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  • control) act, Act 2 of 1965,
  • sub - section (3) of s. 11
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Citation Codes
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citation codes
Case Number
Attorney(S)
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  • control) act, Act 2 of 1965,
  • sub - section (3) of s. 11
Smart Summary

Factual and Procedural Background

An earlier revision was heard and disposed of on 27-10-1976. The respondent filed a review petition alleging that the earlier order was passed without hearing him because he had not received notice of the revision petition and the names shown as those of his counsel in the cause title were apparently wrong. The court was satisfied that the respondent had no notice and that interests of justice required a rehearing; accordingly the order of 27-10-1976 was set aside and the matter was to be considered afresh on merits.

Substantively, an order of eviction against the respondent had been passed by the rent controller under section 11(3) of the Kerala Buildings (Lease and Rent Control) Act, 1965. That order was reversed by the subordinate judge in appeal under section 18 of the Act. The appellate authority's decision was thereafter confirmed by the district court on revision under section 20. The present proceeding is a further revision under section 115 of the Code of Civil Procedure brought by the petitioner company challenging the legality, regularity and propriety of the district court's order.

The petition before the rent controller invoked sections 11(2), (3) and (4) of the Act. The rent control court formulated only two questions for consideration (arrears of rent and the bona fide need of the petitioner) and appears to have overlooked a contention based on damage. The rent control court found in favour of the respondent tenant on the question of arrears of rent and based the eviction solely on the petitioner company's bona fide need for its own occupation.

Legal Issues Presented

  1. Whether the bona fide need of the petitioner company to provide residential accommodation to its employees constitutes "bona fide need for its own occupation" within the meaning of section 11(3) of the Kerala Buildings (Lease and Rent Control) Act, 1965.
  2. Whether the district court, in confirming the appellate authority's judgment, properly addressed (or was obliged to answer) the question whether a company's requirement to house employees can invoke section 11(3) of the Act when a bona fide need is shown.

Arguments of the Parties

Revision Petitioner (Company) — Arguments

  • The counsel for the revision petitioner submitted that the subordinate judge's view was wrong and too narrow in its construction of "own occupation" in section 11(3) of the Act.
  • The petitioner argued that occupation by a company's employees, when the company intends to provide residential accommodation for them (for efficiency or welfare reasons or because accommodation is scarce), would constitute the company's "own occupation" and thus fall within the ambit of section 11(3).
  • The petitioner relied on the decision of the Supreme Court in B. M. Lall v. Dunlop Rubber Co. (AIR 1968 SC 175) as supportive authority for the proposition that staff occupation as licensees is occupation on behalf of the company.

Subordinate Judge / Appellate Authority / District Court — Positions Noted in Opinion

  • The learned subordinate judge held that the petitioner company could not seek eviction under section 11(3) for occupation by its staff because such occupation "would not amount to the landlord's own occupation as contemplated in s. 11(3) of the Act."
  • The appellate authority recorded a finding in favour of the respondent, treating the question as a pure question of law.
  • The district court, while confirming the appellate authority's judgment after examining the evidence, entered a finding that a case of bona fide need was not made out; the district court did not explicitly answer whether a bona fide need to provide employee accommodation would entitle the company to invoke section 11(3).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
B. M. Lall v. Dunlop Rubber Co., AIR 1968 SC 175 The observation that if an officer/staff occupies accommodation as a licensee his occupation is on behalf of the company (i.e., the company's own occupation); if he occupies as a tenant, his occupation is on his own account. The court relied on this decision to support the view that a company's provision of residential accommodation to employees — where occupation is by way of license incidental to employment — can fall within "own occupation" under section 11(3) of the Act.

Court's Reasoning and Analysis

The court identified the central legal question as whether a company's need to provide residential accommodation to its employees amounts to bona fide need for "own occupation" under section 11(3) of the Act. The court found that the subordinate judge had taken a narrow view of "own occupation" by excluding occupation by employees. The opinion reasons that a company's occupation may take various forms and that occupation by employees — typically as licensees whose right to occupy is incidental to employment and terminates with cessation of employment — would ordinarily be occupation on behalf of the company and thus constitute the company's own occupation.

The court noted supportive reasoning in the Supreme Court decision in B. M. Lall v. Dunlop Rubber Co., where the distinction between licensee-occupation (on behalf of the company) and tenant-occupation (on the individual's own account) was drawn. The appellate authority had treated the question as one of law and recorded a finding in favour of the respondent; the rent controller had found a bona fide need; the appellate authority did not disturb that factual finding. The district court, although exercising wider powers under section 20 of the Act, re-examined evidence and concluded bona fide need was not made out but did not directly address the legal question whether employee accommodation, if bona fide need existed, could invoke section 11(3).

The court held that the district court should not have reappraised the evidence so as to arrive at a conclusion different from the rent controller where the appellate authority had not disturbed the rent controller's finding. The court was of the view that the broader question whether a company may invoke section 11(3) for employee accommodation should have been answered by the district court because the appellate authority's decision rested solely on that question.

Having considered these aspects, the court concluded that the matter required fresh disposal by the rent controller in light of the observations in the court's order. The court therefore set aside the order of the rent controller, the judgment of the appellate authority and the order of the district court and remanded the matter for fresh consideration. The parties were given liberty to adduce oral and documentary evidence and to move for amendment of pleadings, which the rent controller may decide on merits.

Holding and Implications

Core Ruling: The court set aside the rent controller's order, the appellate authority's judgment and the district court's order, and remanded the matter to the rent controller for fresh disposal in accordance with law and in light of the observations contained in the order.

Implications:

  • The rent controller must re-hear and dispose of the matter, allowing the parties to produce oral and documentary evidence and to apply for amendment of pleadings if desired; such applications are to be decided on their merits by the rent controller.
  • The court's opinion indicates that a company's provision of accommodation to employees may, in appropriate circumstances, constitute "own occupation" under section 11(3) when occupation by employees is by license and incidental to employment; the court relied on existing Supreme Court reasoning for that interpretative point.
  • No costs were awarded. A copy of this order is to be appended to the court's earlier order in C.R.P. No. 2807 of 1975-H dated 27-10-1976.

    Narayanan v. Sudarsan Trading Co. Ltd.

    1. Earlier the revision was heard and disposed of on 27 - 10 - 1976; but a review petition has now been filed by the respondent stating, Inter alia, That the said order really happened to be passed without hearing him, As at that time he had not received notice of the revision petition and the names shown as those of the counsel for the respondent in the cause title were apparently wrong. I am satisfied that the petitioner had no notice of the revision petition at the time when it was heard, And that interests of justice demand a rehearing of the matter. I, Therefore, Set aside the order that was passed on 27 - 10 - 1976 and proceed to consider the matter on merit afresh.

    2. An order of eviction, Against the respondent, Passed by the rent controller under s. 11 (3) of the kerala buildings (lease and rent control) act, Act 2 of 1965, For short the act, Was reversed by the subordinate judge in appeal under s. 18 of the act; and the decision of the appellate authority has been confirmed by the district court on revision under s. 20 of the act. In this further revision under s. 115 cpc., The revision petitioner company challenges the legality, Regularity and propriety of the order passed by the district court.

    3. The petition was under s. 11 (2), (3) and (4) of the act. The rent control court, However, Appears to have overlooked the contention based on damage, As is evident from the fact that only two questions, One relating to the arrears of rent and the other relating to the bona fide need of the petitioner, Were formulated for consideration. On the question of arrears of rent the finding of the rent control court was in favour of the respondent tenant. The order of eviction was based solely on the ground of the revision petitioner's bona fide need for own occupation.

    4. The legal question that falls for decision in this revision is whether the need, If it exists, Of the revision petitioner company to provide residential accommodation to its employees would constitute bona fide need for its own occupation, Within the meaning of s 11 (3) of the act. This point does not appear to have been specifically raised in the counter or in the memorandum of c. M. Appeal. The learned subordinate judge, However, Held that the petitioner company could not seek eviction under s. 11 (3) of the act for the purpose of occupation by its staff, Since such occupation "would not amount to the landlord's own occupation as contemplated in s. 11 (3) of the act". The further question whether the company had bona fide need to provide accommodation to its staff never engaged the attention of the learned subordinate judge the counsel for the revision petitioner submitted that the view taken by the learned subordinate judge was wrong and it is without considering this aspect of the matter and in effect by - passing this question that the revisional court confirmed the judgment of the appellate authority. In my view the learned subordinate judge appears to have taken a narrow view about the scope of the expression "own occupation" appearing in sub - section (3) of s. 11 of the act. The occupation of a building owned by a company may take various forms; one of the forms of occupation would reasonably be occupation by its employees much would depend upon the object of eviction sought. A company may, As part of its efficiency drive or welfare measure, Undertake or intend to provide residential accommodation to its employees in places where it is scarce; and, If the eviction sought is for achieving this objective, It would, In my opinion, Squarely fall, Within the ambit of "own occupation" under s. 11 (3) of the act. An employee occupies such accommodation, When allotted, As a licencee, Not as a lessee; and there exists no jural relationship of landlord and tenant between the company on the one hand, And himself on the other, Inasmuch as his right to occupy the accommodation is incidental to bis employment, And would, Ordinarily, Stand automatically terminated with cessation of his employment with the company. It is needless to say that the occupation of the accommodation by the employee as a licensee would be on behalf of the company; and the company's requirement would be for its own occupation. For this view i express i find support in the decision of the supreme court reported in b. M. Lall versus dunlop rubber co. (air. 1968 sc. 175). While construing the provisions of s. 13 (1) (f) of the west bengal premises tenancy act, 1956, Bachawat, J. Has observed as follows in para. 3 of the decision at page 176.

    "the company is under an obligation to provide free residential accommodation for its officers in properties either rented or owned by it. In view of the acute scarcity of accommodation in the city, It is not possible to find other convenient flats for officers who were transferred to the city from other stations suitable provision for the accommodation of officers visiting calcutta on tour is a matter of necessity. The sole question is whether the occupation by its staff officers would be the company's own occupation. The point of dispute on which the two courts differed is whether the officer to whom the flat would be allotted would occupy it as a tenant or as a licensee. It is commoncase before us that if he is a licensee his occupation would be on behalf of the company and its requirement would be for its own occupation. On the other hand, If he is a tenant his occupation would be on his own account and the company's requirement would not be for its own occupation."
    (emphasis supplied).

    5. Though this question, Whether s. 11 (3) of the act could be invoked by the petitioner company when the allegation is that eviction is necessary for meeting its bona fide need for providing accommodation for its employees, Was not raised by the respondent in his pleadings, The appellate authority went into that question and recorded a finding in favour of the respondent, Presumably treating it as a pure question of law. The district court, While confirming the judgment of the appellate authority after having examined the evidence on record and entered a finding that a case of bona fide need was not made out, Is seen to have evaded an answer to the pertinent question whether the petitioner company could invoke s. 11 (3) of the act if bona fide need for providing residential accommodation for its employees did exist, The decision on which question really gave rise to the revision. It may be noted that the appellate authority had not reversed the finding of the rent controller that the bona fide need did exist. In fact the learned subordinate judge did not advert to this aspect at all. The power exercised by the district court under s. 20 of the act, No doubt, Is wider than that of the high court under s. 115 of the code of civil procedure. Even then, I do not think that it extends to making a reappraisal of the evidence so as to arrive at a conclusion different from what was reached by the rent controller where the appellate authority did not consider or disturb that finding. I am also of the view that the district court ought to have answered the question as to whether the bona fide need for the occupation of the employees of the landlord - company would entitle it to invoke s. 11 (3) of the act inasmuch as the appellate authority's decision rested solely on the finding on that question, And it was the legality, Regularity and propriety of that judgment that was challenged before the district court.

    having given my careful and anxious consideration to all aspects of the matter, I am convinced that the matter requires to be remanded to the rent controller for fresh disposal, And i do so setting aside the order of the rent controller,the judgment of the appellate authority, And the order of the district court. The rent controller shall dispose of the matter in accordance with law and in the light of the observations contained in this order. The parties will be at liberty to adduce evidence, Oral and documentary, If any, To substantiate their respective contentions. If the rent controller is moved by either of the parties for amendment of the pleadings, The application filed for that purpose may be considered and decided by the rent controller on its merit.

    the revision is disposed of as above. There will be no order as to costs. A copy of this order shall be appended to the order of this court on c. R. P. No. 2807 of 1975 - h dated 27 - 10 - 1976. Allowed.

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    Comments

    Narayanan v. Sudarsan Trading Co. Ltd.
    (Jul 20, 1977)