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Smart Summary

Factual and Procedural Background

The dispute concerned premises let by the father-in-law of Smt. Nirmala to Ishwar Chand. On the landlord's death, Smt. Nirmala became landlord and filed an ejectment petition on 18 October 1972 on three grounds:

  • arrears of rent from 1 November 1971 (Rs. 15/- per mensem);
  • installation of heavy machinery causing damage to the premises; and
  • making material alterations which materially impaired the value and utility of the premises (specifically, converting an open front space into an extension of the room and removing the original front wall and door).

The tenant opposed the petition, tendered arrears and interest on the first hearing date (thus abandoning the arrears ground), pleaded that a workshop had been run from the beginning and denied that any alterations had been made after he took the premises from the previous owner.

On contest, issues were framed. The Rent Controller, after evidence, found for the landlord on the alteration and machinery issues (that heavy machinery was installed and material alterations impairing value and utility had been made) and ordered ejectment on 30 September 1975. The tenant appealed and the Appellate Authority, Kapurthala, by judgment dated 29 November 1976, reversed the Rent Controller and dismissed the ejectment petition. The landlord filed this revision petition in the High Court.

Legal Issues Presented

  1. What is the effect of not mentioning the cause of action, Court-fee and jurisdiction in this application?
  2. What is the effect of non-verification of this application?
  3. Whether the respondent has installed heavy machinery after taking on rent of the demised premises and its effect?
  4. Whether the respondent has effected material alterations in the premises and has materially impaired its utility and its effect?
  5. Whether the notice served on the respondent is not legal?
  6. Whether the applicant is estopped from filing the application by her acts and conduct?
  7. Relief.

Arguments of the Parties

Applicant / Landlord (Smt. Nirmala) — as advanced by Shri Lalit Mohan Suri

  • The third ground of ejectment (material alterations materially impairing value and utility) is fully borne out by the pleadings and the evidence.
  • The Appellate Authority erred in misreading the ejectment petition and in concluding that the application did not state an open site in front of the built shop, thereby deciding the case on wrong premises.
  • The pleadings expressly described the premises as “one room with a small door and open space in front of it” and that the tenant had extended the room to the edge of the road, converting the open space into part of the room.

Respondent / Tenant (Ishwar Chand)

  • Arrears ground was abandoned because arrears of rent with interest were tendered on the first hearing date.
  • Regarding heavy machinery, the tenant asserted the premises were taken and used as a workshop from the beginning; machinery was in use for the intended business purpose.
  • Regarding alterations, the tenant denied any material alterations since he took the premises from the previous owner and maintained the premises were in the same condition as at the commencement of tenancy.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Siri Krishan Dev v. Jhabu Ram, 1969 71 PLR 38 Establishes that a tenant cannot make alterations in a building even if those alterations increase its value, because such changes may impair the utility of the building for the landlord. The Court followed this authority to support the proposition that covering an open front and converting it to built space impairs the landlord's utility and thus warrants ejectment under section 13(2)(iii).
Banasi(Banarsi) Dass v. Sunder (Sunaer) Dass, 1969 71 PLR 59 Holds that substantial changes such as converting open sites or materially altering original construction can amount to acts likely to impair the value and utility of premises. The Court relied on this decision (including a statement by Mehar Singh C.J.) to conclude that the original building had ceased to exist as a result of the tenant's alterations and therefore ejectment was justified.
Raj Kumar v. Ram Kunwar, C.R. 1247 of 1971 (decided 17 Dec 1971) Holding that covering an open platform in front of a shop by raising side walls and putting a tin-sheet roof by the tenant amounts to an act likely to impair materially the value and utility of the premises. Applied as supporting authority that converting open frontages into covered built space is a material alteration warranting ejectment.
Nirmala Devi Kapoor v. Kartat Singh, 1972 74 PLR 2 (C.R. No. 8 of 1972; decided 5 Sept 1972) Summarizes the law under Section 13(2)(iii): vital alterations that change the nature of the building fall within the provision; minor/comfortable alterations do not. Authority must determine whether alterations are material and likely to impair value or utility. The Court cited this decision for the analytical framework: whether alterations are of a material character that change the nature of the building and thereby impair value or utility.

Court's Reasoning and Analysis

The Court undertook a fact-based and legal analysis grounded in Section 13(2)(iii) of the East Punjab Urban Rent Restriction Act, 1949. The steps of its reasoning were:

  1. Examination of pleadings and evidence: The ejectment petition explicitly described the premises as “one room with a small door and open space in front of it,” and the evidence (including that accepted by the Rent Controller) established that the tenant removed the original door, covered and built over the front open space, extended the room to the edge of the road, and fixed a new gate on the street-facing side.
  2. Assessment of the Appellate Authority's approach: The Court found that the Appellate Authority misread the petition (erroneously concluding there was no open site described) and therefore decided the matter on incorrect premises—an error that led to overturning the Rent Controller's finding.
  3. Legal interpretation of Section 13(2)(iii): The Court emphasized that the provision authorizes ejectment where a tenant has committed acts likely to materially impair either the value or the utility of the building. Crucially, “utility” must be assessed from the landlord's viewpoint: if the landlord intended the front portion to remain open, the tenant's covering of that space materially impairs the landlord's utility even if the tenant's changes increase the building's utility or value for the tenant.
  4. Reliance on precedent: The Court expressly followed prior decisions (Siri Krishan Dev; Banasi/Banarsi Dass; Raj Kumar v. Ram Kunwar; Nirmala Devi Kapoor v. Kartat Singh) which hold that alterations changing the nature of the building—such as covering an open platform—can materially impair value or utility and fall within section 13(2)(iii).
  5. Application to the present facts: Given the tenant's conversion of the open front into built space, removal of the original gate, and new construction, the Court concluded that the original building had effectively ceased to exist in its earlier form and that the tenant had materially impaired its utility for the landlord.
  6. On the machinery ground: The Court analyzed the second ground (installation of heavy machinery) and concluded that it would have been of substance only if the original building still existed and there was evidence that the machinery damaged or was likely to damage that original structure. Because the building had already been substantially altered, and there was no evidence that the present structure was being damaged by the machinery, that ground for ejectment was not proved.

Holding and Implications

Holding: Revision allowed; the order of the Appellate Authority is set aside and the ejectment order passed by the Rent Controller is restored.

Direct consequences and implementation directions spelled out by the Court:

  • The tenant is granted three months' time to vacate the premises.
  • This permission to remain is subject to the condition that all arrears of rent at the rate of Rs. 15/- per mensem are deposited with the Rent Controller along with three months' advance rent within one month from the date of the judgment.
  • If the prescribed amount is not deposited within the time allowed, the landlord is entitled to execute the ejectment order forthwith thereafter.
  • If the deposit is made as required, the amount shall be paid to the landlord, without prejudice to her rights to execute the ejectment order.
  • The parties are directed to bear their own costs.

Broader implications:

The opinion applies established precedent and an interpretation of Section 13(2)(iii) that utility is to be judged from the landlord's perspective; it does not purport to establish a new legal principle beyond that established line of cases. The decision's immediate effect is the restoration of the Rent Controller's ejectment order and the conditions for vacatur described above.

H.L.S
Petition allowed.

    Smt. Nirmala v. Ishwar Chander .

    Gokal Chand Mital, J.:— The father-in-law of Smt. Nirmala had let out the premises in dispute to Ishwar Chand as a tenant. On the death of her father-in-law, Smt. Nirmala became the landlord. She filed a petition for ejectment against the tenant on 18th October, 1972, on three grounds, namely (i) of being in arrears of rent from 1st November, 1971 onwards at the rate of Rs. 15/- per mensem; (ii) the tenant having installed heavy machinery in the premises which was causing damage to the premises and (iii) of making material alterations in the premises which were of far-reaching nature having materially impaired the value and utility of the premises let. The material alterations were specified in the petition as follows:—

    “(i) the premises consisted of one room with a small door and open place in front of it;

    (ii) the respondent has totally removed the front wall and extended the room to the edge of the road and the front side now under room has been kept open and some sort of a gate has been put there.”

    2. The petition was opposed by the tenant. The ground of ejectment on account of arrears of rent was given up as arrears of rent alongwith interest, etc., were tendered on the first date of hearing. As regards the allegation of damaging the building on account of installation of heavy machinery, it was pleaded that the respondent is running a workshop from the very beginning and the building was taken for that very purpose from the original landlord. As regards the third ground, it was stated that the premises were in the same condition as were at the time of taking on rent. It was denied that any alteration had been made since he took the premises on rent from its previous owner.

    3. On the contest of the parties, the following issues were framed:—

    1. What is the effect of not mentioning the cause of action, Court-fee and jurisdiction in this application? OPR.

    2. What is the effect of non-verification of this application? OPR.

    3. Whether the respondent has installed heavy machinery after taking on rent of the demised premises and its effect? OPA.

    Whether the respondent has effected material alterations in the premises and has materially impaired its utility and its effect? OPA.

    Whether the notice served on the respondent is not legal? OPR.

    5A. Whether the applicant is estopped from filing the application by her acts and conduct? OPP.

    6. Relief.

    4. After the parties led evidence, the Rent Controller, by judgment dated 30th September, 1975, came to the conclusion under issues Nos. 3 and 4 that the tenant had installed heavy machinery which was likely to damage the premises and that the tenant had made material alterations in the premises which impaired its value and utility. Consequently, an order of ejectment was passed against the tenant who went in appeal before the Appellate Authority, Kapurthala, who by judgment dated 29th November, 1976, upset the decision of the Rent Controller and dismissed the ejectment petition. The land lord has come up in revision in this Court.

    5. Shri Lalit Mohan Suri, appearing for the petitioner, has urged that the third ground of ejectment was fully borne out and the Appellate Authority seriously erred in law in misreading the ejectment petition and in observing in para 11 of the judgment as follows:—

    “It was nowhere stated in the application that there was an open site in front of the built shop. The description of the premises in the application indicated that the premises in dispute were only a built shop and nothing more.”

    6. A persual of the ejectment application, which has been quoted in-ex-tenso in the opening part of the judgment would show that it was specifically mentioned therein that the premises consisted of one room with a small door and open space in front of it and that the room had been extended upto the edge of the road the result of which was that even the open space was converted into a room by the tenant. Therefore, it is clear that the Appellate Authority proceeded to decide this case on wrong premises which resulted into an erroneous decision.

    7. The Rent Controller, believed the statements of AWs. 1 to 3 and 5 when they stated that the front portion of the shop was an open space which was also converted into a room and the door which was fixed in the original premises was removed therefrom and a new door was put on the newly built portion right on the street and held that impairment and utility of a building had to be examined from the point of view of the owner and not from that of the tenant and viewing the evidence from that angle, it was concluded that the rent had materially impaired the value and utility of the building. The Rent Controller had followed a decision of this Court in Siri Krishan Dev v. Jhabu Ram . 1969 71 PLR 38.. On facts the Appellate Authority also came to the following conclusion:—

    “The applicant and her witnesses had stated the original old construction had been materially improved upon so that a new gate had been constructed and some kacha wall had been made into pucca wall besides some open site being added to the built portion.”

    8. So, there is no quarrel on facts. The obvious facts are that the tenant removed the door of the shop, raised construction in the front open portion and converted the old building and the open space into one big hall and put a new gate on the front. The question which is to be determined now is whether a tenant can be permitted to tinker with the building let out to him or he is authorised only to use the premises as it is. It is true that the building was a very old one as it has come into the statement of AW 1 that Nanakshahi (small) bricks were used in the building and now the tenant, who is doing business in the premises, has made a pucca construction not only on the existing portion of the building but also on the portion which was unbuilt. One tenant may improve the value of the building while another may materially impair its value. The provision of law under which the matter has to be looked into is section 13(2)(iii) of the East Punjab Urban Rent Restriction Act, 1949, which reads as follows;—

    “13(2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf. If the Controller, after giving the tenant a reasonable opportunity of showing cause against the applicant is satisfied—

    *******

    (iii) that the tenant has committed such acts as are likely to impair materially the value or utility of the building or rented land, or

    ******

    the Controller may make an order directing the tenant to put the landlord in possession of the building or rented land and if the Controller is not so satisfied he shall make an order rejecting the application;

    ******”

    9. A reading of the aforesaid provision would show that if a tenant commits such acts as are likely to impair materially either the value or utility of the building then he would be liable to be ejected. May be that by such acts the value of the building has gone up but so far as utility is concerned, it has to be seen from the view point of the owner of the premises and not of the tenant. If the owner wanted the front portion of the premises to remain open and did not raise any construction thereon, the tenant cannot be allowed to change the nature of the premises and the moment he makes the changes the utility of the building is certainly impaired from the view-point of the landlord because there is no open space which he had left out in front of the building. This matter has been calling the attention of this Court even on earlier occasions and it was decided in Siri Krishan Dev v. Jhahu Ram (Supra) and Banasi Dass v. Sunder Dass . 1969 71 PLR 59., that a tenant cannot make any alterations in the building even if the value of the same is enhanced because that would certainly effect the utility of the building. Agreeing with the aforesaid decisions, I am of the view that the tenant had no authority to cover the front open space and convert the entire building into one hall which may be of more utility to him but certainly not to the land lord.

    10. In Civil Revision No. 1247 of 1970 Raj Kumar v. Ram Kunwar . C.R 1247 of 1971. decided on 17th December, 1971, by Gurdev Singh, J., it was held that the covering of the open platform in front of the shop by raising side walls and by putting a tin-sheet roof by the tenant amounts to an act which was likely to impair materially the value and utility of the premises. Again in Nirmala Devi Kapoor v. Kartat Singh . 1972 74 PLR 2 SN. (C.R No. 8 of 1972, decided on 5th September, 1972, by D.K Mahajan, J.) it was held as follows:—

    “Held, that a lot of literature has grown around the construction of the provisions of Section 13(2)(iii) of the East Punjab Urban Rent Restriction Act. The broad outlines which can be gathered from the reading of the case law on the subject are that if the alterations are of a vital character which change the nature of the building, the case will fall within the ambit of the said provision. But if the alterations are of a minor character, and have been made by the tenant for his comfortable living, in that case, they do not fall within the mischief of the said provision. In every case, the Authority ha; to determine what are the alterations and whether they are of a material character and are likely to impair the value or utility of the building. The shortening of the gate of the building can in certain circumstances be said to have impaired the utility of the building and may even be said to have materially affected its value. The addition of a room would in certain circumstances also affect the utility of value of the building. For instance, if the original premises are constructed for a single story, a room above the building would naturally impair its value and utility in as much as the construction of a room will make the building unsafe for hurran habitation, because the weight put on the foundations would be in excess of for which they were laid. Moreover, the tenant has to restore the premises to the landlord in the same conditions in which he took them from him, excepting of course for the normal weare and tear. If the tenant demolishes the room, in the process of demolition, it is likely that other parts of the building may be damaged. In that case, the construction of a room on the first floor would certainly impair the utility of the building. In each case, it has to be determined whether the additions and alterations have materially altered the building. One thing is clear that if the alterations change the nature of the building, the decisions are unanimous that it would impair the value as well as the utility of the building.”

    11. Therefore, it is to be seen whether the premises as let out have remained into existence as they were and that just for comfortable or proper use thereof some minor alterations have been made. On the facts of this case, the answer is ‘no’. On the other hand, what has been found is that the main gate of the building has been removed, the open space which was lying in front has been covered and a totally new construction has come into being which never existed before. In fact, the original building has ceased to exist and that by itself would be a ground to order the ejectment, as was done by Mehar Singh C.J, in Banarsi Dass v. Sunaer Dass's case (Supra). Therefore viewing the case from any angle, it is clearly borne out that the tenant has materially impaired the utility of the building so far as the landlord is concerned. Accordingly, the finding of law to the contrary recorded by the Appellate Authority is reversed and that of the Rent Controller is restored.

    12. As regards the second ground of ejectment, that the tenant has installed heavy machiney, it would have been of substance, if the original building had existed and it could be found whether by the use of the machinery the building was damaged to such an extent that its value had been materially affected or was likely to be affected and an order of ejectment could be passed. As already observed, the tenant has completely changed the building and there is no evidence on the record that the building as present stands would in any way be affected by the mechinery which is being run by the tenant. Accordingly, there is no ground of ejectment proved under the second point urged in the ejectment petition.

    13. For the reasons recorded above, this revision petition is allowed, the order of the Appellate Authority is set aside and the ejectment order passed by the Rent Controller is restored. However, the tenant is allowed three months' time to vacate the premises subject to the condition that all arrears of rent at the rate of Rs. 15-/- per mensem are deposited with the Rent Controller alongwith three months' advance rent within a period of one month from today. In case, the aforesaid amount is not deposited within the time allowed the landlord would be entitled to execute the ejectment order forthwith thereafter. In, case, the deposit is made the amount be paid to the landlord without prejudice to her rights to execute the ejectment order. The parties are left to bear their own costs.

    H.L.S
    Petition allowed.

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    Comments

    Smt. Nirmala v. Ishwar Chander .
    (Mar 2, 1981)