TMI Blog1990 (4) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... the party of the second part from party of the First part on 3.12.1935 ..... and the party of the Second part for his convenience and at his own expenses and costs (was) permitted to construct in the said vacant land and install petrol selling business .......... After the expiry of lease period of 15 years i.e. on 12.2. 1950 the lessee shall at his own expense remove the structure put up by him and deliver possession of the vacant land together with well and kaichalai in the present state .... SCHEDULE .... vacant land situated in this bounded on the North by vacant land leased out for Burmah Oil Co. by the said Ramaswamy Gounder Gopalji Ratnaswami ..... all these vacant lands together with in the fourth plot measuring East to west 84 and North to South 16 together with half share in well therein together with tiled Kaichalai ... together with door, doorways etc. There is no number for Kaichalai. It is common ground that the total vacant area covered by the lease was 3600 sq. ft. and that the kaichalai, referred to therein, was thirty seven and a half by sixteen and a half feet i.e. of the extent of about 600 sq. ft. It also appears that even though there was initially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... denial of title within the meaning of Ss. 14(1)(b) and 10(2)(vii) of the Tamil Nadu Buildings (Lease and Rent Control) Act. In the meantime, the provisions of the Madras City Tenants' Protection Act, 1922 (Later renamed the Tamil Nadu City Tenants' Protection Act) were extended to the municipal limits of Udumalpettai within which the premises in question were located. Taking advantage of this, the respondent filed O.P. 1/79 (in the same court of District Munsif-cum-Rent Controller) claiming the benefit of compulsory purchase conferred on tenants of land under the said Act. The District Munsif-cum-Rent Controller allowed the lessor's petition for eviction and dismissed the lessee's petition. The sub-judge, on appeal, dismissed the appeals with a slight modification. He was of the view that, except for the kai-chalai, the other buildings had been put up by the respondents with the permission of the lessor and that, hence, he was entitled to obtain compensation therefore by institution of separate appropriate proceedings. The respondent filed two revision petitions before the High Court which declined to interfere. The learned Judge held: I do not see any re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rage tank, a petrol pump and other structures and carried on a petrol and kerosene business thereon. Though the small Kaichalai was situate in a corner of the site, the lease intended by the parties was only that of the site. The Kaichalai was no doubt not demolished and, perhaps, the appellant also made use of it for the purposes of his business but, says Sri Vaidyanathan, this made no difference to the obvious and clear and dominant intention of both parties that it was the site that was leased out for a petrol pump business. Sri Vaidyanathan contended that the issue is directly governed by the decision in the Larsen Toubro case [1988] 4 SCC 260, to which one of us was a party. He submitted that, where a lease is a composite one of land and buildings, the court has to address itself to the primary or dominant intention of the parties. If this is to lease a building--the lease of land being adjunct or incidental--as in the Larsen Toubro, case (supra), the Rent Control Act would apply. On the other hand, if the dominant intention is to lease a site--the presence of a building thereon not being considered material by either party--the lease would not be one of a 'building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (however small, insignificant or useless it may be) is sufficient per se to bring the lease within the scope of the Rent Control Act. It is suggested for the respondent that it would be inarguable, once it is admitted or held that the Kaichalai is a building and that the same has been let out, that still there is no letting out of a building within the meaning of the Act. In support of his contention, Sri Parasaran, for the respondent, placed considerable reliance on Irani v. Chidarnbaram Chettiar, AIR 1953 Mad. 650. He pointed out that, in that case there was a vast vacant land with only some stalls in one corner and a compound wall but it was nevertheless held to be a case of lease of a building. According to him, this case was not disapproved, but indeed indirectly approved, by this Court in Salay Md. Sait v.J.M.S. Charity, [1969] 1 MLJ SC 16 though certain other cases (where leases of vacant sites with only the lessees' buildings thereon were held to be leases of buildings) were overruled in that decision. This case, according to him, decides that, once there is a building on the land, however insignificant, and it is let out, the case will be governed by the Rent Control A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re also let out. They were clearly cases in which, we think, the applicability of the Rent Act was rightly ruled out. On the other hand, Larsen Toubro, [1988] 4 SCC 260 is a case where there was the lease of a building although a vast extent of land was also included in the lease. That was not a case which arose under the Rent Control Act but it illustrates the converse situation. Sri Vaidyanathan wants to derive, from the case referred to above and certain cases which deal with other aspects which become relevant while considering a composite letting, a proposition that the dominant purpose of the letting should govern. For instance, there are cases where factories, mills or cinema theatres are leased out and cases have held that the dominant object is to lease a factory, mill or theatre and that, even though in all these cases, the letting out of a building would be involved, the provisions of the Rent Control Act would not apply vide Venkayya v. Subba Rao, AIR 1957 A.P. 619; Uttam Chand v. Lalwani. AIR 1965 SC 716 and Dwarka Prasad v. Dwarkadas, [1976] 1 SCR 277. But we think that this approach also seeks to over simplify the problem. When we come down to consider the terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs inseparable from the letting of the said machinery, plant or furniture, he shall be entitled to allowances in accordance with the provisions of the clauses (iv), (v) and (vii) of sub-section (2) of section 10 in respect of such buildings. The High Court took the view that the plant and machinery and buildings should not only be inseparably let out but also that the primary letting must be of the machinery, plant or furniture and that together with such letting or along with such letting there (should be) letting of buildings. 1n that case, the High Court held, the primary letting was of the building and so S. 12(4) would not apply. The Supreme Court did not approve of this reasoning. It said: Now the difficulty that we feel in accepting the view which appealed to the High Court and the Tribunal is that we find nothing in the language of sub-s. (4) of S. 12 to support it. No doubt the sub-section first mentions the letting of the machinery, plant or furniture and then refers to the letting of the building and further uses the word 'also' in connection with the letting of the building. We, however, think that this is too slender a foundation for the conclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecomes a new kind of income, not covered by s. 9, that is, income not from the ownership of the building alone but an income which though arising from a building would not have arisen if the plant, machinery and furniture had not also been let along with it. Though the context was somewhat different, the observations in that case are of great assistance. We think that, in the context here also, we should be guided not by any theory of dominant purpose but by the consideration as to whether the parties intended that that the building and land should go together or whether the lessor could have intended to let out the land without the building. The latter inference can perhaps be generally drawn in certain cases where only the lease of land dominated the thoughts of the parties but the mere fact that the building is small or that the land is vast or that the lessee had in mind a particular purpose cannot be conclusive. Let us now turn, in the above background, to a consideration of the lease deed in the present case. As already mentioned, counsel for the appellant strongly relies on the purpose of the lease and seeks to make out that the building (kaichalai) was not really a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petrol pump; so far as the building was concerned, the lessee was at liberty to use it as he liked but he had to maintain it in good condition and return it at the end of the lease. This was a composite lease with a composite purpose. It is difficult to break up the integrity of the lease as one of land alone or of building alone. In these circumstances, we think this letting would come in within the scope of the Rent Control Act, for the reasons already explained. Before concluding, we may touch upon two more relevant aspects. The first is the use of the word separately in s. 2(2). This, however, does not affect our above construction of the section. That word is intended to emphasise that, for purposes of the Act, a building means any unit comprising the whole or part of a building that is separately let out. It does not mean--it cannot mean--that composite leases of land and building would not be covered by it. That would be clearly contrary to the language of the whole clause which specifically talks of joint letting of land and building. The second is the restriction of the applicability of s. 2(2) to cases of letting of building and appurtenant lands only. It may be sug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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