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citation codes
Case Number
Disposition
Advocates
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Acts
  • Section 13(1)(g) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
  • The Industrial Disputes Act, 1947
  • Article 227, Article 136 of the Constitution of India
  • rent control statute
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 13(1)(g) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
  • The Industrial Disputes Act, 1947
  • Article 227, Article 136 of the Constitution of India
  • rent control statute
Smart Summary

Factual and Procedural Background

The original landlord filed Suit No. 37 of 1986 before the Civil Judge (Junior Division), Panvel, seeking eviction of the respondent-tenant from a non-residential shop on the ground of his own bona fide and reasonable requirement. During pendency of the suit he died; his heirs (the present appellants) were substituted and, by an Order 6 Rule 17 CPC amendment, pleaded their own need. In particular, one heir asserted that a lock-out in his employer company (Metal Box Co.) had jeopardised his livelihood and that he intended to start a grocery business in the demised premises.

The trial court held that the suit abated on the landlord’s death and, on merits, found no bona fide need, emphasising the absence of proof of permanent job loss, capital, business preparations, or experience. The first appellate court agreed on bona fide requirement but reversed the finding of abatement; it nevertheless dismissed the appeal. The High Court, in Article 227 proceedings, declined interference on the ground of concurrent findings of fact. The landlords appealed to the Supreme Court under Article 136 of the Constitution.

Legal Issues Presented

  1. Whether the heirs of the deceased landlord established a “reasonable and bona fide requirement” of the premises under Section 13(1)(g) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
  2. Whether the eviction suit abated on the death of the original landlord or could validly continue in the hands of his legal representatives.
  3. Whether the concurrent findings of the courts below were so vitiated by error of law or perversity of fact as to justify Supreme Court intervention under Article 136.

Arguments of the Parties

Appellants (Landlords)

  • The lock-out in Metal Box Co. left the third legal representative without a stable income, necessitating use of the premises for a grocery business.
  • The statutory standard is “reasonable and bona fide need”, not “dire or absolute necessity”; the courts below applied a wrong legal test.
  • Proof of resignation, capital investment, or prior grocery experience is not mandated by the Act or by precedent.
  • The suit did not abate; after amendment the tenant fully contested the heirs’ requirement and suffered no prejudice.

Respondent (Tenant)

  • The heir had not permanently lost his job; the asserted requirement was therefore not genuine.
  • No documentary evidence of lock-out, available funds, or business preparations was produced; hence the plea of bona fide need failed.
  • Under Phool Rani v. Naubat Rai Ahluwalia, the cause of action was personal to the deceased landlord and the suit should be treated as abated.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Variety Emporium v. V.R.M. Mohd. Ibrahim Naina (1985) 1 SCC 251 Supreme Court may interfere with concurrent findings that are manifestly unjust. Justified re-appraisal of facts under Article 136.
Bega Begum v. Abdul Ahad Khan (1979) 1 SCC 273 “Reasonable requirement” imports need, not mere desire; courts must not impose impossible burdens on landlords. Used to criticise the lower courts’ stringent standard.
Yudhishter v. Ashok Kumar (1987) 1 SCC 204 Statutory interpretation must balance landlord and tenant rights. Reinforced a moderate construction of Section 13(1)(g).
Mattulal v. Radhe Lal (1974) 2 SCC 365 Landlord need not prove capital or business preparations. Rejected insistence on such proof by the courts below.
A.K. Veeraraghava Iyengar v. N.V. Prasad AIR 1994 SC 2357 Unrebutted bona fide need warrants eviction. Cited illustratively.
Vinay Kumar v. District Judge, Ghazipur 1995 Supp (2) SCC 586 Government service of landlord’s son does not negate bona fide requirement. Analogous support for the appellant’s position.
Rena Drego v. Lalchand Soni (1998) 3 SCC 341 Presumption of bona fide need when landlord seeks more accommodation for family. Tenant failed to rebut the presumption.
Sarla Ahuja v. United India Insurance Co. Ltd. (1998) 8 SCC 119 Court should not start with assumption against landlord’s bona fides. Lower courts’ scepticism labelled erroneous.
Prativa Devi v. T.V. Krishnan (1996) 5 SCC 353 Landlord is the best judge of his requirement. Supported appellant’s discretion in choosing a grocery business.
Meenal Eknath Kshirsagar v. Traders and Agencies (1996) 5 SCC 344 Same principle as above. Relied upon.
Sheela Chadha v. Dr. Achharaj Ram Sehgal 1990 Supp SCC 736 Landlord’s discretion in determining need. Cited approvingly.
Shiv Sarup Gupta v. Dr. Mahesh Chand Gupta (1999) 6 SCC 222 Scope of bona fide requirement clarified. Formed part of the legal framework applied.
Raj Kumar Khaitan v. Bibi Zubaida Khatun (1997) 11 SCC 411 Pleadings need not detail the precise business proposed. Answered tenant’s criticism of vague averments.
Phool Rani v. Naubat Rai Ahluwalia (1973) 1 SCC 688 Eviction suit may abate if cause of action purely personal. Invoked by tenant; distinguished and not applied.
Shantilal Thakordas v. Chimanlal Maganlal Telwala (1976) 4 SCC 417 Cause of action survives if landlord sued for self and family. Adopted to defeat plea of abatement.
Aitken v. Shaw 1933 SLT 21 “Reasonable requirement” lies between mere wish and dire necessity. Referenced in statutory interpretation.
Nevile v. Hardy (1921) 90 LJ Ch 158 Same as above. Referenced.

Court's Reasoning and Analysis

The Supreme Court found that both the trial and appellate courts misapplied Section 13(1)(g) by equating “reasonable requirement” with “dire or absolute necessity”. Relying on multiple precedents, the Court reaffirmed that:

  • A need can be genuine and reasonable without evidence of starvation, resignation from employment, or prior business preparations.
  • Insistence on proof of capital, furniture purchase, or specialised grocery experience imposed an impermissible standard.
  • Landlords cannot be expected to resign jobs or invest capital before certainty of obtaining possession, given systemic litigation delays.
  • Temporary income-generating measures pending litigation do not negate bona fide requirement.
  • The lower courts’ resort to the Industrial Disputes Act definition of “lock-out” was irrelevant and led to perverse findings.
  • As to abatement, the heirs’ amendment and the tenant’s full opportunity to contest meant no prejudice occurred; following Shantilal Thakordas, the cause of action survived.
  • These legal and factual errors created manifest injustice, warranting corrective jurisdiction under Article 136.

Holding and Implications

APPEAL ALLOWED; EVICTION ORDERED.

The Supreme Court set aside the decisions of the trial court, first appellate court, and High Court, and directed eviction of the tenant, granting six months to vacate upon filing an undertaking and paying occupation charges. The ruling clarifies that landlords need demonstrate only a reasonable and bona fide requirement—not dire necessity—thereby lowering the evidentiary threshold imposed by some lower courts. Although it re-affirms existing jurisprudence rather than establishing a new doctrine, the judgment underscores the Supreme Court’s willingness to intervene under Article 136 to correct manifest injustice.

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    Raghunath G. Panhale (Dead) By Lrs. v. Chaganlal Sundarji And Co. .

    M. Jagannadha Rao, J.— Leave granted.

    2. This is an appeal by the landlords for possession of a non-residential premises from the respondent tenant. Suit No. 37 of 1986 was filed before the Civil Judge, Junior Division, Panvel by the original landlord for his own use pleading bona fide and reasonable requirement. The respondent tenant resisted the suit contending that the plea of bona fide requirement was not acceptable. During the pendency of the case in the first court, the original plaintiff died and his heirs, the appellants were brought on record. They filed an application for amendment under Order 6 Rule 17 of the Code of Civil Procedure and the same was allowed. The third legal representative pleaded that the same premises was required for himself for starting a grocery business. He stated that he was working in Metal Box Co., that there was a lockout in that Company, that he was finding it difficult to maintain his family and wanted to improve his livelihood by starting a grocery business. On the amended pleadings, both parties led evidence. The trial court held that on the death of the original landlord, the suit abated because the original landlord's requirement was for himself and his requirement differed from that of his heirs. On merits, the trial court held that there was no proof of lockout, no proof of capital available for investment, no proof of preparations for business and that the appellant had no experience in grocery business. The lockout did not put the appellant out of his job permanently. The appellant had not resigned his job. Therefore, the requirement was not bona fide. The suit was dismissed. The lower appellate court confirmed the finding on the question of bona fide requirement but reversed the finding as to abatement stating that the plaint was amended, and thereafter parties had adduced evidence on the question of the need of the legal representatives. The appellate court gave a finding that the tenant had got three other shops. The appeal was dismissed. The landlord has come up in appeal.

    3. We have heard elaborate arguments of the learned counsel on both sides. After hearing counsel, we are of the view, for reasons given below, that this is a fit case for interference under Article 136 inasmuch as the courts were wrong in thinking that the plaintiff must prove not his need but his “dire or absolute necessity”. The above approach on the facts has appeared to us to be based on irrelevant circumstances.

    4. Now, it is well settled that this Court under Article 136 will not ordinarily interfere with the findings of fact arrived at by the courts below except in rare situations. It was held in Variety Emporium v. V.R.M Mohd. Ibrahim Naina (1985) 1 SCC 251 which arose under a rent control statute, that though this Court would not ordinarily interfere, this Court could go into the correctness of findings of fact where “the concurrent decision of two or more courts or tribunals is manifestly unjust”. This burden is no doubt to be discharged by the appellant. “But once that burden is discharged, it is not only the right but the duty of Supreme Court to remedy the injustice.” (SCC Headnote) Similarly in Bega Begum v. Abdul Ahad Khan (1979) 1 SCC 273 which also arose under the rent control law, it was again held that where the

    “High Court and the trial court have made a legally wrong approach and have committed a substantial and patent error of law in interpreting the scope and ambit of the words ‘reasonable requirement’ and ‘own possession’ in the section, and have thus misapplied the law and overlooked some of the essential features of the evidence, … the Supreme Court has to enter into the merits of the case in order to prevent grave and substantial injustice”. (SCC Headnote)

    5. We shall initially refer to the legal principles applicable to the case. Section 13(1)(g) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 uses the words “the premises are reasonably and bona fide required by the landlord” for his own occupation etc. The requirement must, therefore, be both reasonable and bona fide.

    6. The word “reasonable”, in our view, connotes that the requirement or need is not fanciful or unreasonable. It cannot be a mere desire. The word “requirement” coupled with the word reasonable means that it must be something more than a mere desire but need not certainly be a compelling or absolute or dire necessity (Aitken v. Shaw 1933 SLT 21, Nevile v. Hardy (1921) 90 LJ Ch 158). A reasonable and bona fide requirement is something in between a mere desire or wish on one hand and a compelling or dire or absolute necessity at the other end. It may be a need in praesenti or within reasonable proximity in the future. The use of the word “bona fide” is an additional requirement under Section 13(1)(g) and it means that the requirement must also be honest and not be tainted with any oblique motive.

    7. The above principles have been laid down in various decisions of this Court and we shall refer to a few of them which are relevant to the issue before us. It was stated in Bega Begum v. Abdul Ahad Khan (1979) 1 SCC 273 that the reasonable requirement postulates an element of “need” as opposed to a mere “desire or wish”. It was also pointed out that if it was indeed a case of a reasonable need, the same could not be diluted by characterising it as only a mere desire. It was stated: (SCC Headnote)

    “The distinction between desire and need should doubtless be kept in mind but not so as to make even a genuine need as nothing but a desire.”

    (emphasis supplied)

    It was also held that the language of the provision cannot be unduly stretched or strained as to make it impossible or extremely difficult for the landlord to get possession. If more limitations are imposed upon the landlord holding property, it would expose itself to the vice of unconstitutionality (Yudhishter v. Ashok Kumar (1987) 1 SCC 204). The construction of the relevant statutory provision must strike a just balance between the right of the landlord and the right of the tenant. In Bega Begum case (1979) 1 SCC 273 the landlords adduced evidence to show that they wanted to augment their present income by starting a hotel business. This was treated as a genuine need and it was held that it could not be equated with a mere desire. This Court observed that “the Act does not completely overlook the interest of the landlord”. In Mattulal v. Radhe Lal (1974) 2 SCC 365 a like principle was laid down stating that the test was not a subjective but an objective one and that the court was to judge whether the need of the landlord was reasonable and bona fide. This Court held that the Additional District Judge in that case was wrong in thinking that the landlord who wanted to start an iron and steel business, had to produce proof of preparations for starting his new business, such as making arrangements for capital investment, approaching the Iron and Steel Controller for the required permits etc. This Court held that the above circumstances were “wholly irrelevant” and observed:

    “It is difficult to imagine how the respondent could be expected to make preparations for starting the new business unless there was a reasonable prospect of his being able to obtain possession of the Lohia Bazar shop in the near future.”

    8. This Court took judicial notice of long delays in courts and observed:( & 375, para 13)

    “It is a common but unfortunate failing of our judicial system that a litigation takes an inordinately long time in reaching a final conclusion and then also it is uncertain as to how it will end and with what result”

    and that, therefore,

    “it would be too much to expect from him (landlord) that he should make preparations for starting the new business. Indeed, from a commercial and practical point of view, it would be foolish on his part to make arrangements for investment of capital, obtaining of permits and receipt of stocks of iron and steel materials when he would not know whether he would at all be able to get possession of the Lohia Bazar shop, and if so, when and after how many years”.

    9. Next comes the decision of this Court in A.K Veeraraghava Iyengar v. N.V Prasad AIR 1994 SC 2357. In that case, this Court observed that the need was bona fide and that the tenant failed to adduce any evidence against the “experience of landlord, his financial capacity and his readiness and willingness to start jewellery shop”. In Vinay Kumar v. District Judge, Ghazipur 1995 Supp (2) SCC 586 it was contended for the tenant that the son of the landlord whose requirement was pleaded, was in government service and, therefore, he could not have any bona fide need to start a private practice as a doctor. This contention was rejected. In Rena Drego v. Lalchand Soni (1998) 3 SCC 341 it was observed that in the light of the factual position in that case, “when the landlady says that she needs more accommodation for her family, there is no scope for doubting the reasonableness of the requirement”. It was held that the circumstances of the case raised a presumption that the requirement was bona fide and that “tenant has failed to show that the demand for eviction was made with any oblique motive”. It was held that in the absence of such evidence by the tenant, the presumption of the bona fide need stood unrebutted. In Sarla Ahuja v. United India Insurance Co. Ltd. (1998) 8 SCC 119 it was again observed that the court should not proceed on the assumption that the requirement of the landlord was not bona fide and that the tenant could not dictate to the landlord as to how he should adjust himself without getting possession of the tenanted premises. It was stated in Prativa Devi v. T.V Krishnan (1996) 5 SCC 353 and in Meenal Eknath Kshirsagar v. Traders and Agencies (1996) 5 SCC 344 that the landlord was the best judge of his requirement. In Sheela Chadha v. Dr Achharaj Ram Sehgal 1990 Supp SCC 736 it was held that the landlord had the discretion to determine his need. See also in this connection the judgment of this Court in Shiv Sarup Gupta v. Dr Mahesh Chand Gupta (1999) 6 SCC 222. In Raj Kumar Khaitan v. Bibi Zubaida Khatun (1997) 11 SCC 411 this Court had even stated that it was not necessary for the landlord to state in the pleadings, the nature of the business he proposed to start.

    10. In the light of the above principles, we shall now examine the decision of the courts below. In this case, Plaintiff 1/3 (one of the legal representative of the deceased plaintiff) came forward with the plea that he was in the service of Metal Box Co. and since January 1988, due to lockout, the Company was closed down and he was not having any source of income and therefore he wanted to earn his livelihood by opening a grocery shop. The trial court and the first appellate court observed that it was necessary that the plaintiff should prove that he had lost his job and was unable to maintain his family. This, according to the said courts, was belied by the fact that in the amendment application and affidavit, Plaintiff 1/3 described his occupation as “service” and that, therefore his evidence was not acceptable. It was further held that his evidence that he lost his job on 15-1-1988 must also be rejected. The envelope containing notice of the lockout from the Company and the news item in the newspaper would not, it was observed, prove the lockout. The notice showed only an intention to lockout from 5-2-1988. It was stated that no documentary evidence was produced to prove that the said plaintiff lost his job. The trial court in fact went into the definition of “lockout” in the Industrial Disputes Act, 1947 and held that by a lockout, the plaintiff would not lose his job permanently and that he would get his wages when the lockout was lifted. As the plaintiff also admitted that there was a signboard at his house, with the words “Ganesh Water Supply”, the plaintiff must be deemed to have started some other business. The plaintiff's evidence that he was maintaining himself by taking loans from friends was not proved by adducing other evidence. He had not taken steps to purchase furniture to furnish the proposed grocery shop and never thought of the capital required for the business. On this material, it was held that no case was made out that he was not able to maintain his family. Yet another reason was that during his father's lifetime, he, the plaintiff never thought of running a grocery shop. The plaintiff admitted that he did not resign his job. He thus had no intention of permanently running a grocery shop. It was not proved he had knowledge of the grocery business. These are the reasons given by the trial court and the first appellate court for rejecting the appellant's case. The High Court rejected the application under Article 227 on the ground that the concurrent findings of fact could not be interfered with.

    11. It will be seen that the trial court and the appellate court had clearly erred in law. They practically equated the test of “need or requirement” to be equivalent to “dire or absolute or compelling necessity”. According to them, if the plaintiff had not permanently lost his job on account of the lockout or if he had not resigned his job, he could not be treated as a person without any means of livelihood, as contended by him and hence not entitled to an order for possession of the shop. This test, in our view, is not the proper test. A landlord need not lose his existing job nor resign it nor reach a level of starvation to contemplate that he must get possession of his premises for establishing a business. The manner in which the courts have gone into the meaning of “lockout” in the Industrial Disputes Act, 1947 appears to us to be nothing but a perverse approach to the problem. One cannot imagine that a landlord who is in service should first resign his job and wait for the unknown and uncertain result of a long-drawn litigation. If he resigned his job, he might indeed end up in utter poverty. Joblessness is not a condition precedent for seeking to get back one's premises. For that matter assuming the landlord was in a job and had not resigned it or assuming that pending the long-drawn litigation he started some other temporary water business to sustain himself, that would not be an indication that the need for establishing a grocery shop was not a bona fide or a reasonable requirement or that it was motivated or was a mere design to evict the tenant. It is not necessary for the landlord to adduce evidence that he had money in deposit in a bank nor produce proof of funds to prove his readiness and willingness as in a suit for specific performance of an agreement of sale of immovable property. So far as experience is concerned, one would not think that a grocery business was one which required extraordinary expertise. It is, therefore, clear that the entire approach of both the courts was absolutely wrong in law and perverse on fact. Unfortunately the High Court simply dismissed the writ petition filed under Article 227 stating that the findings were one of fact. That is why we think that this is an exceptional case calling for interference under Article 136 of the Constitution of India.

    12. Learned counsel for the respondent, however, raised another point regarding abatement and relied upon Phool Rani v. Naubat Rai Ahluwalia (1973) 1 SCC 688 to contend that while the matter was in the trial court, the original plaintiff died, that the cause of action based on his bona fide requirement ceased to exist and the suit could not have been continued by his heirs. This was because the original plaintiff's requirement would not be the same as that of his heirs. It is true, the above judgment does support the above contention. On the main point, the above decision was overruled in Shantilal Thakordas v. Chimanlal Maganlal Telwala (1976) 4 SCC 417 where it was held that if the original plaintiff pleaded that it was his own need and that of the family members, the cause of action would survive on his death to his heirs. In Shantilal case (1976) 4 SCC 417 it was pointed out that if the landlord claimed possession on the ground of bona fide requirement for himself and his family members, his family members could continue the same eviction case, after the landlord's death, without amendment since the cause of action would survive to them.

    13. Now, it is true that in Phool Rani (1973) 1 SCC 688 there was no amendment application by the heirs of the deceased landlord while in the case before us, an amendment application was filed by the heirs and was allowed, putting in issue their own requirement. It is also true that in Phool Rani (1973) 1 SCC 688 no amendment application was filed and allowed, but there are still observations that the plaint cannot be amended for putting in issue the requirement of the heirs inasmuch as the cause of action will be different.

    14. Be that as it may, now the question before us is whether when relief for eviction was retained in the amendment and the plaint was amended at the instance of the heirs to put in issue their own requirement and when voluminous evidence was led on both sides and findings given on merits, we should at this distance of time hold on the basis of Phool Rani (1973) 1 SCC 688 that the amendment was wrongly allowed and drive the heirs to a fresh suit after thirteen years. The eviction case was filed in 1986 and we note that the tenant had full opportunity to meet the case of the heirs as per the amended pleading. In our view, they suffered no prejudice whatsoever because of the amendment. We, therefore, think that in our discretion, we should not drive the heirs to file a fresh suit on the plea that the amendment was wrongly allowed. We, therefore, in our discretion under Article 136, do not permit this point to be raised by the respondent.

    15. In the result, the appeal is allowed and the judgment and decision of all the three courts are set aside, and eviction is ordered. We, however, grant six months' time for vacation subject to the tenant's filing the usual undertaking within 4 weeks and continuing to pay occupation charges at the same rate during this period of six months. In case of breach of this order or the undertaking, the execution case can proceed straightaway. Appeal is allowed. There will be no order as to costs.

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    Raghunath G. Panhale (Dead) By Lrs. v. Chaganlal Sundarji And Co. .
    (Oct 13, 1999)