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Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • the 1983 Income Tax Act (not found in the text, but mentioned as a template)
  • Section 13(2)(iii) of the East Punjab Urban Rent Restriction Act, 1949
  • Section 15(5) of the East Punjab Urban Rent Restriction Act, 1949
  • Section 7, Madras Buildings (Lease and Rent Control) Act, 1946
  • Section 13(2)(iii) of the Act
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • the 1983 Income Tax Act (not found in the text, but mentioned as a template)
  • Section 13(2)(iii) of the East Punjab Urban Rent Restriction Act, 1949
  • Section 15(5) of the East Punjab Urban Rent Restriction Act, 1949
  • Section 7, Madras Buildings (Lease and Rent Control) Act, 1946
  • Section 13(2)(iii) of the Act
Smart Summary

Factual and Procedural Background

The appellant-tenant took a shop on lease from the respondent-landlord for running a dry-cleaning business at a monthly rent of Rs 30. He later installed a wooden parchhati (mezzanine/loft) resting on wooden ballis inserted into the walls, to store clothes before and after cleaning. Alleging that this alteration materially impaired the value and utility of the building, the landlord sought eviction under Section 13(2)(iii) of the East Punjab Urban Rent Restriction Act, 1949.

The Rent Controller ordered eviction, and the Appellate Authority affirmed. The tenant’s revision petition under Section 15(5) of the Act was dismissed by the High Court of Punjab & Haryana. The tenant obtained special leave to appeal to the Supreme Court, which is the opinion summarised here.

Legal Issues Presented

  1. How should the expression “acts as are likely to impair materially the value or utility of the building” in Section 13(2)(iii) of the Act be construed?
  2. On the correct construction of that provision, does the tenant’s installation of a wooden parchhati constitute such material impairment so as to justify eviction?

Arguments of the Parties

Appellant-Tenant’s Arguments

  • The parchhati is a temporary wooden fixture that can be removed without damage to the structure; therefore it neither diminishes the value nor impairs the utility of the shop.
  • The alteration was made years earlier with the landlord’s consent.
  • An expert witness (retired engineer Amrit Lal – RW 3) testified that the construction is temporary and non-structural; the landlord adduced no contrary expert evidence, despite bearing the burden of proof.
  • The findings of the Rent Controller and Appellate Authority involve a mixed question of law and fact; the High Court erred in treating them as pure findings of fact and in failing to apply the correct legal test under Section 13(2)(iii).

Respondent-Landlord’s Arguments

  • The authorities below concurrently held that the parchhati amounted to substantial structural change causing material impairment; the High Court was justified in affirming those findings, and no interference by the Supreme Court is warranted.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
R. Govindaswami Naidu v. Pushpalammal, AIR 1952 Mad 181 Not every alteration amounts to material impairment; demolition of a wall per se is insufficient. Used to illustrate that Section 13(2)(iii) requires more than a mere physical change; the alteration must be substantial.
Savitri Devi v. U.S. Bajpai, AIR 1956 Nag 60
& Charan Singh v. Ananti, (1966) 6 PLR 780
Landlord bears the burden to prove that tenant’s act is likely to impair materially the value or utility of the premises. Cited to emphasise that absence of landlord’s expert evidence weakens the eviction claim.
G. Natarajan v. P. Thandavarayan, 1969 RCJ 733 Minor modifications (e.g., drilling holes, altering parapet) do not constitute material impairment. Relied upon to analogise the wooden parchhati to minor, non-structural changes.
Anup Chand v. Tarlok Singh, (1977) 1 RCJ 752 False roofs, wooden stairs, or holes for ventilation are not material alterations changing the nature of premises. Supports the view that temporary wooden additions fall outside Section 13(2)(iii).
Gobind Ram v. Kaushalya Rani, (1983) 1 RCJ 295 A wooden parchhati with staircase does not amount to material alteration. Factually closest; used to show that the very type of construction in dispute has earlier been held non-actionable.
Om Prakash v. Amar Singh, (1987) 1 SCC 458 “Material alteration” means substantial change in character, form, or structure; question is mixed fact-law. Adopted as guiding authority for interpreting “materially impaired”; court stresses need for substantial diminution of value or utility.
Brijendra Nath Bhargava v. Harsh Wardhan, (1988) 1 SCC 454 Wooden cabins, balconies, and staircases inside showrooms are not material alterations triggering eviction. Reinforces the proposition that similar wooden structures have been held innocuous.

Court's Reasoning and Analysis

The Supreme Court first examined the statutory language of Section 13(2)(iii), emphasising that only alterations that materially – that is, substantially and significantly – diminish the value or utility of the premises justify eviction. Drawing on the cited precedents, the Court held that:

  • “Material impairment” requires more than any physical change; it must appreciably reduce either the commercial/monetary value or practical utility of the building.
  • Temporary, easily removable wooden fixtures such as the appellant’s parchhati do not meet that threshold, absent evidence of structural weakening or loss of utility.
  • The expert testimony produced by the tenant, stating that the construction was temporary and non-structural, stood unchallenged. The landlord, who bore the burden of proof, offered no expert evidence to rebut it.
  • The Rent Controller, Appellate Authority, and High Court misapplied the legal test by treating any “substantial structural change” as ipso facto material impairment, without analysing actual diminution of value or utility.
  • The High Court further erred in viewing the issue as a pure question of fact; whether an alteration is “material” under the statute is a mixed question of law and fact requiring application of correct legal principles.

Accordingly, the lower tribunals’ concurrent findings were held to be legally unsustainable.

Holding and Implications

Appeal Allowed; eviction order set aside. The Supreme Court quashed the decisions of the High Court, Appellate Authority, and Rent Controller, and dismissed the landlord’s eviction petition. No order as to costs.

Implications: The judgment clarifies that “material impairment” under Section 13(2)(iii) demands proof of substantial diminution in value or utility, not merely evidence of physical alteration. Temporary, non-structural fixtures like wooden parchhatis will not ordinarily justify eviction absent concrete evidence of damage or devaluation. While reaffirming existing precedent, the decision reinforces the tenant-protective threshold without creating new doctrine.

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    Om Pal v. Anand Swarup (Dead) By Lrs .

    S. Natarajan, J.— In this appeal by special leave by a tenant against the dismissal of his revision under Section 15(5) of the East Punjab Urban Rent Restriction Act, 1949 (hereinafter referred to as the “Act”) by the High Court, what falls for consideration is the manner of construing the words “acts as are likely to impair materially the value or utility of the building” occurring in Section 13(2)(iii) of the Act.

    2. A parchhati put up by the tenant/appellant in a shop taken on lease by him for running a dry cleaning laundry has been construed by the Rent Controller and the Appellate Authority as an act causing material impairment to the building and the High Court has affirmed their findings and dismissed the revision preferred by the appellant. The correctness of the order of the High Court in revision is challenged in this appeal.

    3. The facts are not in controversy and may briefly be stated as under. For running a dry cleaning shop the appellant had taken on lease a room from the respondent on a monthly rent of Rs 30. The appellant put up a parchhati in the shop for storing the clothes before and after dry cleaning. The parchhati has been made to rest on the walls by means of wooden ballis inserted in the wall through holes made therein.

    4. The appellant did not dispute the construction of the parchhati but contended that the alteration had been made several years ago and that too with the consent of the respondent and secondly the parchhati did not weaken or impair the utility or value of the shop in any manner. In support of his contentions, the appellant examined the neighbouring shop owners to prove that the parchhati had been in existence for long and a retired engineer by name Amrit Lal as RW 3 to speak about the parchhati being only a temporary construction and the said construction not affecting the structural soundness or the utility of the shop in any manner. Notwithstanding the appellant's contentions and the evidence of the expert, the Rent Controller and the Appellate Authority rendered findings against him and the High Court accepted those findings in the following manner:

    “However in the case on hand, it is not a minor alteration but a substantial structural change in the building. Again, the fact that the wooden balcony has been constructed with the support of nuts and bolts would also not make any difference to the position. With modern technique, the construction of even a multi-storeyed building has been made possible by the use of fabrication with steel material, including nuts and bolts. Moreover, the two authorities below have come to a concurrent finding after considering the evidence produced by the parties, that the balcony in question tantamounts to material impairment of the value and utility of the premises.”

    5. Arguing for the appellant, Mr Sultan Singh, learned counsel stated that while the Rent Controller and the Appellate Authority have rendered their findings against the appellant without there being any basis for it, the High Court has failed to comprehend Section 13(2)(iii) in its proper perspective and this has led to miscarriage of justice. It was urged that while the appellant had examined an expert RW 3 Amrit Lal to prove that the parchhati was only a temporary wooden fixture which could be easily removed at any time without any damage being caused to the walls of the building, the respondent had not adduced any contra evidence, although the burden of proof was on him to show that by fixing the parchhati the building has been materially impaired so as to affect the value or utility of the building in any manner and attracting Section 13(2)(iii) to the facts of the case. The learned counsel further contended that since the High Court has erred in treating the findings of the Rent Controller and the Appellate Authority as pure findings of fact whereas they were findings on a mixed question of law and fact, the order of the High Court in revision suffers from a serious flaw and it needs correction by this Court.

    6. In elaboration of his arguments, Mr Sultan Singh stated that the words “materially impaired” have a distinct connotation and as such any and every alteration made in a building will not necessarily constitute material impairment to the building. The counsel referred to the definition of the word “impair” in the Law Lexicon by P. Ramanatha Aiyar (Reprint Edn.) 1987 at p. 548:

    “Impair. To diminish in quality, value, excellence or strength of a thing.
    The word ‘impair’ means to make worse; to weaken; to enfeeble. To make or become worse or less; to lessen, reduce or diminish the quantity or quality.”

    The learned counsel also referred to several decisions of High Courts and of this Court where the same question has been considered by the courts. The decisions are to the following effect:

    “Every act of waste by the tenant will not entitle the landlord to obtain an order of eviction under the provisions of Section 7 [Madras Buildings (Lease and Rent Control) Act, 1946]. It cannot be laid down as a rule of law that a demolition of any wall in a building must necessarily be deemed to be an act of waste which is likely to impair materially the value or the utility of the building.R. Govindaswami Naidu v. Pushpalammal AIR 1952 Mad 181, (1951) 2 MLJ 591.
    The landlord, in order to be entitled to the grant of permission to terminate the tenancy is required not only to prove an act of waste on the part of the tenant but also to prove that the said act is likely to impair materially the value or the utility of the house. Savitri Devi v. U.S Bajpai AIR 1956 Nag 60, 1955 Nag LJ 309 and Charan Singh v. Ananti (1966) 6 PLR 780 (Punj HC).
    Drilling of a hole to let out smoke by the tenant who had taken the building for hoteliering business and removal of a portion of parapet wall for temporarily accommodating the hotel employees housed in the adjacent building cannot be said to be acts which would impair the utility of the building or its value. G. Natarajan v. P. Thandavarayan 1969 RCJ 733.
    (M)ere construction of a false roof which is only wooden or the setting of a wooden stair or making of a few holes in the roof for letting out the smoke from the hotel cannot be held to be such material alterations which may result in changing the character or nature of the premises . Anup Chand v. Tarlok Singh (1977) 1 RCJ 752.
    A wooden parchhati constructed by a tenant (tailor master) within the demised shop for the purpose of providing more accommodation to his employees and the opening up of a ventilator for that purpose and the putting up of a wooden staircase to reach the parchhati would not constitute a material alteration attracting the operation of Section 13(2)(iii) of the Act. Gobind Ram v. Kaushalya Rani (1983) 1 RCJ 295.”

    7. In Om Prakash v. Amar Singh (1987) 1 SCC 458 it was held that the raising of a temporary wall of 6 feet height in a hall in the demised premises, without digging any foundation in the floor of the hall so as to convert the hall into two portions for convenient use without the consent of the landlord and the extension of a pre-existing tin shed on the open land adjacent to the accommodation by constructing a wall made by bricks or mud and enclosing it by bamboo tatters would not amount to making of any structural change of a substantial character either in the form or structure of the accommodation and as such the construction did not materially alter the accommodation. It was observed that “the expression ‘materially altered’ means a substantial change in the character, form and the structure of the building without destroying its identity”. It was further pointed out in the decision that the findings of the court regarding constructions would be findings of fact but the question whether the constructions materially altered the accommodation is a mixed question of fact and law which should be determined on the application of the correct principles. In a recent case Brijendra Nath Bhargava v. Harsh Wardhan (1988) 1 SCC 454 the tenant had constructed a wooden structure inside the showroom making the showroom a cabin and a balcony or dochhati on the roof of the cabin with a wooden staircase inside the cabin to go to the balcony. The court held that the constructions would not constitute in law material alterations to the tenanted premises so as to give a cause of action to the landlord for filing a suit for eviction.

    8. Though these decisions construed the words ‘materially alter’ we are of the view that the reasoning adopted for construing those words would logically be attracted for construing the words “materially impaired” with which we are concerned.

    9. In the light of these decisions, if we examine the present case we find that the Rent Controller and the Appellate Authority as well as the High Court have obviously failed to construe Section 13(2)(iii) in its proper perspective and they have failed to apply the correct legal tests for judging the nature of the constructions made by the appellant. As has been repeatedly pointed out in several decisions it is not every construction or alteration that would result in material impairment to the value or the utility of the building. In order to attract Section 13(2)(iii) the construction must not only be one affecting or diminishing the value or utility of the building but such impairment must be of a material nature i.e of a substantial and significant nature. It was pointed out in Om. Prakash v. Amar Singh (1987) 1 SCC 458 that the legislature had intended that only those constructions which brought about a substantial change in the front and structure of the building that would provide a ground for the tenant's eviction and hence it had taken care to use the word “materially altered the accommodation” and as such the construction of a chabutra, almirah, opening of window or closing a verandah by temporary structure or replacing of a leaking roof or placing partition in a room or making minor alterations for the convenient use of the accommodation would not materially alter the building. It would therefore follow that when a construction is alleged to materially impair the value or utility of a building, the construction should be of such a nature as to substantially diminish the value of the building either from the commercial and monetary point of view or from the utilitarian aspect of the building.

    10. Having regard to the nature of the temporary construction put up by the appellant and the evidence of the expert witness examined by him which remain uncontroverted by any expert's evidence on the respondent's side, we find no difficulty in holding that the lower courts had rendered their findings without any basis for it and the High Court has erred in accepting those findings without applying the correct principles of law underlying Section 13(2)(iii).

    11. The learned counsel for the respondent had no effective answer for the contentions of the appellant's counsel except to say that the High Court was justified in affirming the concurrent findings rendered by the Rent Controller and the Appellate Authority and hence there is no need or justification for this Court to interfere with the order of the High Court. We are unable to countenance this argument because the High Court has failed to apply the correct principles of law while exercising its revisional powers.

    12. In the light of our conclusions, the appeal succeeds and is accordingly allowed. The order of the High Court in civil revision as well as the order of eviction passed by the Rent Controller and the Appellate Authority are set aside and the respondent's petition for eviction will stand dismissed. There will, however, be no order as to costs.

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    Comments

    Om Pal v. Anand Swarup (Dead) By Lrs .
    (Oct 4, 1988)