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Full Bench Opinion Summary — I.S. Tiwana, J. (with JJ. Sandhawalia and Prem Chand Jain concurring)

Factual and Procedural Background

The Full Bench was called upon to determine the true import and scope of a State Government notification dated June 3, 1959 issued under section 3 of the East Punjab Urban Rent Restriction Act. The notification directed that the provisions of that Act "shall not apply to the buildings and rented lands belonging to Municipal Committee N.A Cs., District Boards or Panchayats." By virtue of transitional provisions (section 22 of the Punjab General Clauses Act) this notification continued to operate under the Haryana Urban (Control of Rent Restriction and Eviction) Act, 1973 (the Act).

The dispute arises from admitted facts: the demised premises consisted of two rooms — one constructed by the petitioner-landlord on his own land and the other constructed by him on land leased from the Municipal Committee, Gurgaon. Both rooms were let to the respondent-tenant at the same time, forming a single tenancy. The tenant applied under section 12 of the Act seeking permission to carry out repairs (roof leakage) at the landlord's cost. The landlord admitted the landlord-tenant relationship but invoked the June 3, 1959 notification to contend that the Rent Controller lacked jurisdiction because the land under the room in need of repair belonged to the Municipal Committee.

The Rent Controller accepted the landlord's jurisdictional plea and dismissed the tenant's application. On appeal, the Additional District Judge, Gurgaon (appellate authority), concluded that the superstructure had been raised by the landlord (lessee of the Municipal Committee), the landlord-tenant relationship was admitted, and consequently the Rent Controller had jurisdiction; the appellate authority remanded the matter back to the Rent Controller for fresh consideration on merits. The landlord-petitioner impugned that appellate order by a petition under section 15(6) of the Act, leading ultimately to the present Full Bench determination.

Legal Issues Presented

  1. What is the true import and scope of the State Government notification dated June 3, 1959 issued under section 3 of the East Punjab Urban Rent Restriction Act (i.e., whether and when the notification bars jurisdiction of rent authorities in respect of premises on municipal land)?
  2. Whether, in law, land and a superstructure erected on leased land can constitute two distinct ownerships (the lessor owning the land and the lessee owning the superstructure), and how that principle affects the jurisdiction of the Rent Controller under the notification.
  3. Whether the Single Bench decision in Kirpal Singh v. Parabhjot Singh (1970 72 PLR 431), which treated the superstructure as belonging to the Municipal Committee where it rested on municipal land, correctly stated the law.

Arguments of the Parties

Appellant (petitioner-landlord)

  • Asserted that where construction is raised on land taken on lease from the Municipal Committee, the superstructure also belongs to the Municipal Committee; relied primarily on Kirpal Singh v. Parabhjot Singh (1970 72 PLR 431) in support.
  • Maintained that the notification of June 3, 1959 confers immunity from the Act in respect of premises belonging to the Municipal Committee and thus the Rent Controller had no jurisdiction.
  • Contended the Act and the notification intend to confer immunity on premises leased out by the Municipal Committee (i.e., the nature of the premises matters), implying that if the municipal land is the subject matter then the Rent Controller cannot proceed.

Respondent (tenant)

  • Challenged the correctness of Kirpal Singh and argued that the superstructure had been raised by the landlord and that the landlord-tenant relationship between the parties was admitted, so the Rent Controller had jurisdiction to entertain the tenant's application under section 12.
  • The appellate authority accepted that, held the Rent Controller had jurisdiction, and remanded the matter for fresh decision on merits.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Raghu Nath Jalota v. Ramesh Duggal, 1979 2 R.L.R. 457 The Division Bench held that an appellate authority under section 15(3) has no jurisdiction to remand the whole case to the Rent Controller. The Court relied on this authority to set aside the impugned order of the appellate authority (which had remanded the case) and directed that the matter be dealt with in accordance with law rather than permitting an improper remand.
Kirpal Singh v. Parabhjot Singh, 1970 72 PLR 431 Held (by a Single Judge) that where superstructures were constructed on municipal land without the committee's consent, the superstructures belonged to the Municipal Committee and thus fell within the notification's exemption. The Full Bench examined this decision, found it misconstrued the legal position on ownership of superstructures on leased municipal land, and expressly overruled Kirpal Singh.
Narain Das v. Jatindra Nath, AIR 1927 PC 135 The Privy Council approved the observation that there is no absolute rule in the law of this country that whatever is affixed or built on the soil becomes part of it and subject to the same rights of property as the soil. Used to support the proposition that the ownership of a building raised on leased land may belong to the lessee rather than to the owner of the land; the Court relied on this to show two distinct ownerships are legally possible.
Thakoor Chunder Proamanick v. Ramdhone Bhuttachsbarjee, 6 Suth J.R. 228 (observations of Sir Barnes Peacock) Observed that there is no absolute rule that attachments to the soil become part of it under Indian law. The Full Bench noted approval of this observation by the Privy Council and treated it as part of the line of authority rejecting an absolute rule that buildings automatically become part of land.
Vallabhdas Naranji v. Development Officer, Bandra, 1928 56 I.A. 259 Reaffirmed the position that the English doctrine (that buildings belong to the owner of the land) is not directly applicable in India; quoted Couch, C.J.'s view that in India the builder on another's land should be allowed to remove materials. Relied upon to reinforce the principle that Indian law permits distinction between ownership of land and superstructure and that the builder/lessee may acquire rights in the structure.
Narain v. Bholagir, 6 Bom. H.C. A.C.J. 80 (Couch, C.J.) Couch, C.J. held that the English doctrine should not be applied in India and that the party building on another's land should be allowed to remove the materials. Quoted with approval to support the proposition that buildings need not automatically belong to the landowner in India.
Laxmipat Singhania v. Larsen and Toubro Ltd., AIR 1951 Bom 205 Tendolkar, J. followed the Privy Council line of cases recognizing the distinctness of ownership between land and superstructure in appropriate cases. Noted by the Court as a later judicial instance following the Privy Council principle that supports the possibility of separate ownership.
Dr. K.A. Dhairyawan v. J.R. Thakur, 1959 S.C.R. 799 Supreme Court held that upon proper construction of the lease there was demise only of the land and not of the building; ownership in the building was with the lessees; affirmed that there is no absolute rule that affixed things become part of the soil. Adopted as authoritative support for the principle that the terms of the lease determine whether the building belongs to the lessor or the lessee; used to conclude that superstructure ownership depends on contractual terms.
Bhatia Cooperative Housing Society Ltd. v. D.C. Patel, AIR 1953 SC 16 The Supreme Court recognised that where a plot of land is demised, the plot can belong to the lessor and the superstructure to the lessee; but whether that is so depends on the facts and the contract. Relied on to show that Indian law accepts the possibility of two distinct ownerships and that determination is fact- and contract-specific; used to support the Full Bench conclusion that the terms of the lease must be examined.

Court's Reasoning and Analysis

The Full Bench proceeded in the following analytical steps, relying strictly on the materials and authorities cited in the opinion:

  1. Distinction of concepts: The Court began by noting that "building" and "rented land" are separate concepts defined respectively in clauses (a) and (f) of section 2 of the Act. This distinction was acknowledged by both parties and formed the starting point for analysis.
  2. Survey of authoritative law: The Bench reviewed a line of authorities (Privy Council and later Indian courts) establishing that there is no absolute rule in Indian law that whatever is affixed to the soil automatically becomes part of it and the property of the soil-owner. The authorities showed that, as a matter of law, ownership of land and ownership of a superstructure erected by a lessee can be distinct and that the decisive factor is the lease's terms.
  3. Treatment of Kirpal Singh: The Bench examined the reasoning of Kirpal Singh v. Parabhjot Singh (the Single Judge decision relied on by the petitioner), noting the passages where that judge treated the superstructure as belonging to the Municipal Committee because the land belonged to it. The Full Bench found that approach to misconstrue the legal position established by higher and earlier authorities and concluded that Kirpal Singh was incorrect on the point; it expressly overruled that decision.
  4. Application to present facts: The Court observed that the actual lease terms between the petitioner and the Municipal Committee were not placed before the Court. On the admitted facts, however — namely that the petitioner (lessee of the Municipal Committee) raised the construction on the leased land and that the petitioner leased the constructed rooms to the respondent — the Court concluded it could not hold that the building belonged to the Municipal Committee. Between the petitioner and the respondent, what was demised was the building (the two rooms). Thus, on these admitted facts, the Rent Controller had jurisdiction to entertain the tenant's section 12 application.
  5. Response to petitioner's contention on immunity: The Court addressed the argument that the notification confers immunity in rem (i.e., immunity attaches to the premises if the Municipal Committee is the owner) and explained that even if the notification grants immunity to premises leased by the Municipal Committee, that does not preclude a different legal analysis as between the petitioner and his tenant where the petitioner has raised a superstructure and demised that superstructure. The Court emphasized that the question is what was actually let out to the tenant in a particular case.
  6. Disposition consistent with procedural precedent: While the appellate authority had remanded the matter to the Rent Controller, the Full Bench considered the Division Bench authority (Raghu Nath Jalota) holding that an appellate authority under the Act could not remand the whole case to the Rent Controller. In light of that authority and the substantive conclusion on ownership and jurisdiction, the Full Bench set aside the impugned order and directed that the case be dealt with in accordance with law.

Holding and Implications

Holding:

The Full Bench (I.S. Tiwana, J., with S.S. Sandhawalia, J. and Prem Chand Jain, J. concurring) allowed the petition. The Court held that:

  • The notification dated June 3, 1959 does not automatically render a superstructure on leased municipal land the property of the Municipal Committee; "building" and "rented land" are distinct legal concepts.
  • Indian law recognizes the possibility of two distinct ownerships — land may belong to the lessor while the superstructure raised by the lessee may belong to the lessee — and the decisive inquiry is the terms and substance of the lease between the lessor (Municipal Committee) and the lessee.
  • On the admitted facts of this case (and in the absence of the terms of the lease between the petitioner and the Municipal Committee), the Court could not hold that the building belonged to the Municipal Committee; between the petitioner and the respondent the demised item was the building, and accordingly the Rent Controller had jurisdiction to hear the tenant's application under section 12.
  • The Single Judge decision in Kirpal Singh v. Parabhjot Singh (1970 72 PLR 431) was found to have misconstrued the law and was overruled.
  • The impugned appellate order (which had remanded the matter to the Rent Controller) was set aside in view of the Court's reasoning and the Division Bench authority in Raghu Nath Jalota; the matter was sent back for decision afresh in accordance with law.

Implications:

  • Direct effect on the parties: The petition was allowed; the impugned appellate order was set aside and the case was remitted for fresh decision in accordance with the Full Bench's legal conclusions. The Rent Controller (and appellate processes) must treat questions of ownership by reference to the lease terms and the specific item actually demised to the tenant.
  • Legal clarification: The Full Bench clarified and reiterated the settled principle (supported by Privy Council and Supreme Court authorities) that there is no absolute rule that a structure affixed to the soil becomes part of the land; ownership of a superstructure depends on the terms and circumstances of the lease. It expressly overruled Kirpal Singh where that case had taken a contrary approach.
  • Scope and limits: The Court emphasized that the question is fact- and contract-specific; the consent or non-consent of a Municipal Committee to the construction is not by itself decisive. The decision does not purport to decide ownership in every factual permutation but sets out the correct legal approach and overrules the contrary Single Judge authority.

Disposition recorded in the opinion: "Petition allowed."

    Hari Parshad Gupta v. Jitender Kumar Kaushik .

    I.S Tiwana, J.:— What is the true import and scope of the State Government Notification dated June 3, 1959, issued under section 3 of the Fast Punjab Urban Rent Restriction Act, 1947 is the precise question which calls for determination by this Full Bench. This notification reads as follows:—

    “In exercise of the powers conferred by section 3 of the East Punjab Urban Rent Restriction Act, the Governor of Punjab is pleased to direct that the provisions of the aforesaid Act shall not apply to the buildings and rented lands belonging to Municipal Committee N.A Cs., District Boards or Panchayats.”

    2. Though this notification was issued in exercise of the powers conferred by the East Punjab Urban Rent Restriction Act, yet it is the conceded position that it continued to surviue and be effective under the present Act, that is, the Haryana Urban (Control of Rent Restriction and Eviction) Act, 1973 (hereinafter referred to as the Act), which came into force with effect from April 27, 1973, in view of the provisions of section 22 of the Punjab General Clauses Act.

    3. The few skeletal facts which deserve to he noticed to unravel the controversy raised in this petition under section 15(6) of the Act are as follows:—

    “The desmised premises consist of two rooms, one constructed by the petitioner-landlord on his own lard and the other constructed by him on the land taken on lease from the Municipal Committee, Gurgaon. Both these rooms were rented out to the respondent-tenant at one and the same time and thus one tenancy came into being. As the roof of the room on the municipal land started leaking and required immediate repairs and the repeated efforts of the respondent failed to persuade the petitioner to carry out those repairs, he filed the present application under section 12 of the Act praying therein that he may be allowed to carry out the necessary repairs at the cost of the landlord. The petitioner while admitting the relation ship of landlord and tenant between the parties pleaded the ‘bar of jurisdiction’ with the Rent Controller on the basis of the above notification. His precise plea was that since the land underneath the room rented out to the respondent belonged to the Municipal Committee, the Rent Controller had no jurisdiction in the matter. As a result of the trial that followed, the Rent Controller upheld this plea and dismissed the application of the respondent tenant. On an appeal by the latter, the appellate authority (Additional District Judge, Gurgaon) held that though the land underneath the superstructure had been taken on lease by the petitioner from the Municipal Committee and thus belonged to it, yet the superstructure thereon having been raised by the landlord (lessee from the Municipal Committee) and the relationship of landlord and tenant having been admitted between the parties, the Rent Controller had all the jurisdiction to entertain and decide the present application filed under section 12 of the Act. As a result of this conclusion, appellate authority remanded the case back to the Rent Controller for decision afresh on merits. It is this order of the appellate authority dated September 9, 1980, which is now impugned by the landlord-petitioner in this petition.

    4. When the case was argued before me in Single Bench, I was inclined to allow this petition in view of the Division Bench judgment of this Court in Raghu Nath Jalota v. Ramesh Duggal 1979 2 R.L.R 457., wherein it has been held that an appellate authority under section 15, subsection (3) of the Act has no jurisdiction to remand the whole case to the Rent Controller; but since the learned counsel for the petitioner maintained that the finding of the appellate authority to the effect that the Rent Controller had the jurisdiction to entertain and decide the present application, was untenable, I allowed the matter to be argued in detail.

    5. In support of his contention that if a construction is raised on a piece of land taken on lease from the Municipal Committee then the superstructure also belongs to the committee, the learned counsel for the petitioner placed primary reliance on a Single Bench judgment of this Court in Kirpal Singh v. Parabhjot Singh 1970 72 PLR 431. which undoubtedly supports this contention of his. Since the learned counsel for the respondent earnestly challenged the correctness of this judgment. I thought it proper to refer the matter to a larger Bench.

    6. During the course of argument before the Division Bench, the question of law as to whether there can be two distinct ownerships one of the land and the other of the superstructure-assumed importance and was urged with some amount of vehemence on either side, it was shought proper by the Bench to place this matter before a Full Bench in view of the remifications-not under the rent law alone-the decision of this point of law was going to have. That is how the matter is before us now.

    7. To me it appears abundantly clear that ‘building’ and ‘rented land’ as referred to in the above said notification, are two different concepts or identifies and have respectively been defined in clauses (a) and (f) of section 2 of the Act. In fact this factual and legal position has neither been disputed by the learned counsel for the parties nor can possibly it be. So it is in the light of this that the legal position has to be construed with regard to the rights of the lessor and the lessee in cases in which lease of a plot of land is obtained and the leasee after putting up superstructure thereon leases it out further. This aspect of the matter came up for consideration of their Lordships of the Privy Council as early as in the year 1927 in Narain Das v. Jatindra Nath AIR 1927 PC 135., and their Lordships while pointing out distinction in the relevant law prevailing in England and this country, approved the following observations of Sir Barnes Peacock in the case of Thakoor Chunder Proamanick v. Ramdhone Bhuttachsbarjee 6 Suth J.R 228.:—

    “We have not been able to find in the laws or customs of this country any traces of the existence of an absolute rule of law that whatever is affixed or built on the soil becomes a part of it subjected to the same rights of property as the soil itself.”

    8. In a still Ialer case, that is, Vallabhdas Naranji v. Development Officer, Bandra 1928 56 I.A 259., the Privy Council once again referred to Sir Barnes Peacock's observations as stateed above. In this judgement the following observations of Couch, C.J in Narain v. Bholagir 6 Bom. H.C A.C.J 80., were quoted with approval:—

    “We cannot, however, apply to cases arising in India the doctrine of the English law as to buildings, viz., that they should belong to the owner of the land. The only doctrine which we can apply is the doctrine established in India that the party so building on another's land should be allowed to remove the materials.”

    9. This legal position as enunciated above by the Privy Council was later followed by Tendolkar, J. (as his Lordship then was) in Laxmipat Singhania v. Larsen and Toubro Ltd AIR 1951 Bom 205., and was approved by the Supreme Court in Dr. K.A Dhairywan v. J.R Thakur 1959 S.C.R 799.. In the latter case the Supreme Court, while considering a similar notification under the provisions of Bombay Rents, Hotel and Lodging House Control Act, 1947, held as under:—

    “Upon a proper construction of the lease there was a demise only of the land and not of the building and consequently the provisions of the Act did not apply to the contract for delivery of possession of the building. The ownership in the building was with the lessees and in which the lessors had no right while the lease subsisted. There was no absolute rule of law in India that what was affixed or built on the soil became part of it, and was subject to the same rights of property.”

    10. Yet in another case, that is, Bhatia Cooperative Housing Society Limited v. D.C Patel AIR 1953 SC 16., the Supreme Court recognised and upheld the abovenoted proposition of law that where a plot of land had been demised, the said plot can continue to belong to the lessor and the building or the superstructure raised by the lessee on that plot can belong to the latter. However, in the given facts and circumstances of that case it was held by the Supreme Court that the building too belonged to the lessor. Thus it is abundently clear from the above authoritative pronouncements that in law there can be two distinct ownerships, that is, the lessor can be the owner of the plot and the lessee can be the owner of the building raised thereon, and the matter essentially is dependent on the terms of the contract between the parties. The factum of consent or no consent by the Municipal Committee or the local authority to the construction raised by the lessee on the demised municipal land is not decisive of the matter. It is the form and the substance of the terms of lease entered into between the Municipal Committee and the lessee that have to be considered and construed to find out whether the building on the leased land belonged to the Municipal Committee or not. Examining the ratio of Kirpal Singh's case (supra)-firmly relied upon by the learned counsel for the petitioner in the light of the above settled proposition of law. I find that the learned Judge, deciding that case had misconstrued the legal position. The following observations made by the learned Single Judge in that case indicate the approach adopted:—

    “The superstructures have been constructed on the land by Parabhjot Singh, without the consent of the Municipal Committee and they have not yet accord their consent to the construction of the superstructures either impliedly or expressly. Therefore, the position is that the land on which the superstructures stand, being Municipal land, it is exempt from the provisions of the East Punjab Urban Rent Restriction Act in view of the notification…….It appears that both the Rent Controller and the Appellate Authority were obsessed with the idea that the superstructures is something apart from the land but this contention would only mean that the superstructures hang in the air and do not rest on Municipal land.”

    11. At one stage the learned counsel for the petitioner sought to urge that neither the learned Judge has recorded a positive finding that the superstructure raised by Parabhjot Singh lessee from the Municipal Committee without the consent of the latter belonged to the Municipal Committee nor does he maintain anything of the sort. If this stand of the learned counsel is accepted, then on what basis the learned counsel maintains or has been held by the learned Judge that the superstructure in that case too was not outside the scope of the abovenoted notification, has not been explained by him in any manner. From a reading of the abovenoted judgment of the learned Single Judge I am clear that the learned Judge has held that since the land underneath the superstructure raised by Parabhjot Singh lessee belonged to the Municipal Committee, the superstructure too belonged to the Municipal Committee. It is only on this basis that the learned Judge concluded:—

    “It appears to me, therefore, that the decision of the Rent Controller as well as the Appellate Authority cannot be sustained so far as the Rent Restriction Act is concerned because the provisions of this Act have been expressly kept in abeyance so far as the municipal land is concerned.”

    12. Thus we are of the opinion that the above noted judgment in Kirpal Singh's case (supra) does not lay down the correct law and has to be overruled which we do.

    13. In the case in hand the terms and conditions of the lease entered into between the petitioner and the Municipal Committee, Gurgaon, are not before us. ‘n the absence of the same and on the basis of the admitted facts that the petitioner has raised the construction OD the land which he had taken on lease from the Committee and it was this construction which had been leased but to the respondent tenant by the petitioner it cannot possibly be held that the building in this case too belongs to the Municipal Committee, Gurgaon. As between the petitioner and the respondent what has been leased out is the building, that is the two rooms including the one constructed by the petitioner on the municipal land, Thus apparently the Rent Controller had the jurisdiction to go into the matter.

    14. In order to find flaw with the abovenoted conclusion of ours the learned counsel for the petitioner pointed out that the Act and the notification referred to above, intend to confer immunity from the operation of the Act to the premises leased but by the Municipal Committee and not to the relationship of landlord and tenant. He maintains that in the light of the abovenoted conclusion of ours in a case brought by the Municipal Committee against the petitioner, it would have to be held that the Act does not apply to the demised property in view of the abovenoted notification whereas in the present case between the parties it has been held that the Act does apply though in both the cases the same property, that is, the plot of land taken on lease by the petitioner, is the subject-matter of litigation. To my mind, the learned counsel completely misconstrued the legal position. It is beyond dispute that the Legislature did intend to confer immunity from the Act on the premises leased out by the Municipal Committee but that does not mean that the petitioner or the lessee by changing those premises into a different type of premises, that is, converting the rented land into building by raising construction on the plot of land demised in his favour, does not lease out a different premises to his tenant or lessee or the respondent in this case. It may be that in case an action is brought by the Municipal Committee against the petitioner, the petitioner may not be in a position to successfully plead that by raising a construction on the plot of land demised in his favour he has changed the nature of the premises rented out to him as he cannot unilatarally change the nature of his tenancy, but this does not mean that what he has leased out to the respondent, is a plot of land and not a building. As already pointed out the building and rented land being two separate and distinct entities, what was rented out to the petitioner was the land and what the petitioner had rented out to the respondent was the building. The answer to the whole issue is dependent on the question, what was actually let out by the landlord to a tenant in a particular case. Thus having held that the authorities under the Act have the jurisdiction to determine and decide the application of the respondent tenant, filed under section 12 of the Act, the impugned order of the appellate authority is set aside in view of the decision of this Court in Raghu Nath Jalot's case (supra) and the case is sent back to it for deision afresh in accordance with law.

    15. S.S Sandhawalia, J.:— I agree.

    16. Prem Chand Jain, J.:— I also agree.

    R.M.S
    Petition allowed.

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    Comments

    Hari Parshad Gupta v. Jitender Kumar Kaushik .
    (Nov 30, 1981)