Act, 1976,
  • Sections 5 and 6 of the Burma Shell (Acquisition of Undertakings in India) Act, 1976
  • sub-section (1) of Section. 21 of the Rent Control Act,
  • Section 21(1) of the Karnataka Rent Control Act,
  • Section 21(1) of the Rent Control Act,
  • Section 106 of the T.P Act.
  • TRANSFER OF PROPERTY ACT
  • State Rent Control Acts
  • Section 115 C.P.C3.
  • Section 115 C.P.C
  • Rent Control Acts
  • Rent Control Act.
  • Nadu Rent Act
Smart Summary

Structured Summary of the Opinion (Division Bench — Murlidher Rao, J.)

Factual and Procedural Background

The respondent (landlord) had leased premises to the petitioner (tenant) by a lease deed dated 10-5-1954 for a term of 10 years with an option to renew for a further 10 years. A second lease deed was executed on 23-7-1963 containing an option clause enabling the tenant to exercise the option.

On 25-3-1973 the tenant sent a notice expressing willingness to exercise the renewal option; that initial notice was not served on the landlord. Subsequently the tenant caused a notice to be served through his representative. Meanwhile the landlord initiated eviction proceedings before the Munsiff, Gulbarga.

After appreciation of evidence, the Munsiff on 15-4-1981 allowed the landlord's petition and granted a decree for eviction. The tenant filed CRP (HR) No. 15 of 1981 before the District Judge, Gulbarga. By order dated 3-2-1982 the District Judge confirmed the Munsiff's order and dismissed the revision. The tenant then filed the present Revision Petition to this Court under Section 115 CPC.

The learned Single Judge had referred the Revision Petition to a Division Bench by order dated 15-3-1984 because the law laid down in K. Gurusiddaiah v. A. Vittal Bhat (1983 1 Kar. L.J. 443) required reconsideration in view of certain Supreme Court decisions.

Legal Issues Presented

  1. Whether the law laid down in the Single Judge decision in K. Gurusiddaiah (1983 1 Kar. L.J. 443) — namely that a landlord must have a right of re-entry (and therefore, in a term lease, cannot initiate eviction proceedings before expiry of the lease) — requires reconsideration in view of subsequent Supreme Court authorities.
  2. Whether, in cases of term lease, a landlord must first determine the contractual tenancy (for example by issuing notice under Section 106 of the Transfer of Property Act) before initiating proceedings under Section 21(1) of the Karnataka Rent Control Act.
  3. Whether the tenant's contractual rights (including any purported extension exercised by the tenant or rights arising under Sections 5 and 6 of the Burma Shell (Acquisition of Undertakings in India) Act, 1976) prevent the landlord from instituting proceedings under Section 21(1) of the Rent Control Act.

Arguments of the Parties

Appellant / Tenant (Mr. Sundaraswamy)

  • The tenant contended that the contractual rights under the lease continue to subsist and, therefore, notwithstanding Section 21 of the Rent Control Act, the tenant is not liable to be evicted until the expiry of the lease term.
  • The tenant argued that unless the landlord acquires a right of re-entry, the landlord cannot institute proceedings under Section 21(1) of the Rent Control Act.
  • The tenant also raised a contention under Sections 5 and 6 of the Burma Shell (Acquisition of Undertakings in India) Act, 1976.

Respondent / Landlord (as reflected in the proceedings and findings below)

  • The landlord instituted eviction proceedings under Section 21(1) of the Karnataka Rent Control Act. The Munsiff and the District Judge found the landlord's requirement to be bona fide and reasonable and held that greater hardship would be caused to the landlord than to the tenant if eviction were refused.
  • These factual findings (bona fides of requirement and comparative hardship) were affirmed by the two courts below and were regarded by the Division Bench as unassailable on revision under Section 115 CPC.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
K. Gurusiddaiah v. A. Vittal Bhat (1983 1 Kar. L.J. 443) Held that before initiating proceedings under Section 21(1) of the Karnataka Rent Control Act the landlord should have a right of re-entry; in term leases the landlord has no such right before expiry and eviction proceedings before expiry would be premature. The Division Bench examined and concluded that this Single Judge view is not correct in light of Supreme Court authority and must be overruled.
V. Dhanapal Chettiar v. Yeshodai Ammal (1979) 4 SCC 214; AIR 1979 SC 1745 Explained that under State Rent Acts the determination of the contractual tenancy is not a prerequisite for initiating eviction; the Rent Acts have curtailed landlord's common-law/contractual rights and made prior termination of the lease an unnecessary technicality. The Division Bench relied on this Supreme Court enunciation (including a quoted passage) as authoritative and decisive to hold that landlords may initiate eviction under Section 21(1) notwithstanding an existing contractual term.
Firm Saradarilal Vishwanath v. Pritam Singh (1979 1 S.C.R 111) Reiterates the legal position consistent with the Supreme Court's approach to Rent Acts (referenced in the order of reference). The Division Bench treated this decision as consistent with the principle that a landlord can initiate eviction proceedings despite a term lease; it was cited in the order of reference as supporting reconsideration of Gurusiddaiah.
Bhaiya Punhall Bhagwanddin v. Dave Bhagwatprasad Prabhuprasad (AIR 1963 SC 120) Earlier authority relied upon by Single Judge decisions (including Gurusiddaiah and some Single Judge precedents) concerning landlord's rights under property law. The Division Bench held that reliance on this 1963 decision (AIR 1963 SC 120) by the Single Judge is not correct in view of the subsequent 7-Judge pronouncement in Dhanapal Chettiar which altered the legal position.
P. Venkanna v. Janadri Venkanna Setty (1981 1 Kar. L.J 568) Full Bench decision holding that before initiating eviction under Section 21(1) of the Rent Control Act it is not necessary for the landlord to determine the tenancy by issuing notice under Section 106 of the Transfer of Property Act. The Division Bench relied upon this Full Bench decision (which itself relied upon the Supreme Court in Dhanapal Chettiar) as supporting the proposition that contractual determination is unnecessary before instituting eviction under Section 21(1).
B. Sundara alias Sarvothamma Baliga v. Purushotham Baliga (1964 1 Kar. L.J 8) Single Judge decision based on reasoning in AIR 1963 SC 120 (and thus premised on the pre-Dhanapal legal position). The Division Bench stated that this decision is based on the 1963 ruling which does not hold in view of the subsequent Supreme Court authority; accordingly, its reasoning is not sound and it is overruled.
Pralhad Hucharao Chitgupi v. Hubli Ginning & Trading Co. Ltd. (1974 2 Kar. L.J 416) Single Judge decision holding that landlord must have acquired a right of re-entry (either by law or contract) before initiating proceedings under Section 21. The Division Bench held this reasoning overlooked the non-obstante clause in Section 21(1) and, for reasons given (relying on Supreme Court authority), considered the reasoning unsound and overruled the decision.

Court's Reasoning and Analysis

The Division Bench confined itself to the specific question of law referred by the Single Judge: whether the Single Judge's ruling in Gurusiddaiah should be reconsidered in light of Supreme Court authority.

  1. The court identified the Single Judge's central holding in Gurusiddaiah: that a landlord must have a right of re-entry and, in the case of a lease for a fixed term, no such right exists before the lease expires; consequently, filing eviction proceedings before expiry would be premature.
  2. The court analysed the effect of the Rent Control Act on pre-existing contract and common-law concepts (such as the landlord's right of re-entry). It observed that Rent Control statutes have altered the legal position and curtailed the role of contractual or Transfer of Property Act remedies in determining entitlement to possession.
  3. The court relied on the Supreme Court's decision in V. Dhanapal Chettiar v. Yeshodai Ammal (a 7-judge Bench) which expressly stated (quoted at length in the opinion) that under State Rent Acts it is often an "empty formality" to require a landlord to determine the contractual tenancy before instituting eviction; determination under the Transfer of Property Act is not necessary to entitle the landlord to recover possession under the Rent Acts.
  4. In view of that binding pronouncement by the Supreme Court, the Division Bench held that the Single Judge's reliance on AIR 1963 SC 120 (the Bhaiya Punhall line of authority) was misplaced. The later and authoritative Supreme Court pronouncement in Dhanapal Chettiar displaces the earlier reasoning.
  5. The court noted that a Full Bench of this Court (P. Venkanna v. Janadri Venkanna Setty) had already held that no determination under Section 106 of the Transfer of Property Act is necessary before initiating eviction under Section 21(1) of the Rent Control Act and that the Full Bench relied on the Supreme Court's 1979 authority.
  6. The opinion emphasised the statutory character of Section 21(1), in particular the non-obstante clause ("notwithstanding anything to the contrary contained in any other law or contract"), which the court interpreted as having overriding effect and making Section 21(1) applicable even when a contract provides for a stipulated term of tenancy.
  7. Applying these principles, the Division Bench concluded that the landlord may initiate proceedings under Section 21(1) even during the subsistence of a term lease if the statutory conditions are satisfied. Consequently, the court overruled the contrary Single Judge decisions (including Gurusiddaiah and the two Kar. L.J. decisions of 1964 and 1974).
  8. With respect to the tenant's submissions (including reliance on contractual rights and the Burma Shell Act), the bench held that the statutory rights under the Rent Control Act eclipse contractual rights to the extent inconsistent, and therefore the tenant's arguments did not prevail in law. The court also noted that on the facts the lower courts had found the landlord's requirement bona fide and that those findings were unassailable on revision under Section 115 CPC.
  9. The Division Bench also addressed remedial and practical questions: it dismissed the revision petition but granted the tenant time to vacate until the end of April 1985 on condition of regular payment of rent as they accrue; no costs were awarded. Lastly, the court refused the tenant's oral request for a certificate of fitness to appeal to the Supreme Court, stating that no substantial question of law of general importance remained.

Holding and Implications

Holding: The Revision Petition is dismissed.

Implications:

  • The Division Bench held that a landlord may initiate eviction proceedings under Section 21(1) of the Rent Control Act even in respect of an existing term lease; the landlord need not first determine the contractual tenancy by notice under the Transfer of Property Act (Section 106). This conclusion was grounded on the Supreme Court's ruling in V. Dhanapal Chettiar and related authorities and on the non-obstante clause in Section 21(1).
  • The court expressly overruled the Single Judge decisions which required a right of re-entry or prior termination of the contract before initiating eviction proceedings (including K. Gurusiddaiah (1983 1 Kar. L.J. 443) and the two earlier Single Judge decisions reported at 1964 (1) Kar. L.J. 8 and 1974 (2) Kar. L.J. 416).
  • On the facts, the lower courts' findings that the landlord's requirement was bona fide and that refusal of eviction would cause greater hardship to the landlord were left undisturbed as unassailable on revision under Section 115 CPC.
  • Practical order: the tenant was given time to vacate up to the end of April 1985 on the condition of regular payment of rent as and when they accrue; no costs were imposed.
  • The court refused a certificate of fitness to appeal to the Supreme Court, indicating that no substantial question of law of general importance requiring further consideration by the Supreme Court was made out.

Note: This summary is drawn exclusively from the provided opinion text. No facts or legal conclusions beyond those contained in the opinion have been added.

    Bharat Petroleum Corporation Ltd., v. Mohammed Haneef Choohey .

    Murlidher Rao, J.:—

    This Revision Petition has been referred to a Division Bench by the learned Single Judge of this Court, by Order dated 15-3-1984 since His Lordship felt that the law laid down in K. Gurusiddaiah… v. A. Vittal Bhat…. . 1983 1 Kar. L.J 443. requires reconsideration, in view of the judgments of the Supreme Court in V. Dhanapal Chettiar v. Yeshodai Ammal . 1979 4 SCC 214 and in Firm Saradarilal Vishwanath v. Pritam Singh . 1979 1 S.C.R 111..

    2. The facts giving rise to this Revision Petition are that the respondent landlord has leased out the premises to the petitioner - tenant by a lease deed dated 10-5-1954, for a period of 10 years, with an option to the tenant to renew the same for a further period of 10 years. The second lease deed came to be executed on 23-7-1963. In the second lease deed also, there was an option clause enabling the tenant to exercise his option. On the 25th of March 1973, the tenant sent a notice to the landlord expressing his willingness to exercise his option, to renew the lease for a further period of 10 years. This was not served on the landlord. Thereafter, the tenant got served the notice through his representative, and the landlord in the meanwhile initiated these proceedings, before the Munsiff, Gulbarga. After appreciating the evidence, the learned Munsiff, on 15-4-1981, allowed the Petition and granted eviction decree. The tenant, thereafter, filed CRP (HR) No. 15 of 1981, before the District Judge, Gulbarga. The District Judge by his Order dated 3-2-1982, confirmed the Order of the Munsiff and dismissed the Revision Petition. Against these concurrent findings, the tenant has come up before this Court under Section 115 C.P.C

    3. Since this is a Revision under Section 115 C.P.C, We are not inclined to go into the factual issues of the case, concluded by the two courts below, on the basis of appreciation of evidence. However, since the Order of reference deals with only one question ‘whether the law laid down by the learned Single Judge of this Court in Gurusiddaiah's case, requires reconsideration’, we confine ourselves to that question.

    4. The learned Single Judge, in Gurusiddaiah's case, has held that, before initiating proceedings under Section 21(1) of the Karnataka Rent Control Act, the landlord should have a right of re-entry and in the case of lease for fixed term he has no such right of re-entry before the expiry of the lease period. In this context it is further held that if an eviction Petition is filed before the expiry of the term, it would be premature and incompetent. Support for this reasoning, is sought to be derived from the judgment of the Supreme Court in Bhaiya Punhall Bhagwanddin v. Dave Bhagwatprasad Prabhuprasad . A.I.R 1963 S.C 120. and two decisions of this Court, rendered by Single Judge, in B. Sundara alias Sarvothamma Baliga v. Purushotham Baliga . 1964 1 Kar. L.J 8. and Pralhad Hucharao Chitgupi v. Hubli Ginning & Trading Co. Ltd., . 1974 2 Kar. L.J 416.. In other words, the reasoning proceeds, on the footing that the lease should be determined, in the first instance, to get a right of re-entry. Obviously, the determination of lease can be only in one of the modes provided in the T.P Act, it may be either by efflux of time or by terminating the lease, by issuing notice under Section 106 of the T.P Act. But, with respect, this approach betrays the effect of altered legal position, under the Rent Control Act. The time honoured notion of existence of right of re-entry must yield place to new rights enacted by Statute. The ruling reported in A.I.R 1963 S.C 120. has been considered in Dhanapal Chettiar's Case. Dealing with this case, at paragraph 11 of the Judgment, the Supreme Court has made the following observation:

    “It is true that the Rent Act is intended to restrict the rights which the landlord possessed either for charging excessive rents or for eviction of tenants. But if within the ambit of those restricted rights he makes out his case, it is a mere empty formality to ask him to determine the contractual tenancy before institution of a suit for eviction. As we have pointed out above, this was necessary under the Transfer of Property Act as mere termination of the lease entitled the landlord to recover possession. But under the Rent Control Acts it becomes an unnecessary technicality to insist that the landlord must determine the contractual tenancy. It is of no practical use after so many restrictions on his rights to evict the tenant have been put. The restricted area under the various State Rent Acts has done away to a large extent with the requirement of the Law of Contract and the Transfer of Property Act.”

    5. The judgment in the above case has been rendered by a Bench of 7 Judges. In view of this pronouncement of the Supreme Court, the reliance placed by the learned Single Judge on A.I.R 1963 S.C 120 cannot be correct. In addition to the above, the Full Bench of this Court in P. Venkanna v. Janadri Venkanna Setty . 1981 1 Kar. L.J 568. has held that before initiating proceedings for eviction, under Section 21(1) of the Rent Control Act, it is not necessary for the landlord, to determine the tenancy, by issuing a notice under Section 106 of the T.P Act. The Full Bench has relied upon the Supreme Court Judgment referred to above i.e, (1979) 4 SCC 214 : A.I.R 1979 S.C 1745.

    6. In the Order of reference, there is a reference to yet another decision of the Supreme Court in 1979 (1) SCR 111, which reiterates this legal position. The non-obstante clause in sub-section (1) of Section. 21 of the Rent Control Act, makes it clear that the right given to the landlord is “notwithstanding anything to the contrary contained in any other law or contract”. It is obvious, the clause has an over-riding effect. It follows, therefore that even if there is a contract for a stipulated term, the law gives a right to the landlord, to initiate action, for eviction, if the conditions in the Section are fulfilled. To hold otherwise, would be making the non-obstante clause redundant. Hence, we are clearly of the view, that even in cases of ‘term lease the landlord can initiate proceedings under Section 21(1) of the Act. The view taken by the learned Single Judge in Gurusiddaiah's case is not correct and hence it has to be overruled.

    7. The two other decisions referred to by the learned Single Judge are 1964 (1) Kar. L.J 8 and 1974 (2) Kar. K.J 416. So far as the 1964 (1) Kar. Law Journal, 8 is concerned it has to be stated that it is based on the reasoning in AIR 1963 SC 120 which we have already mentioned, does not hold good in view of what is laid down by the Supreme Court in the decision reported in (1979) 4 SCC 214 : AIR 1979 S.C 1745.

    8. The other decision, which has been relied upon by the learned Single Judge is, 1974 (2) Kar. L.J 416. The learned Single Judge who decided the case in 1974 (2) Kar. L.J 416 has observed that in terms of the provisions of Section 21 of the Act the “landlord must have a right of re-entry if not anything else”. The learned Single Judge has observed that he must have acquired the right of re-entry either under the law or under a contract. In making this observation the learned Single Judge does not appear to have noticed the non-obstante clause in Section 21(1) of the Act, which makes the provision of Section 21 applicable, notwithstanding anything to the contrary in any other law or contract. That being so, for the reasons already given in the preceeding paragraphs we consider that the said reasoning adopted by the learned Single Judge is not sound, hence we overrule the cases reported in 1964 (1) Kar. L.J P. 8 and 1974 (2) Kar. L.J 416.

    9. Mr. Sundarswamy, appearing for the tenant-petitioner contended that the rights under contract are still subsisting and therefore, notwithstanding what is contained in Sec. 21 of the Act, his client is not liable to be evicted. His contention was, that till the expiry of the lease term, under the lease deed, he is entitled to continue in the premises, in spite of his liability incurred in any of the conditions laid down in Section 21 of the Act, and unless the landlord gets the right of re-entry, he cannot institute proceedings under Section 21 of the Act. The point urged by Mr. Sundarswamy should not detain us any further, in view of the enunciation made by the Supreme Court in Dhanpal Chettiar v. Yesodai Animal's case. At this stage, it is relevant to reproduce the following observations from the above decision of the Supreme Court. The Supreme Court, while dealing with the Tamil Nadu Rent Act has observed that:

    “The tenancy actually terminates on the passing of the order or decree for eviction and the building falls vacant by his actual eviction. The giving of-the notice, therefore, is a mere surplusage and unlike the law under the Transfer of Property Act it does not entitle the landlord to evict the tenant.”

    Further it is observed that:

    “It will bear repetition to say that under the Transfer of Property Act in order to entitle the landlord to recover possession determination of the lease is necessary as during the continuance he could not recover possession, while under the State Rent Act the landlord becomes entitled to recover possession only on the fulfilment of the rigour of law provided therein. Otherwise, not. He cannot recover possession merely by determination of tenancy. Nor can he be stopped from doing so on the ground that he has not terminated the contractual tenancy. Under the State Rent Control Acts the concept of the contractual tenancy has lost much of its significance and force.”

    In view of this clear enunciation, we are of the view, that the point canvassed by Mr. Sundaraswamy does not appeal to us; the contractual rights are replaced by the rights created by Statute. When the landlord seeks to enforce his right, under the statute, the contract to the contrary cannot be set up as a defence, because to that extent, the contract stands eclipsed by the Statute.

    10. In view of the above, the other contention raised by the Petitioner under Sections 5 and 6 of the Burma Shell (Acquisition of Undertakings in India) Act, 1976 does not really arise for consideration. The Petitioner has stepped into the shoes of the original tenant and therefore what applies to the original tenant, is equally applicable to the Petitioner/tenant also. Even if it is conceded that the Petitioner was allowed to exercise the option for extension of the lease period, and the lease has been so extended, nevertheless, in view of the legal position enunciated above, the right of the landlord to initiate proceedings under Section 21(1) of the Act would be available to him. That being so, neither the provisions of Sections 5 and 6 of the Burma Shell (Acquisition of Undertakings in India) Act, 1976, nor other conditions in “term-lease” can have any bearing, on the right of the landlord, to initiate eviction proceedings. On facts, the Courts below have held that the requirement of the landlord is bona fide and reasonable. They have also held, that greater hardship would be caused to the landlord, as against the tenant, if a decree for eviction is refused in favour of the landlord. This being a revision, under Section 115 C.P.C those findings are unassailable.

    11. Proceedings were initiated in the year 1974. Even if the lease had been extended, the said lease would have expired on 31-7-1983 and thereafter the position of tenant would be that of Statutory tenant and he could not enforce the terms of original contract. Since the lease is, in fact, not extended after 1983, these considerations become hypothetical.

    12. For the foregoing reasons, we hold that the Revision Petition is liable to be dismissed, hence we dismiss the same.

    13. Mr. Sundaraswamy appearing for the tenant prayed that one year's time be granted, to his client to vacate the premises. However, on the facts and circumstances of the case we consider it reasonable to grant time till the end of April, 1985, subject to the condition, that the tenant continues to pay rents regularly as and when they accrue. No costs.

    ORDER ON ORAL APPLICATION

    Mr. Sundaraswamy, learned Counsel, made an oral request for issue of certificate of fitness to appeal to the Supreme Court.

    Since we have followed the law laid down by the Supreme Court, we do not consider that any more substantial question of law of general importance which requires to be further considered by the Supreme Court would arise. Hence the leave prayed for is refused.

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    Comments

    Bharat Petroleum Corporation Ltd., v. Mohammed Haneef Choohey .
    (Jul 4, 1984)