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Palakkad Dist. Co-Operative Printing Press Ltd. v. Mohammed Kaleem

Kerala High Court
Jan 23, 1996
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Case Summary — Ramakrishnan, J.

Factual and Procedural Background

The revision petitioners are the Palakkad District Co-operative Printing Press Limited (the Society) and its President. They challenged concurrent eviction orders for a building occupied by the Society as a tenant, the eviction being sought by the respondents on the ground of bona fide need. The petitioners originally challenged the finding on bona fide need in their memorandum of revision, but at hearing they confined their contention to the legal question whether a co-operative society-tenant is entitled to the protection in the second proviso to Section 11(3) of the Kerala Buildings (Lease & Rent Control) Act, 1965. The Rent Control Court and the District Judge had both held that the tenant (being a co-operative society) could not claim that proviso; those courts gave no reasons in support of that view. The present revision proceeding (C.R.P.) was disposed by the court with directions described below.

Legal Issues Presented

  1. Whether a co-operative society (a legal entity) which is a tenant as defined in the Act can avail the protection granted by the second proviso to Section 11(3) of the Kerala Buildings (Lease & Rent Control) Act, 1965.
  2. Whether the phrase "his livelihood" in the second proviso to Section 11(3) must be read as referring only to natural persons (or persons who are natural persons, e.g., partners of a firm) and excludes legal entities such as co-operative societies and companies.

Arguments of the Parties

Revision Petitioners' Arguments

  • The Society contended that, as a tenant within the meaning of the Act and insofar as it satisfies the two mandatory conditions in the second proviso to Section 11(3) (dependence for livelihood mainly on income from business carried on in the building, and absence of other suitable premises in the locality), it must be given the protection of that proviso.
  • Counsel for the petitioners relied on a Division Bench decision reported as 1986 KLT 1250 (Haji P. Mammu v. Abdurahiman Basha) to support the contention that entities associated with persons carrying on trade/business from the premises can claim the proviso's protection.

The opinion does not contain a detailed account of the respondents' separate legal arguments challenging the petitioners' position; the record shows only that the Rent Control Court and the District Judge found that a co-operative society could not claim the protection of the proviso and gave no reasons for that view.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
1986 KLT 1250 (Haji P. Mammu v. Abdurahiman Basha) Distinction that a firm is not a legal entity: a firm name is compendious of its partners; consequently a firm (being effectively a collective of natural persons) can claim the proviso's protection. The court held that this decision supports the view that collective arrangements of natural persons (such as a firm) are distinguishable from legal entities; therefore Haji P. Mammu does not assist the petitioners' contention that a co-operative society (a legal entity) is entitled to the proviso.
Madras Bangalore Transport Company (West) v. Inder Singh ((1986) 3 SCC 62 : AIR 1986 SC 1564) Statement that "a firm unless expressly provided for the purpose of any statute ... is not a legal entity. The firm name is only a compendious way of describing the partners of the firm." The court relied on this Supreme Court observation (as cited in Haji P. Mammu) to support its interpretation that the proviso's reference to "his livelihood" contemplates natural persons rather than juristic entities.

Court's Reasoning and Analysis

The court analyzed the textual scope of the word "tenant" in Section 2(6) of the Act and the context-specific application envisaged by the opening words of Section 2 ("unless the context otherwise requires"). Although the statutory definition of "tenant" can include both natural and legal persons (because it means any person by whom or on whose account rent is payable), the court held that the context of the second proviso to Section 11(3) narrows that meaning.

The second proviso requires that the tenant "is depending for his livelihood mainly on the income derived from any trade or business carried on in such building" and that no other suitable building is available in the locality. The court focused on the pronoun "his" in "his livelihood," reasoning that the natural language and grammar indicate reference to a natural person. The court concluded that "his livelihood" cannot naturally refer to an inanimate legal entity such as a co-operative society or a company and that, if the legislature had intended to include legal persons, it would have used wording such as "his or its livelihood."

The court considered the Division Bench decision in Haji P. Mammu and the Supreme Court's observation in Madras Bangalore Transport Co. v. Inder Singh. It interpreted those authorities to distinguish firms (which are treated as compendious expressions for their partners — i.e., collections of natural persons) from incorporated or statutory bodies that are distinct legal entities. On that basis the court concluded that the second proviso applies to natural persons (or groups of natural persons) and not to legal entities like co-operative societies or companies.

Having rejected the petitioners' legal contention that the Society was entitled to the second proviso's protection, the court nonetheless considered and granted a limited equitable relief on the petitioners' request for time to vacate. The court balanced the procedural outcome by granting three months to surrender possession subject to conditions: the petitioners must file, within three weeks, an affidavit unconditionally undertaking to surrender the building within three months; and during those three months they must pay rent without default. Failure to file the affidavit would permit the landlord to take possession immediately.

Holding and Implications

Holding: The court held that the second proviso to Section 11(3) of the Kerala Buildings (Lease & Rent Control) Act, 1965 applies only where the tenant is a natural person or persons (for example, partners of a firm) and does not extend to tenants which are legal personalities or entities such as incorporated companies or statutory/co-operative societies. Consequently, the co-operative society in this case was not entitled to the protection of that proviso.

Immediate Consequences: The revision petition was disposed of with directions that the petitioners be given three months from the date of the order to vacate and surrender the building unconditionally to the landlord, subject to the following conditions:

  • The petitioners must file, within three weeks, an affidavit unconditionally undertaking to surrender the building and premises within three months from the date of the order;
  • The petitioners must continue to pay the rent for the three-month period without default;
  • If the petitioners fail to file the affidavit within three weeks, it will be open to the landlord to take possession forthwith.

The opinion does not state that it establishes a novel binding precedent beyond the interpretive conclusion reached; it applies established distinctions (as drawn from cited authorities) between natural persons/partnerships and corporate or statutory legal entities in interpreting the proviso.

This summary is based exclusively on the provided opinion text and contains no information beyond that source.

Show all summary ...

Ramakrishnan, J.:— Revision petitioners, the Palakkad District Co-operative Printing Press Limited (for short ‘the Society’) and its President, are challenging the concurrent orders of eviction of the building occupied by the society as a tenant under the respondents on the ground of bona fide need.

2. Though in the memorandum of revision, the correctness of the finding regarding bona fide need was also challenged, at the time of arguments learned counsel for the revision petitioners Shi V. Chitambaresh, according to us very fairly, has not pressed any such contentions and has raised only one point for our consideration. The learned counsel has thus canvassed the correctness of the view taken by the Rent Control Court and the learned District Judge that the tenant in this case being a Co-operative Society is disentitled to avail the protection granted under the second proviso to Sec. 11(3) of the Kerala Buildings (Lease and Rent Control) Act, 1965 to the tenants in general. It was forcefully submitted that so long as the Society is a tenant as defined in the Act and satisfies the two mandatory conditions stipulated in the second proviso to Sec. 11(3) of the Act, the Society cannot be denied the benefit of the said proviso which is a very valuable protection conferred on the tenants in general by the Kerala Buildings (Lease and Rent Control) Act, a beneficial legislation mainly intended to protect the tenants from unreasonable eviction by the landlords. The learned counsel has sought support for the above contention from a Division Bench decision of this Court reported in 1986 KLT 1250 (Haji P. Mammu v. Abdurahiman Basha).

3. The second proviso to Sec. 11(3) of the Act is thus:

“Provided further that the Rent Control Court shall not give any direction to a tenant to put the landlord in possession, if such tenant is depending for his livelihood mainly on the income derived from any trade or business carried on in such building and there is no other suitable building available in the local ity for such person to carry on such trade or business.”

4. For availing the protection granted as per the above proviso, the tenant is bound to establish that he is depending for his livelihood mainly on the income derived from any trade or business carried on in the building let out to him and that there is no other suitable building available in the locality for him to carry on such trade or business. In this case, both the Rent Control Court as well as the learned District Judge has taken the view that the tenant of the building being a co-operative Society, it cannot claim the protection conferred under the above proviso. Both the authorities have not given any reasons it support of the view taken by them. In fact, both the authorities have proceeded on the basis that it is a point on which there cannot be any controversy at all. The learned District Judge has in fact noted that the tenants have no such contention even.

5. The definition of the word ‘tenant’ contained in Sec. 2(6) of the Kerala Buildings (Lease & Rent Control) Act, 1965 would certainly take in both natural and legal persons within its fold as the word ‘tenant’ has been defined to mean any person by whom or on whose account rent is payable for a building. However, it is important to note thatthewords defined in Sec. 2 of the Act may have a wider or restricted meaning as the context requires. That is clear from the opening words of Sec. 2 of the Act which contains the usual clause “unless the context otherwise requires”. The wording of the proviso would clearly indicate that only if a tenant proves that he is depending for his livelihood mainly on the income derived from any trade or business carried on in the building occupied by him as a tenant, the tenant can take advantage of the protection granted under. The second proviso to Sec. 11(3) of the Act. The words ‘his livelihood’ can naturally have only reference to a natural person and not to an inanimate lifeless legal entity like a co-operative society or a company incorporated under the Companies Act. The word ‘his’ would place the matter beyond any doubt. It can only be a pronoun for a natural person. If legal persons or entitles like companies or societies registered under the Societies Registration Act and statutory bodies were also comprehended as beneficiaries of the second proviso, the legislation would have certainly used the words ‘his or its livelihood’ even accepting that there can be livelihood for legal persons or entities. The principles laid down in the decision in Haji P. Mamma v. Abdurahiman Basha (1986 KLT 1250) relied on by the learned consel in support of his contention would not lend any assistance to the counsel in support of his contention. On the other hand, the said decision would really support the view which we have taken in the matter. What was decided in the said decision was that if a firm is a tenant of a building, such firm will be entitled to get the benefit of the second proviso to Sec. 11(3) of the Act, since firm is only a compendious name for its partners and it is distinguishable from legal persons or entities like companies and statutory bodies. It is relevant to note that the Division Bench in the above decision has referred to and relied upon specifically the observations of the Supreme Court in Madras Bangalore Transport Company (West) v. Inder Singh ((1986) 3 SCC 62 : AIR 1986 SC 1564) to the following effect:

“A firm unless expressly provided for the purpose of any statute which is not the case here is not a legal entity. The firm name is only a compendious way of describing the partners of the firm”.

6. As such, we are inclined to hold that the second proviso to S. 11(3) of the Act will have application only in cases where the tenant of a building is a natural person or persons and not when the tenant is a legal personality or entity as in the case of incorporated companies or statutory bodies. The fact that a co-operative society may also be a tenant as defined in the Act may not be a sufficient reason to hold that the protection conferred by the second proviso to S. 11(3) of the Act is available to the society also. The context in which the word ‘tenant’ is used in the second proviso would unfailingly indicate that the said word has been used therein as taking in only natural persons or group of persons in contrast to legal personality or legal entities like Companies and statutory bodies. In this view, we find no merit in the above contention.

7. Having failed to substantiate the above point, the learned counsel requested thatsince the tenant is a co-operative society carrying on a printihgpress in the building, it may be granted a reasonable period of at least six months to vacate and surrender possession of the building to the landlord.

8. Having considered the request of the learned counsel for the petitioners, in the facts and circumstances of the case, we are of the view that it is only just and proper to grant a period of three months from today to the petitioners to vacate andsurrender the building to the landlord unconditionally. We would accordingly allow the petitioners three months' time for surrendering the building to the landlord on condition that the petitioners file an affidavit unconditionally undertaking to surrender the building and premises to the landlord within three months from today. The said affidavit shall be filed within three weeks from today. The petitioners shall also continue to pay the rent payable for the said three months without any default If the petitioners fail to file the affidavit, it will be open to the landlord to take delivery or possession of the building forthwith.

9. C.R.P is disposed of with the above directions.