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H.Y. Mahmood v. Kerala Corporation, Ltd.

Madras High Court
Oct 4, 1944
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Structured Summary of the Judgment

Factual and Procedural Background

The suit was brought by a landlord seeking possession of premises originally let on 1 January 1943 for one year. The original lease provided for a monthly rent of Rs. 300 for the first three months and Rs. 320 for the remaining nine months. The plaintiff alleged that the defendants (tenants) were in arrears for October, November and December 1943 amounting to Rs. 662-6-7 and also claimed mesne profits at Rs. 320 per month from 1 January 1944 (date of termination) until delivery of possession.

The defendants raised defences: they maintained that after 1 January 1944 they continued in occupation of the ground floor on a monthly rent of Rs. 100 and that they were entitled under the Madras House Rent Control Order, 1941, to remain in occupation until 1 March 1945. Two subsidiary matters were also raised: (1) whether the landlord was liable to pay Rs. 191-7-0 collected for electric supply for the period 1 April 1942 to 31 December 1942; and (2) whether the landlord should return an advance of Rs. 1000 held by him.

The court considered documentary evidence and correspondence between the parties to determine (a) whether a fresh tenancy of the ground floor took effect from 1 January 1944; (b) whether, in absence of a fresh tenancy, the defendants as tenants holding over were entitled to protection under the Rent Control Order; and (c) the two subsidiary financial questions concerning electricity charges and the advance.

Legal Issues Presented

  1. Whether a fresh tenancy in respect of the ground floor came into existence with effect from 1 January 1944.
  2. If there was no fresh tenancy, whether the defendants could be treated as tenants holding over and thereby entitled to the benefits and protection of the Madras House Rent Control Order, 1941.
  3. Whether the plaintiff (landlord) was liable to make good the sum of Rs. 191-7-0 collected by the Electric Supply Corporation for electricity consumption during the period the premises were locked in 1942.
  4. Whether the plaintiff should return the advance of Rs. 1000 held by him and, if so, the correct refundable balance.

Arguments of the Parties

Plaintiff's Arguments (as presented in the opinion)

  • The plaintiff sought recovery of possession for the premises and claimed arrears and mesne profits for the period after termination of the original lease.
  • By counsel Mr. Venugopalachari the plaintiff argued that, as the Rent Control Order stood before its later amendments in June/July 1944, it did not apply to premises let for business purposes and therefore the tenant could not avail himself of the Order on the date the suit was filed.
  • Counsel also contended that the court could properly pass a decree for possession in this suit even if, after such a decree, the landlord might have to obtain actual eviction or possession through the Controller (i.e., the court could issue a decree despite the statutory machinery).

Defendants' Arguments (as presented in the opinion)

  • The defendants contended that they continued in possession of the ground floor after 1 January 1944 on a monthly rent of Rs. 100 and that they had validly exercised the option under Section 7-A of the Madras House Rent Control Order, 1941 to occupy the premises for 12 months from 1 March 1944, thereby denying the landlord's right to recover possession before 1 March 1945.
  • The defendants also claimed that the plaintiff was liable for the electric charges (Rs. 191-7-0), i.e., that the landlord should make good the sum collected by the Electric Supply Corporation for the period when the premises had been locked.
  • By correspondence the defendants proposed various rental figures for continuing the ground floor tenancy (e.g., Rs. 75 and later Rs. 100), and they advised the plaintiff of their intention to exercise statutory option under the Rent Control Order.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
(1877) 35 L.T. 2551 (Lush J.) Principle that the true legal position should be assessed as on the date when the order of eviction is sought (not merely the date when the suit was filed). The court relied on this authority to hold that an amendment to the Rent Control Order which came into force after the suit was filed could nonetheless govern because what matters is the position on the date when eviction is sought.

Court's Reasoning and Analysis

The court's analysis proceeded in distinct factual and legal stages:

  1. Electric charges and the advance:
    • The evidence showed the defendants had locked the premises in April 1942 and the keys were returned only in July 1942; consumption of electricity during the locked period was unusually large, explained by a faulty electrical installation and leakage (letter from Electric Supply Corporation, Ex. D-20; bill Ex. D-15).
    • The electricity bill totaled Rs. 212-9-9 with the cost of units alone Rs. 191-7-0 (excluding surcharge and meter rent). The installation had been erected and maintained by the defendants who had undertaken responsibility for its proper maintenance.
    • The court held that, because the defendants left the premises locked and the leakage arose from the defendants' installation/maintenance, the defendants were liable to bear the electric charges. The plaintiff's claim that he should bear that liability was rejected as "absurd" on the facts.
    • As to the advance of Rs. 1000 held by the plaintiff: the court found the plaintiff was bound to return it. A portion (Rs. 180-12-0) had been claimed by the landlord and the defendants' lawyer conceded that amount could be deducted from the advance (Ex. D-13). The court computed the refundable balance as Rs. 819-4-0 (and rejected the higher figure claimed in a reply).
  2. Formation (or non-formation) of fresh tenancies:
    • The premises comprised three municipal doors (Nos. 121, 121-A, 121-B) representing ground, first and top floors. In 1941 the floors had separate rents; in 1943 the defendants took all three floors jointly under a one-year lease.
    • As the 1943 lease ended, correspondence showed negotiations: defendants wished to terminate the overall tenancy but to continue the ground floor on reduced rent; the plaintiff sought Rs. 100 for the ground floor and also sought to deal directly with sub-tenants of the other floors.
    • The exchange of letters (including Ex. D-9, D-10, D-11) demonstrated that no concluded fresh tenancy for the ground floor took effect from 1 January 1944: there were offers and counter-offers but no final agreement acceptable to the plaintiff; the defendants were largely to blame for that lack of finalisation.
    • Conversely, correspondence indicated the plaintiff entered into separate tenancy agreements with the sub-tenants for the first and top floors (National Radio Co. and S.V.L. Ayyar) and those tenancies were treated as formed irrespective of any technical question concerning the plaintiff's ability to hand over actual possession.
  3. Effect of tenancy status and application of Rent Control Order:
    • At the start of 1944 the original lease had expired. The court found fresh tenancies existed for the first and top floors, but no fresh tenancy was concluded as to the ground floor, which remained in defendants' occupation.
    • Accordingly, as to the ground floor the defendants were in the position of a tenant holding over. The court observed that both local decisions and analogous English authorities support the proposition that a tenant holding over is entitled to the benefits of the Rent Control Order.
    • The defendants had given notice (by letter of 10 January 1944, Ex. D-13) that they were exercising the option under Section 7-A of the Madras House Rent Control Order, 1941, to occupy for a 12-month period from 1 March 1944 at Rs. 100 per month, and they denied the plaintiff's right to recover possession before 1 March 1945.
    • The court analysed the plaintiff's contention (through counsel) that the Rent Control Order as originally framed did not apply to premises let for business purposes and therefore could not block the landlord's suit. The court found no proof that the premises were let only for business and emphasised that the wording of the Order must be construed to cover an ex-tenant in order to achieve the Order's object.
    • On the point of timing and amendment: the court relied on the principle (citing Lush J. (1877) 35 L.T. 2551) that what governs is the legal position on the date when an order of eviction is sought, not merely the date when the suit was filed. Consequently, the court held that an amendment to Clause 7-A (and other amendments) coming into force after the suit was filed could nonetheless govern the present dispute.
  4. Jurisdictional and practical objections to a civil decree:
    • The court rejected the plaintiff's submission that it could nevertheless pass a decree for eviction in this suit and that the plaintiff could later go to the Controller to implement it.
    • Two reasons were given: (a) where a special tribunal (the Controller) is indicated for a particular relief, that tribunal has exclusive jurisdiction to grant that relief and civil court jurisdiction to that extent is ousted; and (b) even if the civil court technically had jurisdiction, it should not issue a decree that would be "brutum fulmen" (i.e., an order of no practical effect) because implementation would require referral to persons or tribunals vested with discretion (the Controller).
    • Accordingly the proper remedy for the plaintiff to obtain eviction was to approach the Controller under the Rent Control Order.

Holding and Implications

Core Ruling: SUIT DISMISSED.

Direct consequences and practical implications determined by the court:

  • The plaintiff's suit for possession and mesne profits was dismissed and the plaintiff must pursue his remedy before the Controller under the Madras House Rent Control Order rather than obtain eviction through this civil suit.
  • The court held the defendants liable for the electricity charges relating to the period when the premises were locked and electricity consumption resulted from the defendants' faulty installation (electricity bill Ex. D-15; cost of units Rs. 191-7-0; total bill Rs. 212-9-9). The plaintiff was not liable to make good these electric charges.
  • The plaintiff was ordered (implicitly through the reasoning) to return the advance of Rs. 1000 held by him, subject to permitted deductions. After deduction of Rs. 180-12-0 (conceded), the refundable balance was calculated by the court as Rs. 819-4-0 (the court rejected the higher figure claimed in reply).
  • The judgment indicates that no new legal precedent was laid down; the court applied the statutory Rent Control framework and existing principles (including the cited authority) to the facts and concluded that the special statutory mechanism (the Controller) has the appropriate jurisdiction to determine eviction under the Order.

Order made: Suit dismissed with costs.

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JUDGMENT

1. This is a simple case where the landlord seeks to recover from the tenant possession, of certain premises taken on lease on 1st January 1943 for one year on a monthly rent of Rs. 300 for the first three months and Rs. 320 for the remaining period. The plaintiff states that the defendants are in arrears of rent for the months of October, November and December 1943 amounting to Rs. 662-6-7. He also seeks to recover mesne, profits at Rs. 320 a month from the date of the termination of the tenancy, viz., 1st January 1944 up to the date of delivery of possession. The defences raised are that even after 1st January 1944 the defendants continued in possession of the ground floor of the premises on a monthly rent of Rs. 100 and that they are liable to pay rent only at this rate and further that they are entitled under the Madras Rent Control Order, 1941, to continue in occupation till 1st March 1945. Two subsidiary questions have also been raised, namely, that the plaintiff is liable to make good a sum of Rs. 191-7-0 which was collected from the defendants by the Electric Supply Corporation as charges for the supply of electric current from 1st April 1942 to 31st December 1942 and that the plaintiff should return the advance of Rs. 1000 admittedly in his hands.

2. Whether on the termination of the suit tenancy a fresh tenancy arrangement came into existence with effect from 1st January 1944 as regards the ground floor portion of the premises, is one of the questions that arises for decision in this case, and the answer depends mainly on the documents that have been filed on both sides. The other important question is wheher, even if it be held that there was no such fresh tenancy, the defendants could be treated as tenants holding over and thus entitled to the benefits of House Rent Control Order; and this is a question of law. The liability for the payment of the electric charges can be disposed of very shortly. The defendants locked the premises in April 1942 without informing the plaintiff and without giving possession to him and went away somewhere. The keya were got back from them only in July 1942, as would be seen from the letter of the plaintiff's clerk, Narasimhachari, to the plaintiff, marked Ex. P-2. We are not concerned with the exact date when the defendants returned to occupy the premises but the evidence is that it was somewhere in September or October. During the period the premises had been locked by the defendants, there was, strangely enough, a large consumption of electricity, apparently because the installation was not satisfactory and there was a heavy leakage of current. This appears from the letter of the Electric Supply Corporation, marked Ex. D-20. The electricity bill, Ex. D-15, is for a total sum of Rs. 212-9-9, the costa of the units alone coming to Rs. 191-7-0, excluding surcharge and the meter rent there was a small amount due under a previous account. It is clear from the bill that it relates to electricity consumed during the months of April and May 1942 and January 1943. It is in evidence that the electric installation was erected by the defendants and they made themselves responsible for its proper maintenance. If the defendants ran away from the premises for good or bad cause without intimating to the landlord and looking the house, it is obvious that they are liable to bear any charges for electricity that might have been consumed during the period the premises stood closed owing to the faulty construction of the installation. The claim that the plaintiff should bear this liability is on the face of it absurd. The plaintiff is bound to return to the defendants the sum of Rs. 1000 held by him as advance paid in respect of the tenancy for the year 1943. Whatever justification he had for withholding payment on the ground that the defendants should make good the loss caused to him during their tenancy by any improper user of the premises or loss of property due to negligence on the part of the tenants, there is no such excuse available now, as the claim laid by the landlord under this head in his letter, Ex. D-12 to the extent of Rs. 180-12-0 has been fully met by the concession of the defendants in the letter of their lawyer, Ex. D-13, that the amount may be deducted out of the advance and the balance refunded to them. The refundable balance will be Rs. 819-4-0 and not Rs. 826-12-0 as stated in the reply.

3. Even from the plaint, it will be seen that the premises in question bear three different municipal doors Nos. 121,121-A and 121-B Armenian Street, Madras. They represent the ground floor, the first floor and the top floor. The three floors were let to three different people in 1941 on rents of Rupees 125, Rs. 115 and Rs. 40 per mensem respectively. All the three together were taken on lease by the defendants during the year 1943 on a rent of Rs. 300 per mensem for the first three months and Rs. 320 per mensem for the remaining nine months, as stated already. The National Radio Company and one S.V.L Ayyar were the sub-tenants under the defendants of the first floor and the top floor. When the year of tenancy was drawing to a close, fresh arrangements came to be considered and as early as 22nd October, 1943, the defendants informed the plaintiff that they wished to terminate the tenancy and asked him to adjust the rents for October, November and December 1943 out of the advance of Rs. 1000 in the plaintiff's hands. They, however, expressed a wish to continue the tenancy of the ground floor provided it was let out to them on a monthly rent of Rs. 75 with one month's advance and one month's notice on either side. The plaintiff wanted a rent of Rs. 100 for the ground floor and the assistance of the defendants to enter into separate and independent tenancies with the sub-tenants as regards the first floor and the top floor. Certain other conditions were also mentioned, but with these we are not now concerned. In his letter of 10th December, 1943 the plaintiff wrote:

“As regards the tenancy of the other two floors formerly in your possession, I write this to inform you that I am arranging their tenancy terms directly. I shall let yon know in case they choose to vacate the same. Now as regards your tenancy I write this to inform you that I am agreeable to renting yon the ground floor portion on a monthly tenancy basis at a monthly rent of Rs. 100 payable in advance each month.”

4. Instead of accepting this, the defendants went back on their offer of Rs. 100 and started correspondence to the effect that they were willing to pay only Rs. 75 a month. This was met by the plaintiff with a demand for rent at Rs. 150 a month. Ultimately, the defendants realised their folly and agreed to Rs. 100 but the plaintiff would not. The consent to Rs. 100 is in Ex. D-9, dated 28th December, 1943. Ex. D-10 is a letter of the next date in which the defendants wrote to the plaintiff:

“We would also like you to enter into a fresh lease for the ground floor alone from 1st January 1943 on a rental of Rs. 100 per mensem as agreed by you to our Mr. Sankar.”

5. The plaintiff took the cheque that was sent for Rs. 297-9-5 under protest but as regards the tenancy he said, “I will go over to Madras on Tuesday when all further matters will be settled in person”: see Ex. D-11. It is clear on this correspondence that no fresh tenancy agreement was ever reached as regards the ground floor portion of the premises to take effect from 1st January 1944. There were proposals and counter proposals and, if there was no final acceptance of rent at Rs. 100 per mensem, the defendants were mostly to blame for the situation. Anyhow, it is not necessary to pursue this subject further.

6. It is reasonably clear that, as indicated by the plaintiff himself in Ex. D-4, he entered into separate tenancy agreements with the subtenants as regards the first floor and the top floor. After some higgling on both sides the offers of the National Radio Co., and S.Y.L Ayyar to pay rent at Rs. 60 per mensem and Rs. 30 per mensem were accepted by the plaintiff, as would seem from Ex. D-23 and Ex. D-41. There was no question of taking over possession from the Kerala Corporation and handing possession to the new tenants except in a technical sense, for the National Radio Co., and S.V.L Ayyar were already tenants occupying the floors they wanted to take. The ultimate refusal of the plaintiff to treat them as tenants under him because he could not get possession of the property from the Kerala Corporation as desired by him and his statement in the letters that this was a condition precedent to the fresh tenancy as regards the first floor and the top floor taking effect, appear to be afterthoughts. Even if they are to be treated as good reasons so far as he was concerned, it does not affect the legal position that the correspondence discloses the formation of contracts of tenancy with them. We are not concerned with the question whether the plaintiff was able to give them satisfactory possession or not. Even if he was not, it does not matter. It is a question as between him on the one hand and those tenants on the other.

7. The position therefore at the end of the year 1943 and the beginning of 1944 was this. The old lease had come to an end by efflux of time. There were fresh tenancies in respect of the first floor and the top floor. There was no tenancy arrangement as regards the ground floor which continued in the possession and occupation of the defendants. On these facts, it is difficult to hold that the plaintiff is entitled to an ejectment decree against the defendants in respect of the entire premises including Nos. 121-A and 121-B on the basis of, the termination of the original tenancy with 31st December 1943. Ordinarily, and if there were no other complications, the plaintiff would certainly be entitled to a decree for possession and for mesne profits as regards door No. 121 the portion remaining under the occupation of the defendants. But here comes up the Madras House Rent Control Order, 1941, for consideration.

8. By the letter of their lawyer sent on 10th January, 1944, Ex. D-13, the defendants informed the plaintiff that they were exercising the option under S. 7-A, Madras House Rent Control Order, 1941, and intended to occupy the premises in their possession for a period of 12 months from 1st March 1944 paying a monthly rental of Rs. 100 in respect of the same and they denied the plaintiff's right to recover possession before 1st March 1945. As the original lease had terminated by then, the defendant company was in the position of a tenant holding over as regards the portion in their occupation, the other portions having been let by the plaintiff under separate tenancy arrangements to the National Radio Co., and S.V.L Ayyar. It is quite clear and this has been the subject-matter of decisions both here and under the analogous English order—that a tenant holding over is entitled to the benefits of the Rent Control Order. The notice given by the defendants was a valid one, as the tenancy was a monthly one and would terminate only on 31st January 1944. See s. 7-B, Rent Control Order, where it is provided that 15 days' notice should be given before the expiry of the tenancy in the case of monthly tenancies. Even this period has been subsequently cut down to seven days under a later G.O No. 3941 dated 3rd December, 1943.

9. The contention for the plaintiff raised by Mr. Venugopalachari, his learned advocate, is that the Eent Control Order as it stood before its amendment in June and July 1944 did not apply to premises let for business purposes and that on the date he filed this suit the tenant could not avail himself of the benefits of the Order though now after the amendments it may be that the remedy to secure eviction can be sought only from the Controller under the Act. Whether the premises can be described as a house within the meaning of the Rent Control Order depends as much on the purposes for which it was let as on the use to which it was actually put. There is no proof at all in this case that the suit premises were let for business purposes only and not for occupation as residence. It is quite obvious that, apart from the definition of a “tenant” added in the Rent Control Order by an amendment in July 1944, the word as it originally stood must be taken to mean an ex-tenant just as the word “landlord” must be taken to mean an ex-landlord; otherwise the very object of the order will be frustrated and nullified. Clause 7-A, as it now stands after the July amendment provides that the landlord wishing to evict a tenant in possession shall apply to the Controller for a direction in that behalf and it is for the Controller to make up his mind after satisfying himself on certain matters whether the landlord shall be put in possession or not. This amendment though it came into force after the suit was filed, must be held to govern us because what we have to see is the true position on the date when the order of eviction is sought and not on the date when the suit was filed, as was held by Lush J. in (1877) 35 L.T 2551. But even apart from this amendment, the landlord had no right to evict once the tenant exercised his option under the unamended House Rent Control Order, s. 7-B.

10. Mr. Venugopalachari ingeniously contended that there could be no objection to a decree being passed in this suit though after the decree it might be that he might have to go before the Controller to get possession.

11. This argument fails to take note of two answers. One is that when a special tribunal is indicated for obtaining a particular relief, it is that tribunal that has got exclusive jurisdiction to grant that relief, and to that extent the jurisdiction of civil Courts is ousted. Secondly, even if it is held that the Court has jurisdiction to grant a decree for eviction it cannot be called upon to indulge in a mere pastime and pass orders which would be brutum fulmen and which cannot be carried into effect without resort being had to other persons or tribunals in whom a discretion is vested to decide if eviction is to be ordered or not. The remedy of the plaintiff is to go before the Controller. For these reasons, I think the suit fails and must be dismissed with costs. Ordered accordingly.

C.R.K/G.N

12. Suit dismissed.