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Case Summary — Revision Petition (M.S. Liberhan, J.)

Factual and Procedural Background

This revision petition arose against findings of the Rent Controller and the Appellate Authority which had ordered ejectment of a tenant on the ground that the tenant had materially impaired the value and utility of the demised premises.

The relevant facts, as found on appreciation of evidence and not challenged before this Court, are:

  • The tenant took on lease a shed measuring 30′ × 17′ to run an industrial unit.
  • The tenant covered an open space at the back of the shed, removed the weight-bearing back wall (resulting in the shed sheets bearing on the wall without supporting pillars), removed the grill in the common wall and broke the floor of the shed.
  • These actions were found to amount to material structural alterations to the demised premises.
  • The landlord sought ejectment under the statutory ground of "material impairment of the value or utility of the building or rented land" (Section 13(2)(iii)).
  • The Rent Controller and the Appellate Authority concluded that the alterations amounted to impairing the value and utility of the demised premises and directed ejectment; the present revision petition challenged those conclusions.
  • The petition was heard in the context of an acknowledged conflict in this Court's earlier decisions (Siri Ram v. Smt Shila Rani and Sadhu Ram v. Niranjan Dass) about whether unauthorised construction by a tenant per se amounts to material impairment.

Legal Issues Presented

  1. Whether unauthorised construction or material structural alteration by a tenant, by itself, constitutes "material impairment of the value or utility of the building" for the purpose of statutory ejectment under Section 13(2)(iii).
  2. What is the nature of the legal question — whether the issue of material impairment is purely a factual question, a question of law, or a mixed question of law and fact, and what standard or burden of proof applies to the landlord seeking ejectment on this ground.

Arguments of the Parties

Appellant (tenant) — Summary of arguments

  • The tenant's counsel argued that proof of alterations alone cannot constitute a ground for ejectment; the landlord must allege and lead cogent evidence to show that the alterations have materially impaired the value and/or utility of the building.
  • It was urged that material impairment is a question of fact that must be proved and cannot be assumed as a matter of law whenever an alteration has occurred.
  • To support this, the tenant relied on precedents including Om Parkash of Meerut Cantt. v. Amar Singh and Walaiti Ram v. Sohan Lal.
  • The tenant also contended that acceptance of rent by the landlord after the changes were made could amount to a waiver of the landlord's right to seek ejectment on that ground.

Respondent (landlord) — Summary of arguments

  • The respondent's counsel argued that no separate evidentiary proof of diminished value or utility is required beyond establishing what alterations were made; material impairment may be a matter for the Court to infer from proved facts.
  • It was urged that the impairment should be assessed from the landlord's point of view and that the Court can draw the relevant inference from the nature of the changes proved on record.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Siri Ram v. Smt Shila Rani (1982 84 PLR 591) Held that unauthorised construction by a tenant would itself amount to material impairment of value and utility. The Court declined to subscribe to this view. It held that mere proof of unauthorised construction does not as a matter of law automatically amount to material impairment; further proof or inferability is required.
Sadhu Ram v. Niranjan Dass (1983 85 PLR 73) Holds that construction by the tenant alone does not entitle the landlord to ejectment unless it is proved that the construction has materially impaired value and utility. The Court approved this approach and treated it as the correct principle: after proving construction or alteration, it must be further proved or be inferable that such alteration materially impaired value or utility.
Om Parkash of Meerut Cantt. v. Amar Singh (1987 1 SCC 458) Addressed the question of when alteration results in impairment; earlier passages indicate that permanent alteration may result in impairment, while some forms of extension/enclosure of a tin shed or temporary enclosures may not. The Court noted that Om Parkash has been used to show that the nature of the alteration matters: permanent alterations can cause impairment, whereas certain extensions/enclosures may not materially alter structure or identity.
Walaiti Ram v. Sohan Lal (1986 1 R.C.R 593) (Walaiti Ram (Sangrur)) On its facts, removal of a wall was held not to materially impair the value and utility of a building. The Court observed this decision is fact-specific and cannot be generalized as a rule that removal of every wall or alteration will or will not amount to impairment.
Sh. Om Pal v. Sh. Anand Swarup (1988-2 94 PLR 699 SC) Held that whether construction altered accommodation is a mixed question of fact and law; words "materially impaired the value and utility" should be determined by application of correct principles and may include commercial/monetary or utilitarian diminution. The Court relied on this Supreme Court observation to treat the question as a mixed question of law and fact and to guide the approach to inference and proof of impairment.
Kartar Singh v. Kesar Singh (1979 81 PLR 750) Decisions concerning alteration/impairment on their peculiar facts. The Court listed this authority among several relied upon by respondents but said these judgments are fact-specific and do not yield a general parameter for all cases.
Chatar Sain v. Bishan Lal (1976 78 PLR 178) Fact-specific precedent on alterations and ejectment. The Court treated it as one among many authorities that are not universally determinative; limited assistance due to their peculiar facts.
Smt. Nirmala v. Ishwar Chancier (1981 83 PLR 763) Another case on issues of alteration and tenant/landlord rights. Noted as fact-specific; Court found it did not provide a general rule applicable to the present issue.
Prabhu Lal v. Kalu Ram (1986 1 R.C.R 49) Authority concerning factual situations of alteration/impairment. Included in the list of cases on peculiar facts; Court said limited assistance for general principles.
Brijendra Nath Bhargava v. Harsh Wardhan (1988 1 SCC 454) A Supreme Court citation included among authorities on the subject. The Court placed it in the catalogue of precedents relied upon by parties but found no general parameter could be culled from these cases for all situations.
Amir Chand v. Sardar Arjan Singh (1987 2 R.C.R 518) Case on factual circumstances of tenant alterations. Noted as fact-specific; did not produce a universal rule for the present question.
Sudarshan Kumar v. Tejinder Singh (1987-2 92 PLR 44) Factually oriented precedent on alterations/ejectment. Listed among several judgments of limited general application; Court drew little assistance from it for a universal test.
Harish Chand (Hodel) v. Udai Bhan (Gurgaon) (1984 86 PLR 533) Authority concerning structural alteration questions on its facts. Included in the list; Court stated these decisions are on peculiar facts and not conclusive for formulating a general parameter.
Sarpat Singh Jalandhar City v. Smt. Kans Rani Jalandhar City (1986 H.R.R 294) Another case on the subject-matter on particular facts. Cited but held not to furnish an all-purpose test for impairment; fact-specific value only.
Raj Kumar v. Ram Kanwar (1987 2 R.L.R 689) Fact-specific precedent regarding alteration/impairment. Mentioned among cases that do not collectively provide a universal standard.
Ram Singh v. Banarsi Dass (1989-2 96 PLR 119) Case addressing alteration issues in its facts. Listed by the Court as part of the body of fact-specific precedents; limited assistance for an overarching rule.
Katlash Pictures v. Shri Anil C. Bhawani (1989 1 R.C.R 448) Fact-bound authority concerning alteration/tenant actions. Included in Court's catalogue of cases; not treated as establishing a universal parameter.
Smt. Indumati v. Kirpal Singh Lamba (1983 85 PLR 737) Another case on the theme of alterations and ejectment. Mentioned among many precedents of limited and fact-specific relevance; provided no single controlling test.

Court's Reasoning and Analysis

The Court proceeded by identifying a conflict in the earlier decisions of this Court (notably Siri Ram and Sadhu Ram) and by collating the unchallenged factual findings from the authorities below concerning the structural alterations made by the tenant.

Key legal and analytical steps taken by the Court:

  1. Characterisation of the legal question: The Court recognised that whether an alteration materially impairs value or utility is not a purely abstract proposition — it has been treated as a mixed question of fact and law (citing Sh. Om Pal v. Sh. Anand Swarup). Accordingly, the correctness of the inference depends on application of the right principles to the proved facts.
  2. Consideration of dictionary meaning: The Court noted the dictionary meaning of "impair" (to diminish in quality, value, excellence or strength; to make worse; to weaken) to aid interpretation of "materially impair the value or utility."
  3. Evaluation of party contentions: The Court summarised the tenant's contention that the landlord must lead cogent evidence proving impairment and that alterations per se do not suffice; conversely, the respondent contended that the Court may infer impairment from the nature of the alterations proved.
  4. Statutory and policy context: The Court emphasised that tenancy legislation restrains the landlord's rights and affords protections to tenants, so such provisions must be strictly construed. However, the statutory scheme also contemplates that a tenant shall return premises substantially in the same condition as taken (save for ordinary wear and tear). Thus, a tenant is debarred from making structural changes that materially change the character of the property.
  5. Burden and standard of proof: The Court held that once the landlord proves material or structural alteration, the landlord is required to show that the acts have resulted in material impairment of value or utility. The burden lies on the landlord but may be light — in many cases a reasonable inference of impairment can be drawn from the nature of the alterations proved. Courts must examine carefully the facts to determine whether the impairment is shown or inferable.
  6. Rejection of an absolute rule: The Court refused to accept the Siri Ram proposition that proof of unauthorised construction alone always equals impairment. Instead, it endorsed the position in Sadhu Ram that the impairment must be proved or be inferable on the facts. The Court reiterated that no single "litmus test" or rigid parameters can be universally imposed; each case must be assessed on its peculiar facts.
  7. Application to the present facts: Given the factual findings (removal of a weight-bearing back wall, lack of supporting pillars, covering of open space, removal of common-wall grill, floor breaking), the Court found it reasonable to infer that the substantial structural alterations had resulted in material impairment of value and utility in this case.

Holding and Implications

Holding:

The revision petition is dismissed and the findings of the Rent Controller and the Appellate Authority — that the tenant's structural alterations materially impaired the value and utility of the demised premises — are affirmed.

The Court ordered dismissal of the revision petition "with no order as to costs."

Immediate consequences and implications (as stated by the Court):

  • Direct effect on the parties: The Court affirmed the lower authorities' conclusion that the tenant was liable to be ejected for materially impairing the demised premises; the revision petition challenging that conclusion was dismissed.
  • On legal principle: The Court clarified that proof of unauthorised construction or structural alteration does not automatically and as a matter of law amount to material impairment in every case. Rather, the landlord must establish (or make it reasonably inferable) that the acts resulted in material impairment of value or utility; the question is a mixed question of law and fact and depends on the circumstances of each case. The burden of proof is on the landlord but may be light; courts may draw appropriate inferences from the nature of the alterations proved.
  • Precedential note: The Court expressly declined to follow the broader proposition in Siri Ram and placed reliance on the approach in Sadhu Ram and the Supreme Court's guidance in Sh. Om Pal v. Anand Swarup. The Court emphasised that many cases cited are fact-specific and do not yield a single universal test for all cases.

Signed: M.S. Liberhan, J. (with H.S. Brar, J. concurring as per the order dismissing the petition)

    Bhupinder Singh And Another v. J.L Kapoor And Another

    M.S Liberhan, J.:— This revision petition has come up before us for decision keeping in view the conflict of decisions of this Court in Siri Ram v. Smt Shila Rani . 1982 84 PLR 591. and Sadhu Ram v. Niranjan Dass . 1983 85 PLR 73.. In the former case the Hon'ble Judge took the view that unauthorised construction by a tenant would itself amount to material impairment of the value and utility of the demised premises. On the other hand in Sadhu Ram's case (Supra) the view taken is that any construction raised by the tenant by itself would not entitle the landlord to claim his ejectment unless it is further proved that such a construction has materially impaired the value and utility of the demised premises.

    2. It would be expedient to collate the facts as found on appreciation of evidence by the authorities below and not challenged during the course of arguments.

    3. The tenant took a shed measuring 30′ × 17′ on lease for running an industrial unit. He covered the open space on the back of the shed, removed the weight bearing back wall; the weight of the sheets of the shed is on the wall as no pillars have been constructed and removed the grill in the common wall. It was found that the tenant made material structural alterations in the premises in dispute. The floor of the shed was also broken. The ejectment of the tenant was sought on the ground that the material structural alterations brought about by the tenant have materially impaired the value and utility of the demised premises. Thus, the tenant is liable to be ejected.

    4. The Rent Controller as well as the Appellate Authority came to the conclusion, from the facts brought on record as reproduced above, that the alterations amounted to impairing the value and utility of the demised premises and, therefore, the tenant was liable to be rejected.

    5. The statute providing the ground of ejectment for material impairment of the value and utility of the demised premises, runs as under:—

    “13(2)(iii)—that the tenant has committed or caused to be committed such acts as are likely to impair materially the value or utility of the building or rented land.”

    6. Learned counsel for the tenant challenged the finding of the authorities below on the ground that alterations found by itself cannot form a ground of ejectment. The landlord is bound to prove as a fact that the alterations have materially impaired the value and/or utility of the building by leading cogent evidence. The material impaiment of the value and utility of the building is a question of fact and has to be alleged and proved as such. It is further urged that it cannot be said as a principle of law that as and when any material alteration and new construction is made by the tenant, it would necessarily amount to impairment of the value and utility of the demised premises. In order to support his contention, the learned counsel for the petitioners relied on Om Parkash of Meerut Cantt. v. Amar Singh . 1987 1 SCC 458, Walaiti Ram… v. Sohan Lal…. . 1986 1 R.C.R 593.. Learned counsel for the petitioners further urged that since the landlord has accepted the rent after the changes imputed to the tenant were brought about, it amounted to waiver of his right to seek ejectment on this ground.

    7. The question whether the alterations have materially impaired the value and/or utility of the demised premises is purely a question of fact or not, is no more res-integra. The Hon'ble Supreme Court in Sh. Om Pal v. Sh. Anand Swarup (dead by Lrs.) . 1988-2 94 PLR 699 SC observed that whether the construction has altered the accommodation is a mixed question of facts and law and should be determined and answered on the application of correct principles. It was observed that some reasoning which led them to conclude that materially altering the accommodation is a mixed question of facts and law would apply to the words “materially impaired the value and utility of the building”. It was further observed that construction would be of such a nature as substantially diminish the value and utility of the building either from commercial or monetary point of view or utilisation or utilitarian aspect of the building. The Hon'ble Supreme Court while observing so did take note of its earlier judgment reported in Om Parkash's case (supra) to the effect that the mere extension of a tin shed on an open land adjacent and mud wall construction, enclosure with bamboo tatters would not amount to materially altering the structure substantially either in form or in character without destroying its identity.

    8. The dictionary meaning of ‘impair’ was also taken note of viz. to diminish in quality, value excellence or strength of anything, to make worse, to weaken to enfeeble, reduce or diminish in quantity or quality.

    9. The learned counsel for the respondents refuted the submissions made by the learned counsed for the petitioners and argued that no evidence is required to prove material impairment of the value and/or utility and the only evidence required to produce is what are the changes brought about or alterations made. Material impaiment of the value and/or utility is for the Courts to infer from the facts averred proved on the record. The impairment is to be looked from the point of view of the landlord.

    10. The question posed cannot be answered as an abstract proposition. The provisions of law have to be looked into. The basis of the provisions and the object which the Legislation intended to achieve from the practical point of view and conducive to general public has to be kept in view. It is to be seen what reasonable person would regard as fair in the facts and circumstances of a particular case. The material impairment in the value and utility has to be considered as having a definite meaning and connotation as accepted from time immemorial on the principle which stood the test of time and has been accepted as legal and equitable maxim, that lessee cannot basically change the structure of the demised premises and has to return the premises he had taken on lease, to the landlord at the time of expiry of the tenancy in the same condition in which he took it on lease except the usual wear and tear resulting on account of time factor. The approach for determining whether alterations made have materially impaired the value and utility cannot be whimsical but has to be such as a reasonable man acting in a reasonable way would assume in the facts and circumstances of the case. It has to be judged according to the prevailing situation and not as one is deciding the question in cool and detached atmosphere of the Court, removed from the reality of the situation.

    11. In view of the fact that the Tenancy Act puts restraint on the right of the landlord to use the property according to his free will and provides particular grounds on which alone he can seek the ejectment and the provisions being beneficial to and for the protection of tenants have to be strictly construed. We may venture to state that the precedents cited at the Bar, clearly establish that one of the safeguards provided to the landlord while providing grounds for ejectment regarding reversion of the demised premises by the tenant in the same condition in which it was taken on rent. Thus, conditions have been put on the right of a tenant to use the demised premises and one such condition is that tenant can use his tenanted premises during the tenure of tenancy without affecting it materially in its value and utility by his acts. Reading the statutory provisions it can safely be inferred that the tenant is debarred from making any structural alteration even if it enhances its value. By necessary corrolary the tenant has been debarred from changing the character of the property substantially.

    12. We are of the considered view that what the landlord is required to show as the basis of his right to claim ejectment, once he has led evidence with respect to the material or structural alteration is that the impugned acts committed by the tenant has resulted in material impairment of the value and utility of the demised premises. In certain cases, on peculiar facts or proved it may be reasonable for the Courts to infer that the acts attributed to the tenant have resulted in the impairment in value and utility of the premises. It is the legal result which the Courts are bound to infer in the facts and circumstances of each case to determine whether in view of the facts proved in the peculiar facts and circumstances of that case, the acts attributed to the tenant have resulted in material impairment of the value or utility of the demised premises. It has to be determined in each and every case keeping in view the peculiar facts of that case in view. There cannot be any particular parameters of straight jackets tests or litmus test which can be spelled out for all facts and circumstances. The ordium of showing the material facts with regard to material impairment of the value or utility as a fact, need not be proved by an unassailable evidence or beyond doubt evidence. It will be dependent on the nature of the acts proved. Evidence may be lead to corroborate the inference the landlord asks the Court to make. The burden of proving may be light. The Courts have to examine carefully and assiduously the facts brought on record with respect to acts attributed to the tenant to infer the impairment in value and utility effected by the acts of the tenant proved on record as a fact.

    13. Learned counsel for the petitioner relied on Om Parkash of Meerut Cantt. v. Amar Singh, therein it has been observed that since alteration is of permanent nature, consequently it resulted in impairment of the value and utility of the demised premises. The proposition of law that every alteration without taking its nature into consideration would amount to impairment in value and utility cannot be stretched to its illogical end. In Sadhu Ram's case (supra) it was observed that impairment in value and utility has to be proved as a fact.

    14. For the reasons recorded above we are of the opinion that acts attributed to the tenant has to be proved by leading evidence as a material fact. The resultant effect of the act proved would be a mixed question of law and fact. Though the landlord is required to prove the fact of impairment in value and/or utility attributable to the acts committed, yet Courts would be at liberty to infer so in facts and circumstances of each case. It may draw corroboration for its inference from the evidence if any lead by the parties, though the burden of proving it is on the landlord.

    15. We are further of the view that impairment in value or utility may be of different shades in the facts and cirumstances of each case. For instance it may be either impairment in commercial or monetary point of view or utilization or utilitarian point of view.

    16. The decision in Walaiti Ram's case (supra) is on its own facts wherein solely the removal of a wall was held not to be materially impairing the value and utility of a building. It has been observed in Om Parkash of Meerut Cantt. v. Amar Singh, that the construction effected, by the tenant has materially altered the accommodation which has materially or substantially diminished the value. As the word ‘material’ stands it amounts to substantial change in character. Similar were the observations made in Sadhu Ram's case (supra) wherein construction of open space was inferred to have resulted in impairment of the value and utility of the demised premises.

    17. It would be fair on our part to refer to the judgments cited by the learned counsel for the respondents. These are Kartar Singh v. Kesar Singh . 1979 81 PLR 750.; Chatar Sain v. Bishan Lal . 1976 78 PLR 178.; Smt. Nirmala v. Ishwar Chancier . 1981 83 PLR 763.; Prabhu Lal v. Kalu Ram . 1986 1 R.C.R 49.; Brijendra Nath Bhargava v. Harsh Wardhan . 1988 1 SCC 454; Amir Chand v. Sardar Arjan Singh . 1987 2 R.C.R 518.; Sudarshan Kumar v. Tejinder Singh . 1987-2 92 PLR 44.; Harish Chand resident of Hodel v. Udai Bhan (Gurgaon) . 1984 86 PLR 533.; Sarpat Singh Jalandhar City v. Smt. Kans Rani Jalandhar, City . 1986 H.R.R 294.; Raj Kumar v. Ram Kanwar . 1987 2 R.L.R 689.; Ram Singh… v. Banarsi Dass…. . 1989-2 96 PLR 119.; Katlash Pictures v. Shri Anil C. Bhawani . 1989 1 R.C.R 448.: Sadhu Ram's case (supra); Smt. Indumati… v. Kirpal Singh Lamba…. . 1983 85 PLR 737. Walaiti Ram (Sangrur)'s case (supra) The judgments cited are on the peculiar facts and circumstances of those cases. No parameter can be culled out under which it can be assumed that the material alterations made would be taken to be impairing the value and utility of the building. In view of the above observations not much assistance can be drawn from the above listed judgments to answer the question raised in this case.

    18. We are further of the considered view that we cannot subscribe to the view laid down in Siri Ram's case (supra) that mere proving of the fact that unauthorised construction by the tenant has been made, would itself amount to impairment of the value and utility of the demised premises and would itself provide the basis for ejectment. We do approve the observations made in Sadhu Ram's case (supra) that after proving the construction raised or material alteration effected or the acts of commission or omission committed by the tenant it has to be further proved or it has to be inferable from the facts proved on record that the material alteration has materially impaired the value or utility of the demised premises Though the burden of proving the material impairment of the value or utility of the demised premises in case of structural alteration having been proved may be very light, and it may be the duty of the Court to infer so in the facts and circumstances of a given case, but it cannot be laid down as a principle of law that whenever there is a material alteration or new construction by the tenant, it would itself amount to material impairment of the value and/or utility of the demised premises. The material impairment of the value or utility of the demised premises has to be understood as a man of ordinary prudence would understand, not a sensitive landlord.

    19. In the present case in view of the finding of fact arrived at that the tenant has structurally altered the demised premises it would be reasonable to infer that such a substantial structural alreration as observed above while noticing the facts which has been found due to the acts attributed to the tenant has resulted in material impairment of the value and utility of the demised premises.

    20. Resultantly, we affirm the finding of the authorities below and find no force in the revision petition which is dismissed with no order as to costs.

    Sd/- H.S Brar, J.

    R.M.S-Petition dismissed.

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    Bhupinder Singh And Another v. J.L Kapoor And Another
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