Allowed

M/S.Cannanore Drug House v. Cheriya Melat Abdul Azeez

Kerala HC14 Dec 2012RCRev./286/2012

Case brief

AI extract

What is this about?

During revision, the High Court dismissed the tenant's challenge regarding the eviction of premises for the landlord's son's occupation. The court upheld the lower appellate court's finding that the bona fide requirement was satisfied and granted the tenant six months to vacate.

What did the court decide?

Dismissed revision and granted tenant six months to vacate premises.

M/S.Cannanore Drug House Vs Cheriya Melat Abdul Azeez — Landlord and Tenant | Kerala HC (2012)

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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 K.T.SANKARAN &

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THE HONOURABLE MR.JUSTICE M.L.JOSEPH FRANCIS

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FRIDAY, THE 14TH DAY OF DECEMBER 2012/23RD AGRAHAYANA 1934

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RCRev..No. 286 of 2012 (A)

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AGAINST THE JUDGMENT IN RCA.149/2006 OF ADDL. RENT CONTROL APPELLATE AUTHORITY, THALASSERY R.C.P.NO.37/2005 OF RENT CONTROL COURT, KANNUR

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REVISION PETITIONER: RESPONDENT: RESPONDENT:

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M/S.CANNANORE DRUG HOUSE REPRESENTED BY ITS MANAGING PARTNER MR.MOTI MATHAN OOMMEN, BUILDING NO CW-1173, FORT ROAD, KANNUR-1, REPRESENTED BY POWER OF ATTORNEY HOLDER K.RAGHAVAN, S/O.LATE P.K.RAMAN, AGED 79 YEARS, RESIDING AT VIMALARAAG, MANAL, KANNUR- 8.

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BY ADV. SRI.AVM.SALAHUDDEEN

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RESPONDENT: APPELLANT: PETITIONER:

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CHERIYA MELAT ABDUL AZEEZ, S/O.ABDULLA HAJI, RESIDING AT 'AMJA', THANA, KANNUR 12.

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BY ADV. SRI.SUNIL V.MOHAMMED ADV. SMT.V.N.SHASHIKALA

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THIS RENT CONTROL REVISION HAVING COME UP FOR ADMISSION ON 14-12-2012, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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I.A.NO.1954/2012 IN R.C.R.NO.286/2012

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DISMISSED

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SD/- K.T.SANKARAN, JUDGE

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14/12/2012 SD/- M.L.JOSEPH FRANCIS, JUDGE

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//TRUE COPY//

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AHZ/

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K.T.SANKARAN & M.L.JOSEPH FRANCIS, JJ.

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R.C.R. NO. 286 OF 2012 A

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Dated this the 14^th day of December, 2012

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O R D E R

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K.T.Sankaran, J.

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The tenant in R.C.P.No.37 of 2005 on the file of the Rent Control Court, Kannur, who was the respondent in R.C.A.No.149 of 2006 on the file of the Rent Control Appellate Authority, Thalassery, is the revision petitioner. The respondent/landlord filed the Rent Control Petition under Sections 11(3) and 11(4)(iii) of the Kerala Buildings (Lease and Rent Control) Act.

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The petition schedule building is situated in second floor of the building owned by the landlord. In the ground floor of the building, Dena Bank is the tenant. In the first floor, M/s.Cannanore Drug Lines, a partnership firm who is the tenant in R.C.P.No.35 of 2005 from which R.C.R.No.287 of 2012 arose, is the tenant. The building is situated in the heart of Kannur town.

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R.C.R. NO. 286 OF 2012 A

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The petition schedule building (second floor) was rented out to the tenant as per Ext.A1 agreement dated 15.1.2000. The agreement is an unregistered agreement. The lease is for a term of five years. There is a renewal clause in the document on condition of enhancement of rent by 25%.

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The bona fide need put forward by the landlord is that the building is required for the occupation of his son Dr.Makthoum who was undergoing his higher studies in London at the relevant time. It was alleged that the son of the landlord wanted to start a clinic in the petition schedule building. The tenant contended that the bona fide need put forward by the landlord is not genuine. According to the tenant, the tenancy commenced in 1978 and subsequently, Ext.A1 lease deed was executed. Based on the renewal clause in Ext.A1 lease deed, the tenant paid enhanced rent in the bank account of the landlord and the landlord received the same. Therefore, there is a renewal of the term of the lease deed. The tenant contended that the Rent Control Petition is, therefore, premature, since the term of the lease would expire only on 31.12.2010. It was also contended that the son of the landlord is settled abroad and he is not depending on the landlord. The tenant also raised a contention that the

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R.C.R. NO. 286 OF 2012 A

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landlord is having other buildings and, therefore, the first proviso to Section 11(3) is attracted. It was also contended that the tenant is entitled to the protection under the second proviso to Section 11(3) of the Kerala Buildings (Lease and Rent Control) Act.

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The Rent Control Court dismissed the Rent Control Petition on both the grounds. The landlord filed appeal before the Rent Control Appellate Authority. However, the landlord did not press the ground of eviction under Section 11(4)(iii) of the Act. The Appellate Authority found that the bona fide need put forward by the landlord under Section 11(3) is genuine, that the Rent Control Petition is not hit by the first proviso to Section 11(3) of the Act and that the tenant has failed to prove the ingredients of the second proviso to Section 11(3) of the Act.

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The contention put forward by the tenant that the term of the lease has not expired and, therefore, the Rent Control Petition was prematurely filed was negatived by the Appellate Authority holding that Ext.A1 is not admissible in evidence as the agreement was unregistered. It was also held that Ext.A1 cannot be used for the purpose of proving the term of lease as the said purpose cannot

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R.C.R. NO. 286 OF 2012 A

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be said to be a collateral purpose for the purpose of enabling the parties to make use of an unregistered agreement. The Appellate Authority noticed the grounds on which the Rent Control Court rejected the application under Section 11(3) and answered each and every point in the following manner in paragraphs 10 to 16 of the judgment. For the sake of convenience, paragraphs 10 to 16 of the judgment are extracted below.

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“10. The court below accepted the contentions of the tenant and recorded a finding that the claim of the landlord is not genuine and bonafide. The court below applied the following reasonings in entering into a conclusion that the claim of the landlord is not genuine and bonafide:-

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(i) Failure on the part of the landlord to incorporate pleadings with regard to the present employment of his son speaks against his case.

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(ii) The son of the landlord was not examined before the court.

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(iii) An adverse inference is to be drawn against the landlord due to the non-production of the Passport of his son.

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(iv) Landlord failed to successfully give evidence regarding the details of the clinic to be run by his son.

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R.C.R. NO. 286 OF 2012 A

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(v) No materials were produced by the landlord to show that his son would come back in 2006.

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(vi) Nobody can expect that a person now doing his studies in England would think of starting a clinic in a building like the one scheduled in the petition.

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The learned counsel for the appellant vehemently criticised the reasonings applied by the court below in recording a finding against the landlord. Now, let us appreciate the merits of the reasonings recorded by the court below in rejecting the claim of the landlord. Firstly, the court below found that lack of pleadings regarding the present employment of the son of the landlord goes against the case of the landlord. It is true that landlord has not incorporated pleadings regarding the present engagement of his son. While giving evidence PW1 stated that his son Dr.Makthoum, after completing M.B.B.S., went to England for doing F.R.C.S., a higher academic course. He further admitted that in addition to his higher studies his son is also working there. It is natural that a person who completed his basic course in Medicine to practice his profession while doing higher studies. Landlord has no case that his son is having a permanent employment in London. His specific case is that his son would come back in 2006 after completing his higher studies. When the evidence of the landlord goes in that way, I am

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R.C.R. NO. 286 OF 2012 A

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unable to accept the reasoning of the court below that the lack of pleadings regarding the present employment of the son of the landlord goes against him. Moreover, the settled law is that a liberal view is to be taken with regard to the pleadings in the RCP. In Madhavan v. Leelamma (1991(2) KLJ 2) , a Division Bench of the Hon'ble High Court of Kerala held that in the matter of pleadings, a liberal view is to be taken if the court feels that no prejudice has been caused to the tenant on account of the pleadings of the landlord. It was further held that it is not proper to deny the relief to the landlord on the ground that there is no pleadings. I do not think that any prejudice has been caused to the tenant on account of the lack of pleadings with regard to the present engagement of the son of the landlord.

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Secondly, non-examination of the son of the landlord has been projected as a ground to discard the case of the landlord. The landlord himself gave evidence as PW1 in support of the intention of his son. Non-examination of the dependent son of the landlord is not fatal to a petition for own use and occupation of the son. (see Musthafa Haji v. Umbichi (2004 (2) KLT 1110 ).

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Thirdly, non-production of the Passport issued in favour of the son of the landlord has been highlighted

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R.C.R. NO. 286 OF 2012 A

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to draw an adverse inference against the case of the landlord. If there is sufficient evidence to conclude that the son of the landlord is intended to come home and proceed with the proposed plans projected in the petition I do not think that non-production of his Passport or the copy of the same would affect the bonafides of the landlord. It is the specific case of the landlord that his son is expecting to come back after his studies in 2006. So, I feel that non-production of the Passport of his son will not be sufficient to draw an adverse inference against the case of the landlord.

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Fourthly, the court below found that the landlord failed to give the details regarding the project of his son. Landlord gave evidence to the effect that his son actually intends to start a clinic in the petition schedule building and that he is having the financial capacity to do so. While examined in cross, landlord stated that he was unaware of the technical aspects relating to the running of the clinic and that he had no knowledge regarding the details of the investment to be done for starting the clinic. What is discernible from the evidence of PW1 is that her son genuinely wants to start a clinic in his home-town. It may be true that his father, a businessman, may not be knowing about the technical aspects relating to the clinic to be opened. So, the lack of knowledge regarding the technical aspects of the

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R.C.R. NO. 286 OF 2012 A

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clinic to be opened is not a ground to treat the claim of the landlord as not bonafide.

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Fifthly, the learned Rent Controller found that no materials were available to show that landlord's son would come back in 2006. It is the case of the landlord that his son went to London for doing his higher studies and that he would come back in 2006. It has come out in evidence that he had taken his wife also to London. It is to be seen that the needy is doing higher studies there and at the same time practicing his profession. I cannot find any lack of intention on the side of the needy to come back simply because of the fact that he had taken his wife also to London. The needy is a young Doctor. There is nothing un-natural in bringing his wife also to his place of education, if he is having the capacity to do so. Such circumstances cannot be taken as a ground to conclude that the needy is having no intention to come home. I find no merit in such reasonings.

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Lastly, the court below recorded that a person like the needy who is doing his studies in London would not think of starting a petty clinic in a building like the one scheduled in the petition. I am not in agreement with the said finding of the court below. Petition schedule building is measuring 83 feet in length and 23 feet in width, apart from the 4 feet varandha on the two

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R.C.R. NO. 286 OF 2012 A

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sides and a stair-case. The settled law is that it is the landlords who decide as to how the building could be put to their beneficial use and it is for the landlord to decide whether the space is sufficient for the need and also the tenant cannot dictate to the landlord regarding his need or choice of the building. (See Ameena v. Muhammed (2005(4) KLT (SN) 104, Page 76); Jerry Joseph vs. Selvaraj (2002 (2) KLT 129) and Madhava v. Pathumabi (2005 (3) KLT 369 ). “

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In a recent decision, a Division Bench of this Court in Aniyan T.V. and another v. T.K.Raveendran (2012 (4) KHC 811 (DB)) , considered the scope and ambit of Sections 17 and 49 of the Registration Act and to what extent an unregistered lease deed can be used for collateral purpose and held thus:

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“19. Though Section 49 of the Registration Act bars reception of an unregistered document in evidence, which is required to be registered under Section 17 of the Registration Act, the Apex Court in Champalal v. Samrathbai (AIR 1960 SC 629) was of the view that prohibition under Section 49 is not against the filing of the document and what is prohibited is the admissibility of the same in evidence so as to affect immovable property falling under Section 17. The Apex Court in

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R.C.R. NO. 286 OF 2012 A

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Dinaji and Others v. Daddi and Others (AIR 1990 SC 1153) had considered the effect of an unregistered document which is required to be registered under Section 17 of the Transfer of Property Act. It was observed that such a document will not avail to create, declare, assign, limit or extinguish any right, title or interest in or to the immovable property made mention of in the document. In other words, an unregistered document cannot be used for the purpose of establishing that the document created or declared or assigned or limited or extinguished a right to immovable property.

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The trend of judicial opinion is to the effect that unregistered documents which are compulsorily registrable under Section 17 of the Registration Act can be looked into only for collateral purposes. Collateral purpose has a limited scope and meaning. It is possible to lay down some haphazard illustrations on the point in the light of judicial pronouncements.

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Purposes which are collateral in nature:

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a) For proving the nature and character of possession of the tenant ( Per Satish Chand Mukhan and Others v. Goverdhandas Byas and Others (AIR 1984 SC 143).

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R.C.R. NO. 286 OF 2012 A

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b) For ascertaining whether the purpose of lease was residential or not. ( Per Rai Chand Jain v. Miss Chandra Kanta Khosla (AIR 1991 SC 744) .

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c) For ascertaining the commencement of possession, rate of rent etc. ( Per Pieco Electronics and Electricals Ltd. v. Smt. Tribeni Deve (AIR 1990 Cal. 135).

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Purposes which are not collateral:

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a) For ascertaining whether the lessee is entitled to create a sub lease or not. ( Per M/s.Bajaj Auto Ltd. v. Bahari Lal Kolhi (AIR 1989 SC 1806).

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b) For ascertaining the term of lease. ( Per Ishwar Dutt v. Sunder Singh (AIR 1961 J&K 45) .

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c) For ascertaining the term in a lease regarding notice of eviction. ( Per M/s.Jagajit Industries Ltd. v. Rajiv Gupta (AIR 1981 Delhi 359) .

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d) For ascertaining the date on which the tenancy began. ( Per Zarif Ahmad and Another v. Satish Kumar and Another (AIR 1983 All. 164) .

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e) For ascertaining as to who is the tenant and on what terms he has been created a tenant (Per Haran Chandra Chakravarti v. Kaliprasanna Sarkar (AIR 1932 Cal. 83).

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The aforesaid list is not exhaustive. The net conclusion that can be drawn from the decisions referred to above is that an unregistered lease cannot

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R.C.R. NO. 286 OF 2012 A

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be pressed into service to create, declare, assign, limit or extinguish any right, title or interest in or to the property comprised in the document. As the term of lease imposes a limit on the interest of the parties, an unregistered document cannot be relied on for ascertaining the term of lease. This position is further clarified by the Apex Court in K.B.Shah and Sons (P) Ltd. v. Development Consultant Ltd. (2008) 8 SCC 564). There, the Apex Court was considering a case where the eviction proceedings were based on the memorandum of lease agreement. The agreement was unregistered. There was a clause in the agreementclause (9)- which required the lessee to use the tenanted premises only for its particular named officer. The Apex Court found that it was an important term forming part of lease agreement and it cannot be looked into even for collateral purposes to come to a conclusion that the respondent was liable to be evicted because of violation of the aforesaid clause.”

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Learned counsel for the petitioner/tenant relied on the decision of the Supreme Court in Anthony v. Ittoop (2000 (3) KLT 123 (SC)) and contended that an unregistered lease agreement can be looked into for the purpose of ascertaining for what term the lease was executed and for what term the renewal would extend. The

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R.C.R. NO. 286 OF 2012 A

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decision in Anthony v. Ittoop (2000 (3) KLT 123 (SC)) was considered by a Division Bench in Ahammed v. Krishnalal (2005 (3) KLT 1004) and it was held thus:

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“9. In Anthony v. K.C.Ittoop & Sons , 2000 (3) KLT 123 = (2000) 6 SCC 394, the question arose whether a tenant of a building could be evicted by filing a suit in the regular court when the building is situated in an area covered by the Kerala Buildings (Lease and Rent Control) Act and when the lease was for a period of more than one year and the lease deed was not registered. The High Court held that the tenant has not proved that independent of the void lease the relationship of the landlord and tenant has come into existence between the parties and therefore the suit was maintainable. The Supreme Court in further appeal held that the instrument of lease is required to be registered and the court is disabled from using the instrument as evidence and it goes out of consideration. On the admission of the landlord that the defendant was inducted into possession of the building by the owner and thereafter he was paying monthly rent the legal character of the defendant has to be attributed to a jural relationship which cannot be placed anything different from that of lessor and lessee. Therefore, the defendant could be evicted only under the provisions of the Rent

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Control Act. In that case, the court was concerned with the status of the defendant as to whether he was a lessee or of any other legal character. That by itself will not help the revision petitioner in this case as by giving effect to the term in the sale deed that the tenant can continue in possession for ten years, he will be enforcing a term in a lease transaction which is otherwise unenforceable in law for want of a registered document. If the original landlords were not bound by the term of the lease deed as it was not a registered document, the transferee also cannot be bound to do so. ...”

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The Appellate Authority rightly held that the bona fide need put forward by the landlord is genuine, that the tenant has not prima facie shown that the landlord is having another building and that the tenant has failed to establish the ingredients of the second proviso to Section 11(3) of the Act. The findings rendered on these aspects are findings of fact based on the pleadings and evidence in the case. We do not find any ground to interfere with the well considered judgment of the Appellate Authority.

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For the aforesaid reasons, the Rent Control Revision is dismissed.

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R.C.R. NO. 286 OF 2012 A

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Lastly, the learned counsel appearing for the petitioner/tenant submitted that the tenant may be afforded a reasonable time to vacate the premises. Taking into account the facts and circumstances of the case, we grant six months' time to the tenant to vacate the premises on condition that the tenant shall file an unconditional undertaking before the Rent Control Court on or before 28.2.2013, unconditionally undertaking to vacate the premises on or before the expiry of six months and also on condition that the tenant shall pay the arrears of rent, if any, to the landlord on or before 28.2.2013, and also on condition that the tenant shall continue to pay the monthly rent on or before 10^th of every succeeding month till the tenanted premises is vacated.

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(K.T.SANKARAN) Judge

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(M.L.JOSEPH FRANCIS) Judge

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ahz/

M/S.Cannanore Drug House v. Cheriya Melat Abdul Azeez

Case brief

What is this about?

What did the court decide?

M/S.Cannanore Drug House v. Cheriya Melat Abdul Azeez

Case brief

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