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Gurdial Batra v. Raj Kumar Jain .
Factual and Procedural Background
The appellant–tenant took a shop in Jullandhar on the basis of a rent note (Ex. A-1) for the stated purpose of running a cycle and rickshaw repair business. Some years later he also sold televisions from the same premises for about seven months, after which the television sales were discontinued as they proved commercially non-viable. Alleging that this amounted to a use “for a purpose other than that for which the premises was leased,” the respondent–landlord sought eviction under Section 13(2)(ii)(b) of the East Punjab Urban Rent Restriction Act, 1949.
The Rent Controller dismissed the eviction petition, holding that the temporary sale of televisions did not constitute a change of user. On the landlord’s appeal, the Appellate Authority reversed the decision and ordered eviction. The High Court, when approached by the tenant, declined to interfere. The tenant then obtained special leave to appeal to the Supreme Court.
Legal Issues Presented
- Whether the tenant’s temporary sale of televisions, alongside his cycle and rickshaw repair business, amounted to a “change of user” within the meaning of Section 13(2)(ii)(b) of the East Punjab Urban Rent Restriction Act, 1949, thereby justifying eviction.
Arguments of the Parties
Landlord’s Arguments
- The premises were leased exclusively for running a cycle and rickshaw repair shop; selling televisions was a different commercial activity.
- Because this additional activity was commenced without the landlord’s consent, it triggered Section 13(2)(ii)(b) and entitled the landlord to eviction.
Tenant’s Arguments
- The television sales were temporary (about seven months) and conducted side-by-side with the original repair business, which continued unabated.
- The lease deed did not expressly prohibit any other business in the shop; therefore, the ancillary sale of televisions did not violate the terms of tenancy.
- Such ancillary or allied activity caused no prejudice or structural injury to the premises and, therefore, did not amount to a statutory “change of user.”
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Des Raj v. Sham Lal, AIR 1980 P&H 229 | Using a shop exclusively as a godown when let as a “shop” amounts to change of user. | Distinguished; Court stated that the facts provided limited assistance because the present case involved allied commercial activities within a shop, not conversion to an altogether different category like a godown. |
| Moti Ram v. State of M.P., (1978) 4 SCC 47 | General observations on statutory interpretation relevant to user clauses. | Cited within Des Raj; not directly applied to resolve the instant dispute. |
| Mohan Lal v. Jai Bhagwan, (1988) 2 SCC 474 | Interpreted Section 13(2)(ii)(b) of the same Act; held that allied business may not constitute change of user. | Relied upon; supported the proposition that addition of allied activity, causing no detriment, does not trigger eviction. |
| Maharaj Kishan Kesar v. Milkha Singh, Civil Appeal No. 1086 of 1964 | Sale of petrol regarded as part of a motor workshop business; no change of user. | Used illustratively to show that allied commercial activities can be permissible. |
| Duport Steels Ltd. v. Sirs, (1980) 1 All ER 529 | Parliament legislates, courts interpret; statutory meaning must fit contemporary necessities. | Quoted to justify a purposive approach in construing “change of user.” |
| U Po Naing v. Burma Oil Co., AIR 1929 PC 108 | Consideration of injury to premises underlying user restrictions. | Cited to emphasize that statutory user restrictions aim to protect the landlord from injury or prejudice. |
| Kerala High Court decision, 1977 KLT 417 | Running a wine store in premises let for trading in gold did not amount to destructive or permanently injurious use. | Referenced as analogous authority indicating flexibility when no injury to premises occurs. |
| Bombay High Court decision, 1978 Mah LJ 545 | Change in nature of merchandise (fret-work to plastic goods) did not violate Section 108(o) TPA. | Cited to reinforce that mere alteration in the type of goods sold is not necessarily a forbidden change of user. |
Court's Reasoning and Analysis
The Court began by situating Section 13(2)(ii)(b) of the East Punjab Act in the wider context of tenant obligations, drawing an explicit analogy to Section 108(o) of the Transfer of Property Act, which prohibits use “for a purpose other than that for which it was leased.” The principal objective, the Court observed, is to protect the landlord’s interest and prevent injury or prejudice to the premises.
After reviewing precedent, the Court distilled the following analytical points:
- The statutory ground for eviction should not be invoked for minor or ancillary changes that cause no detriment to the landlord’s property or its commercial potential.
- Precedents such as Mohan Lal v. Jai Bhagwan and Maharaj Kishan Kesar v. Milkha Singh demonstrate that allied or cognate commercial activities can fall within the permitted user.
- The tenant’s sale of televisions was temporary, did not involve structural alterations, and was conducted side-by-side with the original repair business, which continued unabated.
- Given these facts, the activity did not transform the essential character of the premises from a “repair shop” to a categorically different commercial establishment, nor did it prejudice the landlord.
Consequently, the alleged change did not satisfy the statutory condition for eviction under Section 13(2)(ii)(b).
Holding and Implications
Appeal Allowed; Eviction Order Set Aside. The Supreme Court vacated the eviction order passed by the Appellate Authority (as affirmed by the High Court) and restored the Rent Controller’s dismissal of the landlord’s petition. Each party was directed to bear its own costs.
Implications: The decision re-affirms that minor or temporary ancillary commercial activities, which do not injure the premises or fundamentally alter its character, will not constitute a “change of user” under Section 13(2)(ii)(b). While the judgment applies settled principles rather than creating new doctrine, it provides guidance to lower courts and tenants regarding permissible allied uses in commercial leases.
Ranganath Misra, J.— This is a tenant's appeal by special leave challenging his eviction from a business premises located at Jullandhar.
2. Under a rent note (Ex. A-1), the appellant had taken the premises on rent from the respondent landlord. The use to which the premises was intended to be put was running a cycle and rickshaw repairing shop. As far as relevant, on the allegation that the tenant had put the premises to different use, an application for his eviction was made under Section 13(2)(ii)(b) of the East Punjab Urban Rent Restriction Act, 1949.
3. The Controller found that the appellant had continued the business of repairing of cycles and rickshaws but side by side had for a period of about seven months been selling televisions in the premises but he stopped the same as it was not viable. According to the Controller, this did not constitute user for a purpose other than that for which the premises was leased and he accordingly rejected the petition. The appellate authority at the landlord's instance held that the statutory condition was satisfied and granted eviction. The High Court when moved by the tenant declined to interfere.
4. The short question that arises for consideration is whether there has been a violation of the terms of tenancy by using the premises for a purpose other than that for which the premises had been leased. The tenant did not dispute that he had taken the premises for running a repair shop of cycles and rickshaws. In his statement he said that he had commenced the business of selling the televisions side by side in view of the slump in the cycle and rickshaw repairing business. He also accepted the position that he had not obtained the consent of the landlord when he started the TV business. The landlord has accepted the position that in the rent note it was not written that the respondent would not do any business in the shop in dispute except the cycle or rickshaw repairs. On these facts it has now to be decided as to whether the premises has been used for a purpose other than that for which it had been leased.
5. Reliance was placed on the Full Bench decision of the Punjab High Court in Des Raj v. Sham Lal AIR 1980 P&H 229, (1980) 82 Punj 647, (1980) 2 Rent LR 243 where the question for consideration was as to whether when the lease was for the purpose of a shop without anything more specific, user thereof as a godown amounted to change of user. The High Court in course of the discussion in the judgment rightly drew the distinction between residential and non-residential premises and also classified non-residential buildings into known categories like shop, godown, restaurant, cinema, hotel etc. In course of the discussion the Full Bench referred to the decision of this Court in Moti Ram v. State of M.P (1978) 4 SCC 47, AIR 1978 SC 1594 and came to the conclusion that when the letting out purpose was location of a shop and it was exclusively used as a godown, it amounted to a change of user. Not much of support is directly available for the resolution of the present dispute from that judgment. Reliance was also placed on a decision of this Court in the case of Mohan Lal v. Jai Bhagwan (1988) 2 SCC 474 where the very provision of the East Punjab Act was considered in a case of eviction. The decision of this Court in the case of Maharaj Kishan Kesar v. Milkha Singh Civil Appeal No. 1086 of 1964, 1965 (SC) was referred to therein. That again was a decision under the very Act and the dispute related to the allegation of change of user when petrol was sold as an allied business of the avowed purpose of locating the workshop. The court found that location of a petrol pump could not be regarded as not being a part of motor workshop business. Rightly, our learned brother Mukharji, J. indicated that the ratio in Maharaj Kishan Kesar case Civil Appeal No. 1086 of 1964, 1965 (SC) did not provide any guideline of general nature. What was said in para 9 of his judgment is perhaps useful. Our learned brother quoted the observations of Lord Diplock, J. in Duport Steels Ltd. v. Sirs (1980) 1 All ER 529, (1980) 1 WLR 142, (1980) 1 ICR 161 and said:
While respectfully agreeing with the said observations of Lord Diplock, that the Parliament legislates to remedy and the judiciary interpet them, it has to be borne in mind that the meaning of the expression must be found in the felt necessities of the time. In the background of the purpose of rent legislation and inasmuch as in the instant case the change of the user would not cause any mischief or detriment or impairment of the shop in question and in one sense could be called an allied business in the expanding concept of departmental stores, in our opinion, in this case there was no change of user which attract the mischief of Section 13(2)(ii)(b).
On that conclusion, the order of eviction was reversed.
6. Letting of a premises can broadly be for residential or commercial purpose. The restriction which is statutorily provided in Section 13(2)(ii)(b) of the Act is obviously one to protect the interests of the landlord and is intended to restrict the use of the landlord's premises taken by the tenant under lease. It is akin to the provision contained in Section 108(o) of the Transfer of Property Act dealing with the obligations of a lessee. That clause provides:
The lessee may use the property and its products, if any, as a person of ordinary prudence would use then if they were of his own; but he must not use or permit another to use the property for a purpose other than that for which it was leased ....
A house let for residential purpose would not be available for being used as a shop even without structural alteration. The concept of injury to the premises which forms the foundation of clause (o) is the main basis for providing clause (b) in Section 13(2)(ii) of the Act as a ground for the tenant's eviction. The Privy Council in U Po Naing v. Burma Oil Co. AIR 1929 PC 108 adopted the same consideration. The Kerala High Court has held that premises let out for conducting trade in gold if also used for a wine store would not amount to an act destructive of or permanently injurious to the leased property 1977 Ker LT 417. Similarly, the Bombay High Court has held that when the lease deed provided for user of the premises for business of fret work and the lessee used the premises for business in plastic goods, change in the nature of business did not bring about change of user as contemplated in Section 108(o) of the Transfer of Property Act 1978 Mah LJ 545.
7. The landlord parts with possession of the premises by giving a lease of the property to the tenant for a consideration. Ordinarily, as long as the interest of the landlord is not prejudiced, a small change in the user would not be actionable.
8. In this case, the premises was let out for running of a repair shop. Along with the repair business, sale of televisions was temporarily carried on. We do not think this constituted a change of user within the meaning of Section 13(2)(ii)(b) of the Act so as to give a cause of action to the landlord to seek eviction of the tenant.
9. The appeal is allowed and the order of eviction passed by the appellate authority and affirmed by the High Court is vacated and the order of the Controller is restored. Parties are directed to bear their own costs throughout.
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