Partly allowed

Abdul Kader v. George Joseph

Kerala HC10 Dec 2008RCRev./270/2004

Case brief

AI extract

What is this about?

This revision petition challenged an appellate order evicting a hotel tenant on grounds of arrears of rent, other buildings, and material alterations. The High Court of Kerala held that pre-dissolution partnership arrears do not constitute 'arrears of rent' under the Kerala Buildings (Lease & Rent Control) Act. It ruled that the landlord had no special reasons to evict despite having vacant rooms. Finally, it found that hotel facility improvements did not materially reduce the building's value, setting aside the eviction order under Section 11(4)(ii).

What did the court decide?

Eviction order under Section 11(2)(b) and Section 11(4)(ii) set aside; revision under RCRev.No.270/2004 allowed; revision under RCRev.No.385/2004 dismissed; petition for eviction stands dismissed.

Abdul Kader Vs George Joseph — Civil Procedure and Limitation | Kerala HC (2008)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT :

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THE HONOURABLE MR. JUSTICE P.R. RAMAN

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THE HONOURABLE MR. JUSTICE T.R. RAMACHANDRAN NAIR

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WEDNESDAY, THE 10TH DECEMBER 2008 / 19TH AGRAHAYANA 1930

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RCRev..No. 270 of 2004()

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-----------------------RCA.17/2003 of ADDL. DISTRICT COURT, PARAVUR RCP.6/2001 of MUNSIFF COURT,ALUVA

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(S): REVISION PETITIONER/APPELLANT/FIRST RESPONDENT.

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ABDUL KADER, S/O.KOCHUNNI, MADATHIL KARUVELIPPARAMBIL, PANAYIKULAM KARA, ALANGAD TALUK.

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BY ADV. SRI.M.A.ABDUL HAKHIM

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RESPONDENT(S): RESPONDENTS/PETITIONERS.

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GEORGE JOSEPH, S/O.GEORGE, MAVELI HOUSE, CHIRAKKAKAM KARA, VARAPPUZHA VILLAGE.

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SADIK, S/O.KAREEM, CHETTIPARAMBIL, R/A. PEECHINGAPARAMBIL, VETTKUNNAM KARA, THRIKKAKARA NORTH VILLAGE.

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ADV. SRI.MATHEW JOHN (K) FOR R1

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SRI.AJEESH K.SASI FOR R1

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THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 27/11/2008, ALONG WITH RCR NO. 385 OF 2004 THE COURT ON 10.12.2008 THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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ORDER IN IA 2323/04 IN RCR 270/2004

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DISMISSED.

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10.12.2008

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SD/- P.R. RAMAN, JUDGE.

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SD/- T.R.RAMACHANDRAN NAIR, JUDGE.

// TRUE COPY //

P.S. TO JUDGE

P.R.Raman &

T.R. Ramachandran Nair, JJ.

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- - - - - - - - - - - - - - - - - - - - - - - - R.C.R. Nos.270 & 385 of 2004

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- - - - -- - - - - - - - - - - - - - - - - - - - -

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Dated this the 10th day of December, 2008.

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O R D E R

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Ramachandran Nair, J.

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The premises in question was rented out to the tenant as per lease deed dated 23.9.1969. The tenant is conducting a hotel there. It was owned by a partnership firm named as M/s. M.C. Vareed and Company. The present landlord was one of the erstwhile partners. The monthly rent claimed is at the rate of Rs.225/-. The partnership was dissolved on 16.10.1999 and the schedule building was set apart to the present landlord. The eviction petition was filed raising various grounds under Sections 11 (2)(b), 11(3), 11(4)(i) and 11(4)(ii) of the Kerala Buildings (Lease & Rent Control) Act, 1965 (hereinafter referred to as 'the Act'). The trial court granted eviction under Section 11(4)(ii) of the Act and rejected the other grounds. Both sides appealed against the said order passed by the Rent Control Court.

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The Appellate Authority by a common judgment, partly allowed the appeal filed by the landlord in regard to the ground pleaded under Section 11(2)(b) and thus ordered eviction on the ground of arrears of rent.

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The order passed by the Rent Control Court rejecting the ground under Section 11(3) and 11(4)(i) was confirmed. As regards the ground under Section 11(4)(ii), accepting the plea of the landlord, the matter stands remanded to the Rent Control Court for fresh consideration. Both sides have come up in revision challenging the above judgment of the Appellate Authority.

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We have heard Shri Mathew John, learned counsel appearing for the landlord and Shri M.A. Abdul Hakhim who appeared for the tenant.

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The necessary facts for the disposal of the revision petitions show the following: According to the landlord, on dissolution of the partnership, he has become the absolute owner of the tenanted premises. An amount of Rs.5,275/- remained as arrears of rent for the period 23.9.1969 to March 1987. From April 1987 onwards no amount has been paid towards rent. The premises have been subleased to the second respondent in the Rent Control Petition who is conducting a hotel in the name and style of 'Sagar Hotel'. The bonafide need pleaded is for own occupation by the landlord to conduct business in sanitary items as he has no other avocation in life. It is alleged that the tenant has effected certain alterations which have reduced the value and utility of the building. Two steps leading to the front room

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stands demolished, a new wash basin with bricks was constructed by him in one room, a new latrine was constructed in the corner of one of the rooms, another water tank was constructed and a new pipe connection was taken to it. For driving out water from the said water tank a drainage has also been laid. These are the grounds under under Section 11(4)(ii) of the Act.

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In his objections, the tenant mainly contended that the right, if any of the landlord is only upon dissolution of the partnership on 16.10.1999 and he cannot maintain a petition for eviction for any alleged arrears of rent prior to the said period during which the partnership was owning the building. The original rent was only Rs.200/- and it was agreed that certain constructions mentioned in the lease deed had to be undertaken by the landlord and on completion of the same, the rent will be increased to Rs.225/- and when the father of the present landlord was informed about it, he refused to receive rent from him. The arrears of rent from 16.10.1999 till date of petition was deposited along with the objection. The own occupation for bonafide need of the landlord was disputed by the tenant in his objections. It is stated that the landlord and his wife are doing various businesses in Aluva and Varappuzha. Apart from that, three rooms numbered as 195, 197 and 198 in Ward No.VIII are remaining vacant in the

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possession of the landlord and the tenant of one of the rooms was evicted through court by filing R.C.P.No.9/2000. This is an up stair room of the petition schedule building and there is a stair leading to the said room and this is sufficient for doing his proposed business. The allegation that he had effected material alterations was also denied and according to him, the lease deed permits seven items of works for improving the facilities of the building. The Municipality, by a notice, instructed him to do certain works which alone have been attended. He had made this construction as enjoined by the terms of the lease deed and as directed in the notice of the Municipality. The allegation that the value and utility of the building have been reduced by the said alteration, is denied by him. It was also pointed out in para 14 of the objection that the bathroom was already existing which was only repaired by him and the latrine was also there. The allegation of sub-lease was also denied by him.

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The evidence consists of the oral evidence of P.W.1 and R.Ws.1 and 2 and documentary evidence by way of Exts.A1 to A13 and Exts.B1 to B6. As already noticed, the Rent Control Court found in favour of the tenant on the ground pleaded under Sections 11(2)(b), 11(3) and 11(4)(i) of the Act. It was found that the partnership was dissolved only on 16.10.1999

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and relying upon the dictum laid down by this court in Suhara v. Abdul Shukkur (1996 (2) KLT 836) it was held that the landlord is entitled to get arrears of rent only subsequent to the execution of partition deed. As the landlord was only a partner prior to 16.10.1999, he had no exclusive right to collect rent during that period.

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While examining the ground pleaded under Section 11(3) of the Act, the Rent Control Court found that the landlord is having in his possession building Nos.6/570 and 6/574 and as no special reasons have been proved by the landlord, he is not entitled to get eviction under Section 11(3) of the Act.

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Regarding the ground under Section 11(4)(ii) of the Act, viz. material alteration made by the tenant, the Rent Control Court, relying upon clause 4 of the lease deed, found that constructions have been effected by the tenant without any permission from the landlord. It was found that even if there is failure on the part of the landlord to carry out improvements as described in clause 13 of Ext.A1 lease deed, the tenant will not get any right to do the same without the consent of the landlord. Relying upon Exts.A4 and A5 which are the reports of the Commissioner in O.S.NO.335/2000 filed by the landlord against the tenant, it was found that

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the improvements effected are material alterations. Ultimately, it was found that as the tenant has effected material alterations without the consent of the landlord, it has to be held that the tenant uses the building in such a manner as to destroy and reduce its value and utility materially and permanently. Therefore, eviction was ordered under Section 11(4)(ii) of the Act. The plea of sub-lease was rejected for lack of any evidence on that aspect.

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Before the Appellate Authority, the contention raised by the tenant that Exts.A4 and A5 cannot be relied upon without examining the Commissioner, was accepted by the Appellate Authority. On the request made by the landlord that the matter may be remanded to adduce fresh evidence on that aspect, the Appellate Authority vacated the order passed by the Rent Control Court and remanded the matter for fresh consideration.

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The Appellate Authority was of the view that the landlord is entitled to succeed on the plea under Section 11(2)(b). It was held that the landlord being one of the co-owners of the building, is entitled to get an order of eviction on the ground of arrears of rent.

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The Appellate Authority also confirmed the finding that the landlord is having other buildings in his possession and Ext.B1 certified copy of the relevant pages of the assessment register maintained by the

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municipality was relied upon. It was held that the tenant is entitled to get the protection under the first proviso to Section 11(3) of the Act. The Appellate Authority confirmed the finding under Section 11(4) (i) of the Act also. These orders are under challenge in the revision petitions filed by the tenant as well as the landlord.

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Elaborate arguments were raised by the learned counsel appearing on either side in regard to the ground pleaded under Sections 11 (2)(b), 11(3) and 11(4)(ii) of the Act. Learned counsel for the landlord submitted that as far as the plea under Section 11(4)(ii) is concerned, he is not placing reliance upon Exts.A4 and A5 reports of the Commissioner in the civil suit and therefore the matter need not be remanded back to the Rent Control Court and that the same can be considered in the revision petitions by this court. Accordingly, arguments were raised by either side on the sustainability of the ground under Section 11(4)(ii) of the Act. The finding rendered by the Rent Control Court and the Appellate Authority rejecting the plea of the landlord for eviction under Section 11(3) was also attacked by learned counsel appearing for the landlord.

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First we will consider the ground pleaded under Section 11(3) of the Act. Herein, the plea raised by the landlord is that he wants to start a

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business in sanitary items, as he is not having any avocation in life. In reply, the tenant contended that he has got various businesses like 'Jayasree Hardwares' and 'Cement and Asbestos Shop' very near to the petition schedule building. Apart from that, it is contended that the landlord is having vacant possession of rooms numbered as VIII/195, 197 and 198 of Ward No.XVIII. One of the rooms, viz. room No.198 was evicted through court in R.C.P.No.9/2000. Apart from these rooms, he is having another room, viz. room No.VI/501 and he purchased room Nos.XVIII/429 and XVIII/430 which are godown rooms. It is stated that these facts have been suppressed in the eviction petition. When the landlord was examined as P.W.1, in his proof affidavit it is stated that room No.VIII/195 is not vacant, room No.VIII/197 is not owned by him and room No.VIII/198 is in the upper floor and there is only a stair having a width of 3 ½ ft. leading to the said room. After his cross examination, he was again examined, and he produced Exts.A9 and A9(a) certified copy of the profession tax demand register to show that building No.VIII/195 (new number VI/567) is in the possession of one Muraleedharan as a tenant.

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We will now advert to the view taken by the authorities below. Both the authorities below concurrently found against the landlord stating

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that he is having in his possession vacant rooms and going by the first proviso to Section 11(3) of the Act, in the absence of any special reasons, eviction cannot be ordered. The tenant had produced Ext.B1 copy of building tax assessment register for the period 1999-2000 to 2003-04 of the Aluva Municipality relating to door Nos.VI/567 to VI/580 and going by the same, three vacant rooms pointed out by the tenant are in occupation of the landlord. This was the clinching evidence against the plea raised by the landlord. Learned counsel for the landlord submitted that Ext.A9 will show that building No.VI/567 is in occupation of one Muraleedharan and therefore the findings rendered by the authorities below are vitiated. Ext.A9 is the register showing payment of profession tax for the year 2001-02. This was not accepted by the authorities below in view of the fact that the same is not conclusive in the absence of production of the lease deed in respect of the said room and the non-examination of the alleged tenant. Learned counsel for the petitioner pointed out that the eviction petition itself is dated 11.4.2001. The proof affidavit of the landlord is dated 11.12.2002 and he was further examined on 17.12.2002 and at that point of time only the said document was marked. Further, it is pointed out that the date of remittance of the profession tax is noted as 13.12.2002 and therefore merely on the

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basis of Ext.A9, it cannot be conclusively found that the building was occupied by Shri Muraleedharan as a tenant on the date of filing of the eviction petition. We see much force in the submission made by the learned counsel for the tenant that Ext.A9 cannot be relied upon in the light of the above facts as well as due to the non-examination of the alleged tenant and the non production of the lease deed in respect of the said tenancy. Apart from that, Ext.B1 shows that the same is for the period 1999-2000 to 2003-2004 and room Nos.567, 570 and 574 are remaining vacant. In the light of the said document, the contention raised by the landlord was rightly rejected by the court below. Room No.198 was obtained by the landlord by filing R.C.P.No.9/2000. It is in the first floor of the building wherein the petition schedule room is situated. Admittedly, in the pleadings nothing has been mentioned by way of special reasons as to why any of these rooms could not be used by the landlord. Even in the deposition the landlord only says that it cannot be used and no cogent and convincing reasons have been stated as to why it cannot be used for the business proposed to be done by the landlord. Even though learned counsel for the landlord states that the stair to that room is only 3 ½ ft. width, we are unable to accept the same as a special reason because of the fact that it was

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already outstanding with a tenant who was evicted by filing

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R.C.P.No.9/2000. As to why the stair cannot be used or as to its inconvenience, if any, there is no reliable evidence and no Commission was taken out. He has no plea that it cannot be repaired before using the same. Thus, the faint plea raised by the landlord that it cannot be used, was not accepted by the authorities below. In the light of the clear evidence against the landlord by way of Ext.B1 and in the absence of any special reasons pointed out by him worthy of acceptance, we find that the authorities below have not acted perversely in reaching these conclusions.

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Learned counsel for the landlord, relying upon the decision of a Division Bench of this court in Jerry Joseph v. Selvaraj (2002 (2) KLT 129), contended that even if the landlord failed to mention in the petition, the details of vacant rooms in his possession, that cannot be treated as fatal. In the said decision, this court by relying upon the decision of the Apex Court in M.L. Prabhakar v. Rajiv Singal {(2001) 2 SCC 355} in para 18, held that “even if the landlord failed to mention in the petition for eviction about the other premises belonging to him, if materials about those alternate accommodation have been placed before the court and the matter has been adequately considered by the court without causing any prejudice to the

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tenant, the non-disclosure of the availability of buildings in the petition is immaterial.” We fail to appreciate how the said dictum will apply to the facts of this case. Herein, on the evidence it is found by the authorities below that the landlord is having vacant possession of three rooms and no convincing reasons have been pointed out by him for not occupying it. The way in which he has come out with the case now pleaded is also worthy of mention. In the eviction petition nothing was mentioned. The tenant had incorporated sufficient data in para 8 of his objections. No amendment in the pleadings was attempted by the landlord and no replication/reply was filed. In the proof affidavit, it was merely stated that room No.VIII/195 is not vacant, room No.VIII/197 is not owned by him and is not vacant, room No.VIII/198 is in the upper floor and is not suitable for the business and that

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the stair leading to it is only having a width of 3 ½ ft. After his examination, he was recalled for producing Exts.A9 and A9(a). The tenant was examined as R.W.1 on 7.1.2003. Hence, we are of the view that no effective attempt was made by the landlord to have any cogent and convincing reasons for not occupying the vacant rooms. The authorities below have held against the landlord not for the reason that there were no pleadings, but for the reason that there was no cogent and convincing

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evidence on his part. It was further held that building Nos.VI/567, 570 and 574 are outstanding in his possession which is proved by Ext.B1 certified

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copy of the relevant page of the assessment register of the Municipality. The alternate plea made by the landlord that one building was leased out to Shri Muraleedharan, was not substantiated by proper evidence. Therefore, the court below was of the view that going by the first proviso to Section 11

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(3) of the Act, the tenant is entitled to get protection.

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The first proviso to Section 11(3) states as follows:

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“11(3).................

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Provided that the Rent Control Court shall not give any such direction if the landlord has another building of his own in his possession in the same city, town or village except where the Rent Control Court is satisfied that for special reasons, in any particular case it will be just and proper to do so.”

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In fact, in Janatha Drugs v. Maithri Construction (2007 (4) KLT 625) while examining the legal effect of the said provision, it was held by a Division Bench of this court consisting one of us (T.R. Ramachandran Nair, J.), as follows:

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“It is clear that the special reasons should be germane to the issue in question and should not be evasive reasons shown by the landlord. When the landlord came into possession of rooms which are having

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more or less equal space in the very same building, where the tenant also is occupying a similar room, the question is whether the landlord was justified in letting out the rooms for a higher rent while requiring the eviction of the tenant herein....................The burden is on the landlord to plead and prove special reasons when he gets possession of other rooms. The landlord has got a duty to explain the special reasons for not choosing to occupy the premises he has come into possession. We are adverting to the above in the light of the fact that when in a case where the first proviso is attracted, eviction can be ordered only if the court is satisfied that there are special reasons enabling the landlord not to choose to occupy the vacant premises. That the landlord will get more rent if those premises are rented out, rather than occupying one of the rooms for the business proposed to be started, cannot be a special reason for the purpose of the 1^st proviso. It prohibits the power of the court to order eviction unless acceptable special reasons exist.”

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If acceptable reasons are not there, going by the first proviso, the court cannot order eviction. In view of the accepted legal position, we are of opinion that the authorities below have not acted perversely in denying eviction under Section 11(3) of the Act. It cannot be said that the appreciation of evidence is in any way vitiated. Therefore, we reject the said argument raised by the learned counsel for the landlord.

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The other main ground on which eviction sought for is under

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Section 11(4)(ii) of the Act. The respective contentions in the pleadings have been stated by us already. The landlord contends that the works effected amounts to material alterations, and the tenant disputes the same. His case in para 14 of the objection is that already there was a bathroom and a latrine for common use. Only repair works alone have been effected by him. No other independent evidence by way of report of the Commissioner is there.

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The landlord had filed a suit earlier, seeking for an injunction against the tenant from making out material alterations of the building. Exts.A4 and A5 are the reports of the Advocate Commissioner. The Commissioner was not examined. It is in that view of the matter, the Appellate Authority after setting aside the finding rendered by the Rent Controller, remanded the matter for fresh consideration. Significantly, the Appellate Authority was of the view that if Exts.A4 and A5 are eschewed, there is no material evidence on record to show that there was any alteration or addition to the building. But the learned counsel for the landlord submitted that even without looking into Exts.A4 and A5 it can be concluded that the constructions made are material alterations and therefore the grounds pleaded under Section 11(4)(ii) of the Act have been proved by

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him. Reliance was placed on the decision of this court in Seethalakshmi Ammal v. Nabeesa Beevi (2003 (1) KLT 391) to contend that as regards material alterations, the view of the landlord has to be taken and as he has not consented to the alterations and as there is prohibition against the same in the lease deed, the tenant is liable to be evicted.

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Per contra, learned counsel for the tenant relied upon the decisions of the Apex Court in Om Prakash v. Amar Singh and others {(1987) 1 SCC 458} and Reghunathan v. Varghese (2005 (4) KLT 147 (SC) and the following decisions rendered by this court, viz. Aboobacker v. Nanu (2001 (3) KLT 815) and Lakshmi v. Labbah Kunju Ameer Hamsa (2005 (3) KLT 627) to contend for the position that the alterations, if any, made will not reduce the value and utility of the building materially and permanently. It is submitted that by making improvements in the bathroom, addition of the facility by providing a wash basin and a water tank for storing water to clear the utensils, no damage has been caused to the structure or to the front of the building and therefore no eviction can be ordered.

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Going by Section 11(4)(ii) of the Act, the requirement will be satisfied only if the tenant has used the building in such a manner as to

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cause damage or has reduced its value and utility materially and permanently. Going by the decision of this court the words 'materially' and 'permanently' are not disjunctive.

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Before going into the contentions raised by the parties, we will refer to the legal position declared by the Apex Court in Om Prakash's case {(1987) 1 SCC 458} and Reghunathan's case (2005 (4) KLT 147 SC). In the former case, after considering the meaning of the word 'materially' and 'alter', their Lordships laid down in para 6 the legal position thus:

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“In determining the question the court must address itself to the nature, character of the constructions and the extent to which they make changes in the front and structure of the accommodation, having regard to the purpose for which the accommodation may have been let out to the tenant. The legislature intended that only those constructions which bring about substantial change in the front and structure of the building should provide a ground for tenants' eviction, it took care to use the word “materially altered the accommodation”. The material alterations contemplate change of substantial nature affecting the form and character of the building. Many a time tenants make minor constructions and alterations for the convenient use of the tenanted accommodation. The legislature does not provide for their eviction instead the construction so made

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would furnish ground for eviction only when they bring about substantial change in the front and structure of the building. Construction of a chabutra, almirah, opening a window or closing a verandah by temporary structure or replacing of a damaged roof which may be leading or placing partition in a room or making similar minor alterations for the convenient use of the accommodation do not materially alter the building as in spite of such constructions the front and structure of the building may remain unaffected. The essential element which needs consideration is as to whether the constructions are substantial in nature and they alter the form, front and structure of the accommodation. It is not possible to give exhaustive list of constructions which do not constitute material alterations, as the determination of this question depends on the facts of each case.”

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In Reghunathan's case (2005 (4) KLT 147(SC)), the Apex Court

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considered the various aspects concerning the interpretation of Section 11 (4)(ii) in detail. It was held that “the question depends on the facts of the case. The nature of the building, the purpose of the letting, the terms of the contract and the nature of the interference with the structure by the tenant, are all relevant. The destruction or damage has to be adjudged from the stand point of the landlord.” After referring to the nature of the constructions made by the tenant, viz. bricking up of the western wall and

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the door and windows on the northern, western and eastern walls, it was held that the bricked up portions can be removed and the doors and windows restored without weakening the structure. Referring to the construction, viz. fixing up a rolling shutter, it was held that the same provides more security to the premises. Ultimately, while referring to the meaning of the words “material and permanent”, it was held that “the words are not disjunctive, like in some other Acts. Here, the landlord has not proved the material and permanent impairment in value or utility. One suspects that the value and utility are enhanced. The landlord has failed to prove that the acts of the tenant constitute the user of the building in such a manner as to destroy or reduce the value or utility of the building materially and permanently.” The order of eviction was set aside by the Apex Court.

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In Aboobacker's case (2001 (3) KLT 815), a Division Bench of this court approved the decision reported in Shanmugam v. Rao Saheb (1988 (1) KLT 86). In that decision it was held that “the expression “materially and permanently” in clause (ii) of sub-section (4) of the Act would certainly indicate that a landlord cannot get an order of eviction on that ground by mere proof of minor a destruction, or alteration, even if it results in marginal reduction of value or utility. As the expression was

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used conjunctively the legislature has indicated that even material alterations of a temporary nature would not help the landlord in getting an order of eviction. The destruction or reduction of utility or value of the building must be of a reasonably substantial magnitude.”

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In Lakshmi's case (2005 (3) KLT 627), after referring to the evidence available in the case, it was held that “minor alterations, even if made by the tenant to suit his hotel business is no ground for ordering eviction.” The Division Bench relied on the decision of the Apex Court in Om Prakash's case {(1987) 1 SCC 458). Learned counsel for the tenant relied upon the said decision to contend that in this case also the tenant is conducting a hotel business and the constructions, if any, will amount to minor alterations only for the convenient conduct of the hotel business.

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Bearing in mind the principles discussed above, we will now advert to the allegations in the eviction petition and the evidence adduced by the parties, to consider whether the alleged constructions amount to material alterations which reduce the very utility and value of the building. As we have noted already, the allegations are mainly that the tenant has constructed a new latrine in one of the rooms, a water tank for storing water was made and a drain has been put obviously to drain out water from the

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tank, a new wash basin with bricks has been put in one room and a pipe connection was also taken to the water tank. The tenant did not admit that he had made all such constructions. According to him, he had only repaired the existing bathroom and latrine and no new constructions have been made in that regard. Except the oral evidence of P.W.1, the landlord, there is no other independent evidence in support of these allegations, as he is not relying upon Exts.A4 and A5. In the proof affidavit in para 2 he has reiterated the same.

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Even if the allegations are accepted in its entirety, there is no allegation that the tenant has made any structural alterations. No walls have been demolished, no construction affecting the roof or altering the front and structure of the building has been made. Going by the principles stated by the Apex Court in Om Prakash's case {(1987) 1 SCC 458) and in Reghunathan's case (2005 (4) KLT 147), what is important is to see whether any interference has been made by the tenant with the structure. The nature of the building and the nature of the purpose for which it was let out, have also to be considered. Herein, the building has been let out for conducting a hotel. A bathroom, a wash basin and a water tank, obviously for storing water to clean the utensils will provide necessary convenience

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for the conduct of the hotel. It cannot be said that these constructions will interfere with the structure of the building itself or as a result of which, any

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damage has been caused to the building. As held by the Apex Court, the nature and character of the constructions and the extent to which they make changes in the front and structure of the accommodation, having regard to the purpose for which the accommodation may have been let out to the tenant, have to be considered. We are of the view that substantial change in the front and structure of the building have not been resulted by the constructions made by the tenant in this case. The nature and character of the building have not been changed substantially. The construction cannot, therefore, be characterised as material alteration which has resulted in reducing the value and utility of the building as such. Of course, the tenant was not successful in his plea that there was consent of the landlord and there was a permission as per the terms of the lease deed. Even though going by the terms of the lease deed the landlord had agreed to make certain constructions listed therein, obviously he cannot raise a contention that such improvements will amount to material alteration. Herein, going by the case pleaded by the tenant, he had only repaired the existing bathroom and latrine and cement plastering was made. That will not, at any rate, amount

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to any structural alterations of a substantial nature. Apart from that, there is no evidence to show that the constructions made have resulted in reducing the value and utility of the building materially and permanently. How the utility and value has been reduced, are not explained by the landlord in his proof affidavit also. Actually, a bathroom and a wash basin can only be termed as amenity and the water tank is obviously for storing water for the use of the hotel. There is no evidence to show that a drain that is made to drive of water from the water tank has been constructed by destroying any portion of the wall of the building also. As evidence is lacking in all these respects, we are of the view that either due to the construction or in case of removal of the same, no damage will be caused to the structure and the utility and value of the building cannot be said to be reduced by the construction. As held by this court in Shanmugam v. Rao Saheb (1988 (1) KLT 86), the destruction or reduction of utility or value of the building must be of a reasonably substantial magnitude. Since the expressions “materially and permanently” are used conjunctively, the legislature has indicated that even material alterations of a temporary nature would not help the landlord in getting an order of eviction. Since we are of the view that no interference has been caused to the structure and that the alteration, if any,

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effected has not affected its utility or value, the landlord is not entitled for eviction under Section 11(4)(ii) of the Act. Therefore, the view taken by the Rent Control Court in that regard cannot be sustained. These aspects have not been considered in the correct legal perspective by the Rent Control Court and the Appellate Authority. They have jumped into the conclusion that the improvements will automatically amount to material alterations resulting in reduction in value and utility of the building, in the absence of any consent or permission granted by the landlord expressly or by the terms of the lease deed. That not being the sole test, we are of the opinion that the view taken by the authorities in that respect is perverse and we set aside the same.

¶122

The other question is regarding the claim for eviction under Section 11(2)(b) of the Act. Here, the Rent Control Court found in favour of the tenant and the said view has been reversed by the Appellate Authority. The arrears claimed, going by the averments in the petition for eviction, have occurred between 23.9.1969 till April, 1987, i.e. an amount of Rs. 5,725/- after adjusting the amount paid, along with its interest and the rent accrued from April, 1987. The objection raised by the tenant is that admittedly the partnership was dissolved only on 16.10.1999

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and the landlord cannot claim the arrears, if any, prior to the said date. Reliance is placed on the dictum laid down in Suhara's case (1996 (2) KLT 936). Learned counsel for the tenant submitted that the said dictum does not apply herein, as here there is no assignment. The learned counsel for the landlord relied upon the decisions of the Apex Court in Shri Ram Pasricha v. Jagannath and others (AIR 1976 SC 2335) and Smt. Kanta Goel v. B.P. Pathak and others (AIR 1977 SC 1599). Learned counsel for the tenant relied upon the decision of the Apex Court in N.M. Engineer and others v. Narendra Singh Virdi and another (AIR 1995 SC 448) to argue for the position that rent due before assignment do not constitute arrears of rent and it was merely an actionable claim.

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The Rent Control Court took the view that as the partnership was dissolved only on 16.10.1999 and as the landlord became the owner of the property only by the said dissolution, the claim raised for eviction under Section 11(2)(b) cannot be sustained. The Appellate Authority took the view that even prior to 16.10.1999 the landlord being one of the co-owners of the building, is entitled to get an order of eviction on the ground of arrears of rent, since there is no evidence to show that the tenant has paid rent to other co-owners also. In Suhara's case (1996 (2) KLT 936), a

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Division Bench of this court held that “a petition for eviction under Section 11(2)(b) of the Act cannot be filed by an assignee landlord alleging existence of arrears of rent which fell due prior to the assignment of the building in his favour even if the right to recover such prior arrears of rent was later assigned to him by a separate assignment deed.” Their Lordships have referred to the provisions of Section 109 of the Transfer of Property Act and its proviso. The proviso to Section 109 of the T.P. Act reads thus:

¶128

“ Provided that the transferee is not entitled to arrears of rent due before the transfer, and that, if the lessee, not having reason to believe that such transfer has been made, pays rent to the lessor, the lessee shall not be liable to pay such rent over again to the transferee.”

¶129

The plea raised by the learned counsel for the landlord is that even prior to 16.10.1999 the landlord was a co-owner and as a co-owner, he was entitled to maintain an application for the defaulted rent and that right survives after the dissolution of the partnership when he has acquired the ownership of the entire property and therefore the claim under Section 11(2) (b) can be sustained. It was argued that as a partner, he was a co-owner on the assets of the partnership. Learned counsel referred to para 28 of the

¶130

decision of the Apex Court in Shri Ram Pasricha's case (AIR 1976 SC 2335) in support of the above plea. We extract para 28 below:

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“Mr. V.S. Desai reads to us from 'Salmond in Jurisprudence' (13^th edition) and relies on the following passage in Chapter 8 (Ownership), paragraph 46 at page 254:

¶134

“As a general rule a thing is owned by one person only at a time, but duplicate ownership is perfectly possible. Two or more persons may at the same time have ownership of the same thing vested in them. This may happen in several distinct ways, but the simplest and most obvious case is that of co-ownership. Partners, for example, are co-owners of the chattels which constitute their stockin-trade, of the lease of the premises on which their business is conducted, and of the debts owing to them by their customers. It is not correct to say that property owned by co-owners is divided between them, each of them owning a separate part. It is an undivided unity, which is vested at the same time in more than one person .......... The several ownership of a part is a different thing from the co-ownership of the whole. So soon as each of two coowners begins to own a part of the thing instead of the whole of it, the co-ownership has been dissolved into sole ownership by the process known as partition. Co-ownership involves the undivided integrity of what is owned.”

¶135

In that case the question which came up for consideration is whether a landlord who is a co-owner of the premises with others is the 'owner' within the meaning of Section 13 of the West Bengal Premises Tenancy Act, 1956. The contention raised by learned counsel for the landlord, relying upon the

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above quoted para, is that a partner is also a co-owner and the same principle will apply. We propose to consider it in the light of certain aspects considered in other decisions.

¶139

The Apex Court in Champaran Cane Concern (dissolved) v. State of Bihar and another (AIR 1963 SC 1737) considered the difference between a partnership and co-ownership and laid down the legal position in para 8 thus:

¶140

“The main differences between a partnership and co-ownership are: (1) co-ownership is not necessarily the result of an agreement, whereas partnership is; (2) co-ownership does not necessarily involve community of profit or loss, but partnership does; (3) one co-owner can, without the consent of the other, transfer his interest etc. to a stranger, a partner cannot do this; and lastly but prominently, (4) while in a partnership each partner acts as an agent of the other, in a co-ownership one co-owner is not as such the agent, implied or real, of the other, Lindley on Partnership, 12^th Edn; page 57, Rel. on.”

¶141

In Keshavji Ravji and Co. etc. etc. v. Commissioner of Income-tax (AIR 1991 SC 1806), the Apex Court, after referring to an earlier decision of the Apex Court in Narayanappa v. Krishtappa (AIR 1966 SC 1300), considered the nature of interest of a partner of a firm and held in para 8 that “a firm under the general law is not a distinct legal entity and has no

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legal existence of its own. The partnership property vests in all the partners and in that sense every partner has an interest in assets of the partnership. However, during the subsistence of the partnership no partner can deal with any portion of the property as his own.” The following is the relevant extract from the decision in Narayanappa's case (AIR 1966 SC 1300):

¶145

“............. The whole concept of partnership is to embark upon a joint venture and for that purpose to bring in as capital money or even property including immovable property. Once that is done whatever is brought in would cease to be the exclusive property of the person who brought it in. It would be the trading asset of the partnership in which all the partners would have interest in proportion to their share in the joint venture of the business of the partnership. The person who brought it in would, therefore, not be able to claim or exercise any exclusive right over any property which he has brought in, much less over any other partnership property. He would not be also to exercise his right even to the extent of his share in the business of the partnership.......................”

¶146

We are, therefore, of the view that the concept that a co-owner can maintain an application for eviction of the premises, cannot apply on all fours in the case of a partner.

¶147

The question to be considered here is whether on the dissolution of the partnership, the arrears of rent prior to 16.10.1999 still enables the

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landlord to seek eviction under Section 11(2)(b) of the Act.

¶150

The point at issue is not res-integra in the light of the exposition

¶151

of law in N.M. Engineer's case (AIR 1995 SC 448). Regarding the question whether the rent due before the assignment should constitute arrears of rent or it is only a debt, the Apex Court in the above decision, after considering various aspects, held that “the rent is merely a debt. Therefore, whatever might have been due prior to deed of lease dated 8.6.67, could not constitute arrears of rent. It was mere actionable claim. That being so, the notice does not satisfy the requirements of Section 12(3) (a).” We are of the view that the said legal position applies to the facts of this case and the question whether the landlord was a co-owner in the partnership and whether he can maintain an application for eviction, is not the real test. The rent claimed as due prior to 16.10.1999 is a mere debt. It cannot constitute arrears of rent after that date for an action under Section 11(2)(b). It was mere actionable claim as held by the Apex Court in N.M. Engineer's case (supra). The provisions of Section 11(2)(b) shows that a landlord can seek eviction on the ground of arrears of rent. If the amount that is due prior to 16.10.1999 cannot be termed as arrears of rent, automatically a petition seeking eviction under Section 11(2)(b) cannot be

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maintained. Ext.A13 is the deed of dissolution of partnership dated 6.1.2001. It shows that a separate deed of settlement was executed by the partners on 16.10.1999, wherein the shop rooms have been partitioned among the partners. Therefore, it is clear that there was a partition on 16.10.1999. We notice that in Ext.A13 the relevant clause states that “the first, third and fourth parts, their survivors, representatives, assignees and or attorneys are hereby authorised to realise by suit or otherwise the entire arrears of rent due from the tenants of their respective holdings and to give effectual receipts and discharge for the same in their individual names.” As rightly pointed by the learned counsel for the tenant, it can be considered only as a debt, going by the implications of the above term. Going by Section 6(a) of the Transfer of Property Act, a mere right to sue cannot be transferred. Whatever was the position of the landlord as a partner before 16.10.1999, after dissolution of the partnership with effect from that date, his rights have been crystallised by the above noted clause in Ext.A13. Hence, even if for argument's sake it can be taken that he was entitled to seek for eviction, on the ground of arrears of rent prior to 16.10.1999 on behalf of the firm, after 16.10.1999 his right to claim arrears of rent is controlled by the specific terms in Ext.A13. In that view of the matter, we

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find that the landlord is not entitled to seek eviction under Section 11(2)(b) of the Act for the alleged arrears of rent due prior to 16.10.1999. The rent subsequent to 16.10.1999 have been deposited by the tenant during the pendency of the proceedings. We, therefore, set aside the order of eviction granted by the Appellate Authority under Section 11(2)(b) of the Act.

¶158

We, therefore, allow R.C.R.No.270/2004 and dismiss R.C.R.No.385/2004. The petition for eviction stands dismissed.

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( P.R.Raman, Judge.)

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(T.R. Ramachandran Nair, Judge.)

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kav/

Abdul Kader v. George Joseph

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Abdul Kader v. George Joseph

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