BHOOLCHAND AND ANR. v. KAY PEE CEE INVESTMENTS AND ANR

Citation: [1990] SUPP. 2 S.C.R. 251

Court: Supreme Court of India

Bench: J.S. VERMA, K. JAYACHANDRA REDDY

Case summary

If, however, this ground also is upheld, then the decree being passed even on this ground, the further question of greater hardship to the landlord or the tenant under Section 21(4) of the Act would not arise....

Judgment text

The Judgment of the Court was delivered by VERMA, J. These appeals by special leave are by the tenant and the sub-ten. ant against a decree for eviction passed on the grounds of sub-letting and the reasonable and bona fide requirement of the respondent-landlord specified in clauses (f) & (h) of the proviso to sub-section 1of Section 21 of the Karnataka Rent Control Act, 1961 (hereinafter called 'the Act'). The Trial Court had rejected the landlord's application for an order of eviction on these grounds, but the High Court in a revision under Section 50 of the Act has set aside the Trial Court's order and passed the decree for eviction on these grounds. Hence these appeals. The material facts are undisputed at this stage. The premises comprises of two shops and a house adjoining the shops and belonged earlier to one T. A. Jotindranath Mudaliar. The premises were Jet out by the original lessor. to M/s. Bhoolchand Chandiram (Appellant in Civil Appeal No. 4701of1985) on 4. 10.

1943 on terms contained in the letter dated 4. 10. 1943 from the original lessor to M/s. Bhoolchand Chandiram which reads as under: ''T. A. Jotindranath 933, Laxmipur Mudaliar. Mysore, 4th October 43 To Messrs. Boolchand Chandiram, Silk Merchant, C/o Messrs. Bhagwandas Shyam sunder & Co. , 112, Commercial Street, Bangalore Cant!. Dear Sirs, / With reference to your letter dated 30th Sept. 43 and your persona_] conversation about renting out my shops in the Commercial Street, Bangalore Cantonment, it is agreed and confirmed that you are prepared to take the . two shops at monthly rent of Rs. 430 (Rs. Four! hundred and thirty only) with two years agreement and three month's advance and execute the necessary rental Deed, with the option of sub-letting one of the shops. As for the House adjoining the shops at monthly rent of Rs. 50 (Rs. Fifty only) with one mpnth's advance and Eleven Month's rental Deed. You have the option of sub-letting the house also. Yours sincerely, sd/- T. A.

Jotindernatl1 Mudaliar" M/s. Bhoolchand Chandiram continued as a tenant in the premises and sometime in the year 1946 sublet one of the two shops to one 'Arts Palace'. Later, w. e. f. 1. 4. 1948 the appellant M/s. Bhoolchand Chandiram inducted another sub-tenant M/s. Super Dry Cleaners (Appellant in Civil Appeal No 4702 of 1985) in place of Arts Palace in the same shop. In 1960, a partition took place in the Hindu Undivided Family of Mudatiar brothers, the original lessor and the suit premises fell to the share of Narendranath Mudaliar. M/s. Bhoolchand Chandiram continued in the premises as the tenant with Super Dry Cleaners as the sub-tenant in one shop from 1. 4. 1948. The original lessor (including Narendranath Mudaliar after partition in the HUF of Mudaliar brothers) continued to take rent from the tenant M/s. Bhoolchand Chandiram of the entire premises i. e. two shops and the house adjoining the shops till May, 1974. On 28. 6.

1974, the said Narendranath Mudaliar executed a registered sale deed in favour of respondent No. 1, M/s. Kay Pee Cee Investments, a registered partnership firm comprising of three ladies of one family as partners, for the sale consideration of Rs. 1,40,000. It may be mentioned that in a proceeding for fixation of standard rent between the original lessor and the tenant, monthly rent of Rs. 325 was fixed for the entire premises i. e. two shops and the house and the rent due upto May, 1974 was paid by the tenant to the original lessor. After execution of the said sale deed in favour of respondent No. L the tenant attorned in favour of respondent No. 1 and paid rent for the entire premises @ Rs. 325 per month to respondent No. I. The suit premises comprises of Shop. Nos. 44 and 45 (New Nos. & 2) in commercial Street, Bangalore Cant!. and House No. 250 (New No. 22 Narain Pillai Street Cross). Admittedly, the premises are ' in a prestigious commercial locality of the city of Bangalore.

Respondent No. 1 landlord claims that the entire suit premises is reasonably and bona fide required by the landlord for its own business as agents of various textile mills for the purpose of opening a showroom for which it was purchased. It is also alleged that one of the shops was unlawfully sublet w. e. f. 1. 4. 1948 giving rise to the other ground of sub-letting also for eviction. The respondent No. l gave a notice on 31. 7. 1975 terminating the appellant-tenant's tenancy. Thereafter on 5. 9. 1975 a petition was filed by respondent No. I for eviction of the appellant on the grounds of sub-letting and bona fide need of the landlord under clauses (f) & (h) of the proviso to sub-section I of Section 21 of the Karnataka Rent Control Act, 1961. As earlier stated, the Trial Court dismissed the application, but the High Court has set aside that order and passed a decree for eviction on both the grounds.

· The ground of sub-letting is to be decided on the above undisputed facts· on the basis of legality of the ·act of sub-letting on 1. 4. 1948 in these circumstances. The ground of bona fide need of the landlord is to be decided on the basis of the evidence led which is entirely oral from both the sides with reference to the infirmity, if any, in the High Court's finding permitting ·interference therewith in these appeals. Dr. Y. S. Chitale, learned counsel appearing for the appellant-tenant assailed the High Court's findings on both these questions. Shri S. Ghosh, learned counsel appearing for the sub-tenant adopted the arguments of Dr. Cb. itale. Shri Chidambaram, learned counsel appearing on behalf of the respondent No. I landlord has urged that there is no infirmity in the High Court's decision on both the questions to permit any interference in these appeals.

We shall first take up the question relating to the landlord's r reasonable and bona fide requirement which is a ground for eviction under clause {h) of th. e proviso to sub-section 1 of Section 21 of the Act. It may be recalled that the Trial Court had negatived the existence of this ground while the High Court reversing that conclusion has held it to be proved. The question before us is whether there is any infirmity in the High Court's reversal of this finding justifying interference in these appeals. Against the decision of the Trial Court, the provision made in Section 50 of the Act is of a revision and not an appeal to the High Court. However, the power of revision is not narrow as in s. 115 CPC but wider requiring the High Court to examine the impugned order 'for the ·purpose of satisfying itself as to the legality or correctness of such order or proceeding' which enables the High Court to 'pass such order in reference thereto as_it thinks fit'.

It is dear that the High Court in a revision under Section 50 of the Act is required to satisfy itself not only as to the legality of the impugned order or proceeding but also of its correctness. The power of the High Court, therefore, extends to correcting not merely errors of law but also errors of fact. In other words, the High Court in a revision under Section SO of the Act is required to examine the correctness of not onJy findings on questions of law but also on questions of fact. It is significant that the revision provided is directly against the Trial Court's order and not after a provision of appeal on facts. All the same; the power in revision u·nder Section 50 of the Act cannot be equated with the power of the.

Appellate Court under Section 107(2) of the Code of Civil Procedure which is the same as that of the original court; and the revisional power under Section 50 of the Act even though wide as indicated, must fall short of the Appellate Court's power of interference with a finding of fact where the finding of fact depends on the credibility of witnesses, there being a conflict of oral evidence of the parties. It has, therefore, to be seen whether the High Court in the present case while reversing the Trial Court's finding on the question of landlord's Tf'. :asonable and bone fide requirement of the suit premises exceeded its jurisdiction. Admittedly, the only evidenc led by the landlord for this purpose is oral comprising of the testimony of PW. I Dinesh, the Power of Attorney holder of the landlord and son of one of the three ladies who were partners of that firm. The evidencee in rebuttal is also oral comprising essentially of denial of the plaintiffs requirement.

The credibility of the oral evidence adduced by the parties has to , be assssed in the background of certain undisputed facts and circumstances. It is undisputed that the respondent No. l firm comprising of three partners, all women, belonging to a family of businessmen having textile _business also was constituted in 1958 and the firm was registered in 1961; the power of attorney was given to PW 1 Dinesh, son of one of the partners, on 4. 9. 1970; the suit premises was purchased by the respondent No. 1 firm in 1974; respondent No. I firm has its business in one room on the third floor in a rented premises in Bangalore and it does not have any other premises for this purpose; and PW: I Dinesh is looking after the entire business of the respondent No. 1 firm as a duly constituted attorney. RW. 1 Thakurdas Bhoolchand, proprietor of M/s. Bhoolchand Chandiram also admitted that the children of the ladies who were partners of the respondent No.

I firm are carrying on the business and that business is being carried on in a premise at Sakalji Market, Avenue Raod, Bangalore which according to respondent No. I is a rented accommodation. RW. I has merely denied knowledge of the premises being taken on rent by respondent No. I. The question, therefore, is whether on these undisputed facts and circumstances the Jandlord·s reasonable and bona fide need has been proved. The Trial Court in deciding against the landlord was influenced considerably by the fact that in support of the landlord's case 'no piece of documentary evidence is produced'. The Trial Court accepted that the family of the respondent No. I carries· on textile business but held it not proved that partition in the family has taken place to give rise to the requirement of respondent No. I firm for the suit premises when the joint family owns other premises in Bangalore. According to the Trial Court, the respondent No.

I firm is not a separate entity detached from the family. The Trial Court was obviously in error in being influenced by the absence of any documentary evidence to support the need set up by respondent No. I. There is no finding recorded by the Trial Court of the existence of any document which was material for deciding the question and it being in possession of the respondent No. I had not been produced at the trial. In the absence of any such finding, the effect of non-production of any documentary evidence being put in scales against the landlord resulted in an infirmity permitting the High Court to examine the correctness of the finding even when it was based on the credibility of the oral evidence adduced by the parties. Similarly, the suit premises belonging, admittedly, to the three ladies who were partners of the respondent No.

I firm and to no other member of the family to which those ladies belonged, the premises, if any, belonging to other members of the family could not be taken into account for assessing the reasonable and bona fide need of the business of respondent No. I firm. Since the three ladies constituting the respondent No. I firm come from a family having textile business and for the purpose of the suit premises, they being distinct fron1 other members of the family with their separate business in rented accommodation in the same city, the Trial Court's finding was vitiated by another infirmity when it failed to examine the need set up by respondent No. I firm in the correct perspective. The High Court was, therefore, justified in re-examining the correctness of the finding on this question correcting both these errors which had vitiated the Trial Court's finding.

These infirmities in the Trial Court's finding clearly show that the weight of the Trial Court's finding of fact in the present case was considerably reduced and the High Court in a revisio. n under Section 50 of the Act was empowered to examine the cor- [1990] Supp. 2 S. C. R. rectness of this finding after eliminating both the infirmities. It is obvious that the partners of the respondent No. 1 firm belonging to a family already having large textile business would not purchase the suit premises in a prestigious commercial locality at Bangalore merely for earning the monthly rent of Rs. 325 after invest· ing the amount of. Rs. 1,40,000 in 1974 to acquire the business premises. This factor indicating the greater probability also has to be put in scales while assessing the landlord's bona fide reqμirement set up in the present case.

Viewed in this manner, the High Court's finding on this question based on the oral evidence adduced by the parties in the background of undisputed facts and circumstances of the case reaching the conclusion that the landlord's reasonable and bona fide requirement of the suit premises for its own occupation is proved does not suffer from any infirmity which can justify interference therewith in these appeals. This alone is sufficient to affirm the decree for eviction passed against the appellants in these appeals. We shall now consider the other question relating to sub-letting which is a ground for eviction specified in clause (f) of the proviso to sub-section 1 of Section 21 of the Act. The basic point for decision is whether the sub-letting made by M/s. Bhoolchand Chandiram to M/s . . Super Dry Cleaners of one shop which is a part of the suit premises w. e. f. 1. 4. 1948 was unlawful ·being contrary to any provision of law then in force.

Considerable argument was advanced from both sides relating to the law then in force. We may here indicate that existence of the ground of sub-letting loses much of its significance on our above conclusion that the landlord's reasonable and bona fide need was rightly held proved by the High Court with the consequence that the decree for eviction can be sustained on that ground alone. The ground of sub-letting, however, remains of practical significance only for the purpose of applicability of sub-section 4 of Section 21 of the Act since that would be attracted only if the ground of sub-letting also found proved by the High Court, is not upheld herein. If, however, this ground also is upheld, then the decree being passed even on this ground, the further question of greater hardship to the landlord or the tenant under Section 21(4) of the Act would not arise. It is for this reason that we consider it necessary to examine the question of subletting.

The main controversy between the two sides on the ground of sub-letting is whether a written consent of the landloTd for sub-letting was necessary on 1. 4. 1948 when the sub-letting was made and, if so, f was there such a written consent giyen by the landlord? The written ·' consent of the landlord on which reliance is placed by the tenant as well as the sub-tenant, the appellants in these appeals, is that contained in the above quoted letter datd 4. 10. 1943 of the original lessor. Unless the written consent of the landlord contained in the above letter dated 4. 10. 1943 can be held to be subsisting on 1. 4. 1948 when the sub-letting was made in favour of M/s. Super Dry Cleaners, there would, admittedly, be no written consent of the landlord to this subletting. There is no controversy in this respect. The first point for consideration, therefore, is whether the written consent of the landlord contained in the above quoted letter dated 4. 10.

1943 can be treated as subsisting and available on 1. 4. 1948 when the subletting in question was, in fact, made. There is no case set up by the tenant and sub-tenant of any implied consent of the original ' lessor or waiver of the ground of sub-letting and, therefore, that question does not arise for consideration. The written consent of the landlord for sub-letting on 1. 4. 1948 according to learned counsel for the appellants is to be found in the letter dated 4. 10. 1943 of the original lessor. The consent of the landlord for sub-letting is a question of fact. Such consent is an act of volition of the landlord and is not to be inferred from any statutory provision. The effect of . the statute comes in, if at all, only for the purpose of ascertaining whether the landlord's consent can be treated as subsisting after lapse of the period for which it was expressly given.

There being no compulsion on the landlord to give such consent it cannot ordinarily extend beyond the period for which alone it was expressly given. Admittedly, the consent which was given by the origi- . nal lessor in the present case is to be found only in the s~id letter dated 4. 10. 1943. We must, therefore, see the consent given therein. The aforesaid letter dated 4. 10. 1943 of the original lessor confirming the creation of the tenancy with effect from 4. 10. 1943 stated that two shops were let out on a monthly rent of Rs. 430 for two years with the option cif sub-letting one of the shops; and the house adjoining the shops was let out on a monthly rent ·of Rs. 50 for eleven months with the option of sub-letting the house also. There is no dispute that subsequently in a proceeding for fixation of the standard rent, the entire premises comprising of the two shops and the houses, was treate. d as one premises and the monthly rent of Rs.

325 was fixed for the entire premises and this is how the tenancy was treated by both sides as one tenancy instead of two separate tenancies appearing in the . J