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1958 (1) TMI 38

y, this litigation would not end here but must go back to the trial court, though on a short point, for its final disposal. Complex, indeed, and varied were the questions which arose for our decision and the excellence of the arguments on either side added to their intricacies and enhanced our difficulties. We spent a considerable time over this case which had to be argued twice,-on a new point on the second occasion,-but we do not regret it as this space of time has borne fruit and it has not gone in vain and, eventually, we have been able to reach an agreed conclusion which accords with our sense of justice and view of the law. 2. The suit, out of which this appeal arises, was a suit for ejectment and mesne profits. The appellant before us was the defendant in that suit. The suit was brought by the plaintiff respondent on 23-6-1955. It was decreed by the learned Sub-ordinate Judge on 10-8-1956, and, from the said decree, the defendant filed this appeal in this Court on September 11, 1956. 3. The relevant facts lie within a short compass and they may be stated as follows: 4. Premises No. 33, Rowland Road, which is the premises in suit, belonged to the Maharaja of Burdwan. Under th .....

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5-1955, the plaintiff, through his Solicitor Sri Protap Chandra Chunder, sent a notice to quit (Ex. 4) to the defendant, asking him to vacate the suit premises and deliver vacant and peaceful possession of the same on the expiry of the said month of May, 1955. That notice was duly served on 13-5-1955 (vide Ex. 5) and, on June 23 following, the present suit was instituted. 11. In the suit, the plaintiff prayed for khas possession of the suit premises after eviction of the defendant therefrom and for recovery of mesne profits. The suit was valued at ₹ 6,400/-, namely, ₹ 5,400/- for ejectment on the basis of the rental of ₹ 450/- p. m. and ₹ 1,000/- for mesne profits tentatively. 12. The plaint alleged inter alia as follows: (i) that the plaintiff was the owner of the suit premises; (ii) that the Great Indian Motor Works Ltd. was the tenant in respect thereof at ₹ 450/- p. m.; (iii) that the said Company had gone into liquidation; (iv) that, in the said liquidation proceedings, the Company's business was sold by an order of Court and it was purchased by the defendant; (v) that the said sale and purchase was without the plaintiff's consent or concu .....

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ion (1) of the said section. Under this latter head, in addition to the usual considerations, a new consideration arose, namely, whether the proviso covered or contemplated a case of the landlord's requirement for building and rebuilding for his own occupation. 18. The relevant issues on the question of eviction were framed by the trial court in the following terms: "1. Is the notice of ejectment, dated 11-5-1955, valid and sufficient to determine the defendant's tenancy? 2. Is the tenancy, held by the defendant, for manufacturing purpose? 3. Does the plaintiff reasonably require the premises in suit for his building and rebuilding purpose for his own occupation?" and 4. Is the plaintift entitled to a decree for ejectment and for khas possession?" 19. The learned Subordinate Judge answered all the above issues in the plaintiff's favour. He also answered the 5th issue, relating to mesne profits, in the plaintiff's favour except as to the rate where he accepted the defence contention that it should be on the rental basis of ₹ 450/- per month, the period, of course, starting with 1-6-1955, which was stated in the plaint to be the elate of the cause .....

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nder the plaintiff and consider whether his tenancy has been duly determined under the law. 22. There is no dispute that the notice to quit (Ext. 4) was duly served on 13-5-1955, requiring the defendant to quit and vacate on the expiry of the month of May, 1955. Clearly, therefore, it was a good fifteen days' notice to quit and, unless the defence contention that the suit tenancy was for manufacturing purposes, requiring a six months' notice to quit for its termination, be acepted, the notice (Ext. 4) must be held to be valid and sufficient. That, indeed, is not disputed by Mr. Gupta. The pertinent question, therefore, is whether the defendant's tenancy or, for the matter of that, the tenancy of the Great Indian Motor Works Ltd., was or can be regarded as one for manufacturing purposes. 23. Before we take up the above question on its merits, it is necessary to consider two preliminary points, raised by the learned Advocate General. Relying on the decision of P. B. Mukherji, J. in Sati Prasanna Mukherjee v. Md. Fazal, , and of the English Court of Appeal in the case of Green v. Marsh, (1892) 2 QB 330, he argued that Section 106 of the Transfer of Property Act must be hel .....

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ly to the case and the requisites or essentials of a valid notice to quit to terminate the lease will have to be determined otherwise and dehors the section and, possibly, reasonable notice will be necessary and, if that be the position, the notice in the present case may not be sufficient, having regard to its particular facts and circumstances. 26. We do not think, however, that the argument of the learned Advocate General is sound. Section 107 of the Transfer of Property Act does not control Section 106 and, notwithstanding the former section, the latter will apply to a manufacturing lease, whether registered or unregistered, so as to make it a lease from year to year for purposes of that section (Section 106), terminable with a six months' notice to quit, or, in other words to control its duration and period of notice, in the absence of a contract or local law or usage to the contrary. The lease will be a lease from year to year for they limited purpose of Section 106, that is, for the limited purpose of its duration and period of notice, the duration being until the notice expires. This will not raise any conflict with Section 107. Where the lease is silent as to its durat .....

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xpired, or the original lease. Thus, if the purpose of the original lease was manufacturing, the renewal would be from year to year and the renewed lease or the tenancy by lidding over' would be one from year to year, terminable by six months' notice, expiring with the end of a year of the tenancy, in terms of Section 106. This will be so whether the original lease was registered or not as Section 116 contains no contrary indication and no other provision in this respect, and the statute certainly aid not intend to leave the period of the tenancy by 'holding over' unprovided for in any case. In Section 116, therefore, the statute itself indicates by necessary implication, that Section 106 will apply to all, leases, covered by the statute, whether under registered instruments or not, to supply the omission as to duration and period of notice. To this aspect of the matter we drew the attention of the learned Advocate General during the course of arguments but we did not get any satisfactory answer. 28. The respondent's preliminary objection under the above head is, accordingly overruled. 29. The other preliminary point of the learned Advocate General raises the qu .....

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t purpose, therefore, will have to be gathered from the oral evidence, if any, on the point, and, in the absence of such direct evidence, from the evidence of circumstances and, particularly, of user of the premises by the tenant. In that connection, the surrounding circumstances may have to be considered to accept or reject the case of one party or the other and the landlord's interest in the premises at the time of creation of the tenancy or, at any other material time, when any special arrangement may be alleged to have been made between the parties, may also well be relevant. 33. The defendant has examined himself and he has asserted that the suit tenancy was for manufacturing purposes. He was a major shareholder of the Great Indian Motor Works Ltd. and he claims to have some knowledge of the original arrangement of this Company's tenancy. One Mayo has appears to have been the lessee of the suit premises at the time under the owner Burdwan Raj and the Company took its tenancy, or, rather, its sub-tenancy, from this Mayohas. The defendant (D. W. 1) has purported to speak about the purpose, for which the tenancy was taken by the Company. It was, according to him, for deve .....

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e up the above question, it is necessary to consider two points in bar, raised by Mr. Gupta, on this part of the case. Mr. Gupta argued that the learned Subordinate Judge should not have allowed the plaintiff to rely upon the above proviso or provisos as no case thereunder was specifically pleaded in the plaint or raised in the issues, framed by the court, and, in this connection, he drew our attention to the decision of the House of Lords in the well-known case of North Western Salt Company Ltd. v. Electrolytic Alkali Co. Ltd., (1914) AC 461. We do not think, however, that this complaint of Mr. Gupta is justified in the facts of this case. It is the defendant himself who raised the question under the provisos in his written statement (vide Paragraph 10) and the point was argued before the court below without any objection on his part and no grievance was also made by him, in the memorandum of appeal, filed in this Court, about the absence of a specific issue on the point. In these circumstances, we do not think that the defendant can complain of any prejudice. He had ample notice of the point, hs produced his materials thereon and argued the matter fully in the court below without .....

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xpress any opinion on the above matter but we are perfectly clear in our mind that mere recognition for purposes of ejectment, that is, only for serving the notice to quit and bringing the suit for ejectment, would not put the transferee outside the proviso and give him immunity against the landlord's claim for eviction thereunder. In the above view, we overrule Mr. Gupta's contention. 37. We take up now the real question under the two provisos (a) and (b) of Section 12(1), namely, whether the transfer in the present case, under which the defendant came on the suit premises, is a transfer within the meaning of proviso (a) so as to make the defendant a transferee under proviso (b). There is now no dispute as to the facts and the only question is what, on those facts, would be the correct position in law. 38. Admittedly, the Company went into liquidation. The learned Subordinate Judge was of the opinion that it was a voluntary liquidation and, in that view, he found no difficulty in holding that the transfer in the liquidation proceedings was really a transfer by the tenant,-to wit, a voluntary transfer,-within the meaning of proviso (a) and, necessarily, therefore, the defen .....

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to put it in clearer language, within their legislative intent, and that, on a proper construction of the said provisos, the disputed transfer should be held to be outside their mischief. 41. The authorities, cited by the learned Advocate General, may perhaps be distinguished but, even under them, and under the standard form, shown by the learned Advocate General (vide Eiphinstories President's, (sic) 14th Edn, Vol. 1 p. 500, Foot note (i)), the disputed transfer would, at the worst, be technically, or, in form, a transfer by the Company, the liquidators acting on its behalf or representing it in the transaction. When, however, the substance of the matter is considered, it is clear that the transfer is by the Court or by operation of law. 42. In a compulsory winding up, the Company is put into liquidation against its will by force of law and the order of the Court and the sale is made by the liquidator, acting under the control of the Court and with its sanction. That is the dictate of law. The sale, therefore, is really by the Court, acting through the liquidator and the Company has no hand in the matter. It is thus a sale against the Company's will or a sale in invitum. T .....

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him, viz., proviso (h). 44. Now, proviso (h) permits ejectment "where the premises are reasonably required by the landlord either for purposes of building or rebuilding; or for his own occupation .. ... . ." 45. To this proviso (h) is appended an Explanation which runs as follows : "The Court in determining the reasonableness of requirement for purposes of building or rebuilding shall have regard to the comparative public benefit or disadvantage by extending or diminishing accommodation and in determining the reasonableness of requirement of occupation shall have regard to the comparative advantage or disadvantage of the landlord ........ and of the tenant" and then appears a proviso (which will be referred to hereafter, wherever necessary, as the disputed proviso) in these terms : "Provided that where the Court thinks that the reasonable requirement of such occupation may be substantially satisfied by evicting] the tenant from a part only of the premises and allowing the tenant to continue occupation of the rest and the tenant agrees to such occupation the Court shall pass a decree accordingly and fix a proportionately fair rent for the portion in occupat .....

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ar as it relates to requirement for building and re-building and the finding of the learned Subordinate Judge, whereby it was held to have been satisfied by the plaintiff, and Mr. Gupta's submissions against that finding do not fail to be considered by us. 50. As we have said above, the plaintiff's case is that he requires, the disputed premises for, building and/ or re-building for his own occupation or, in other words, that he requiies it for his own occupation and, for that purpose, he will build and/ or re-build it. Mr. Gupta first contended that such a requirement of the landlord would not come within the relevant phrase ("for his own occupation") of the proviso. He argued that the proviso contemplated two classes of requirement, one for build ing and re-building and trie other for the landlord's own occupation and the two classes of requirement were mutually exclusive. They could not be amalgamated and a composite or amalgam requirement, necessitating building and re-building for making the premises fit for the landlord's own occupation, would not be relevant for purposes of the proviso. Where the requirement is for build ing and re-building, that mu .....

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ew as occupation of the premises for purposes of building and/or rebuilding in order to make it fit for one's own occupation would be part of such occupation. We, accordingly, overrule this extreme argument of Mr. Gupta. 51. On the above question Mr. Gupta cited the decision of the Privy Council in the New Zealand case of Mckenna v. Porter Motors Ltd., (1956) AC 688 and sought to deduce support from it to his extreme submission as set out above. He did not dispute that prima facie that decision would appear to be against his contention but he submitted that, on a careful and closer reading and on the distinction, pointed out by him, it would prove to be the contrary. For this purpose, he drew our particular attention to the concluding observations of the Board at page 696 of the report where their Lordships purported to re-inforce their construction of the disputed provisions (Section 24(1) clauses (paragraphs) (h) and (m),-and incidentally also Clause (g),) of the New Zealand statute before them by reference to Section 30 and he contended that Section 15 of our statute which corresponds to the said Section 30 shows a different intention and points to a different conclusion and .....

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d any additional or added ground or support for the suggested construction, would not certainly have negatived or contradicted it. At the worst, it would have required the landlord to occupy the premises for demolition or re-construction as part of and for making it fit for his own occupation, where he recovered possession on that ground, within the period of two months, specified for the purpose. We do not think, therefore, that the purpose for which Mr. Gupta cited the Privy Council case can succeed and the decision is really against his attempted construction of the statute. 53. What we have stated above will be further clear if we examine briefly the facts of the New Zealand case and the manner in which the Privy Council approached and decided it. To that task we shall at once proceed. 54. The action was one in ejectment, brought by the landlords (Porter Motors Ltd.) against the tenants (Mathew James Mekenna and another). The premises comprised land with, a hotel on it. The plaintiffs claimed ejectment for their own occupation, namely, to use it for a garage after demolition and reconstruction of the existing building (hotel). The relevant statute (the New Zealand Tenancy Act o .....

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of Appeal (Gresson, Hay and Turner JJ.) which, in a material part of its judgment, held that 'premises', at least in the case of urban property for purposes of Clause (h), comprised the demised land and such buildings as are from time to time situate thereon as distinguished from the (original) subject-matter of the lease. That was also the view of the trial Judge (Cooke, J.). 60. The defendants appealed to the Privy Council and contended that the word "premises' had been wrongly construed by the courts below and that, but for that wrong construction, ejectment would not have been decreed, 61. The Privy Council accepted the first part of the above contention but rejected the second and it maintained the decree for ejectment upon the view that 'own occupation' in Clause (paragraph) (h)-and in Clause (g) too-included occupation for purpose of demolition and/or reconstruction for making the premises fit for the landlord's occupation and that Clause (Paragraph) (m) would not apply where demolition and/or reconstruction would be part of such occupation as aforesaid but that the said Clause (Clause (m)) was limited to cases, where the premises were required .....

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r Lordships then reinforced their above construction by reference to Section 30 in the following terms: "This construction is supported by Section 30 which provided inter alia that a landlord who within two years relets or resells premises of which he has obtained possession under paragraph (g) or (h) shall be guilty of an offence. If the appellants argument is right one might have expected the demolition and reconstruction of a building within two years on premises of which possession had been so obtained also to have been made an offence." 65. We have already shown that Section 15 of our Act which corresponds to the above Section 30 introduces no change in the situation and, accordingly, the case cited by Mr. Gupta, namely (1956) AC 688, far from supporting his contention, really goes against it and the distinction, sought to be made by him by referring to Section 15 of our Act, does not, as we have already pointed out, strictly arise or aid his submission. 66. The next question is whether the plaintifi has made out his case of reasonable requirement of the suit premises for his own occupation. This, indeed, is a difficult question in the tacts of this case. The plainti .....

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nsurance Society Ltd. for a loan on mortgage of his Wellington Street premises to enable him to purchase the disputed property for purposes of his residence. He purchased the disputed property including the superior lessor's (owner's) interest by mortgaging his Wellington Street house. He knew that the property was tenanted but he was assured by the Hindusthan's Board of Directors that the tenant would vacate. Failing to get possession for 3 or 4 months he approached the defendant who saw him and promised to vacate as soon as possible. In September thereafter he received the letter (Ex. 2) and- as suggested therein, he went to inspect the disputed premises for making arrangement for starting the construction work. He purchased the disputed premises for the purpose of his residence, As it is, the disputed premises is not fit for his habitation and he proposed to build a house there and, for that purpose, he got a plan sanctioned by the Corporation and collected the necessary funds by selling his Shiliong house. He chose the disputed premises for his residence as it was in a quiet locality and not in front of an open street like the busy and noisy Wellington Street." .....

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ve further proviso as a proviso-the 2nd proviso-to proviso (h)) is that when the Court takes the view that the plaintiff is entitled to a decree for ejectment on the ground of reasonable requirement for his own occupation in the light inter alia of the Explanation but thinks that partial eviction will be sufficient for the purpose, it will take the said further proviso (which we shall hereafter call, whenever necessary, the disputed proviso) into consideration and examine its applicability and effect in accordance with law. In the present case, it is unnecessary to consider which of the above three views is preferable as, in view of our conclusion on the question of comparative advantage and disadvantage and in view of the fact that, in our opinion, the disputed proviso should be considered in this case, all the above three views will lead to the same result. We, therefore, proceed first to consider the question of comparative advantage and disadvantage. 71. We have set cut in brief the plaintiff's evidence in support of bis case. In cross-examination, the plaintiff has stated that be never looked for any other suitable plot or any other rented house for a quieter living and th .....

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or rejecting the plaintiffs sworn testimony. In the above connection, must be remembered also the plaintiff's other allegation that the locality was very noisy and disturbing which fact, in the context of his deposition, may also well be a strain on his tired nerves at his age after his day's strenuous work and constitute sufficient disturbance to his usual night's rest and sleep. 72. From what we have stated above, it is fairly clear that, subject to the test of comparative advantage and disadvantage which we shall presently consider, the plaintiff has made out a case of reasonable requirement of the disputed premises for his own occupation. Reasonable requirement is a relative term. What is reasonable requirement for A may not be so for B and, again, what may not be reasonable requirement for A may well be reasonable requirement for B. The status of the plaintiff, the nature of his work or avocation, the state of his health etc.-all mav be relevant considerations for judging his requirement and the reasonableness of it. As Chief Minister the plaintiff is certainly not entitled to any privileged treatment in law and it is fair to observe that he does not claim any. He .....

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t greater disadvantage to him than what the plaintiff will suffer from non-obtaining possession of the disputed premises. This appears from his own evidence (vide the concluding part of his cross-examination) which suggests that he will not have much difficulty in removing without much loss if he gets sufficient time for the purpose. This is also confirmed by the trend of his letter (Ext. 2) which, though it is otherwise irrelevant for purposes of the Rent Control Act, would be available to the plaintiff to show that the defendant would not experience much difficulty in removing his business from the suit premises. We are also not convinced on the evidence before us that the defendant made any adequate serious attempt to find out alternative accommodation. The evidence of the defendant (D. W. 1) and of his son (D. W. 3) rather gives a contrary impression and, on the materials before us, we feel that, given sufficient time, the defendant will be able to find out suitable alternative accommodation for this part of his business which is located at the disputed premises. 75. In my dealing with these cases under the Rent Control Act and, in particular, with this question of comparative .....

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of the parties, and I have never allowed any technical consideration to defeat its salutary object. I do not, therefore, agree with the learned Advocate General that, as the defendant did not take any plea under this proviso in the written statement or before the trial Court, he should not be allowed to urge it in this Court. The proviso appears to have been overlooked in the trial court and the question of partial eviction was not raised or considered there. The plaintiff was seeking total eviction of the defendant from the suit premises and the defendant was fighting out that case. The plaint alleged the plaintiff's reasonable requirement of the suit premises but it did not contain any particulars of such requirement nor mentioned any facts from which the extent of such requirement could be gathered or inferred. In such circumstances, it would be unreasonable to expect the defendant to contend in the written statement that partial eviction would be sufficient to meet the plaintiff's reasonable requirement. It was only in evidence that the extent of the plaintiffs requirement was somewhat indicated and, at the earliest, therefore, it was at that stage or during arguments t .....

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onable requirement, it would pass a decree accordingly, allowing the defendant, if he so agrees, to continue in occupation of the rest, provided, of course, the proviso otherwise applies. 78. In the above view, we would entertain this plea of the defendant at this appellate stage and that in spite of the fact that it was not urged at the original hearing of the appeal. The point was taken in the memorandum of appeal but it appears to have been lost sight of at the time of hearing in the heat of discussion. While considering our judgment and, in particular, the question of the plaintiff's reasonable requirement, it appeared to us prima facie that this was pre-eminently a case where the disputed proviso may have application to bring about a happy blending of law, justice and equity. On the materials before us, an area of about a bigha appeared to be prima facie sufficient to satisfy substantially the plaintiffs reasonable requirement of occupation. Even the plaintiffs own plan, Ext. 3, of his two proposed buildings in the disputed premises, assuming they are both necessary for satisfying his reasonable requirement for his own occupation under proviso (h), would not require any la .....

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extent necessary for satisfying the plaintiffs reasonable requirement, we were reluctant to shut out the defendant from urging this plea on the technical ground of delay or default at earlier stages. 80. Sitting in this Court for administering justice, I have never refused to listen to a point, relevant to the case, merely because it was not mooted earlier unless the other party happened to be prejudiced thereby beyond recompense. The instant case does not, in my opinion, come within that exception. Where, moreover, the statute casts a duty on the Court to consider a particular aspect of the matter, the question of delay or default on the part of a party may not be strictly relevant. It is, therefore, necessary to consider whether the disputed proviso would apply to the present case and, if it does, what will be its effect. 81. At the further hearing of the appeal, Mr. Gupta produced a plan of the disputed premises, on which was shown the portion which the defendant offered to release to the plaintiff, retaining the rest for his (the defendant's) purposes. That plan we are marking 'X' for identification but, as we intimated to Mr. Gupta during the course of arguments, .....

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of the structures etc.-may be necessary to determine the applicability of that proviso and the manner of its application, if eventually it be found applicable to the case. It would be unfair, in our opinion, and unsafe too, to decide the question of the above proviso without the fuller and further materials, spoken of hereinbefore, if the same be available. 83. We would, accordingly, remit this case to the Court below for consideration of the question of the disputed proviso-its applicability and effect in the facts of this case-and fianl disposal of the suit (including the plaintiffs claim for mesne profits) in accordance with its finding on that question. That will be the only point to be considered at the rehearing and it will be decided on the materials, now on record, and such further materials as either party may choose to adduce-and for adducing which the parties are given the necessary leave-to enable the Court to come to a just and proper decision and, in the light of that decision, the suit will be disposed of finally by the court below in accordance with law and in terms of this judgment and, if, eventually, the plaintiffs claim for ejectment be decreed in full, the Cou .....

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