Supreme Court of India
P. Orr And Sons (P) Ltd vs Associated Publishers (Madras) ... on 9 November, 1990
Equivalent citations: 1990 SCR, SUPL. (2) 615 1991 SCC (1) 301, AIRONLINE 1990 SC 56, 1991 (1) SCC 301, 1991 HRR 45, (1990) 2 REN CR 648, (1991) 1 RENT LR 64, (1990) 2 MAD LJ 12, (1990) 2 MAD LW 547, (1990) 4 JT 374, (1991) 2 REN CJ 97, (1991) 1 APLJ 67, (1990) 4 JT 374 (SC)
PETITIONER:
P. ORR AND SONS (P) LTD.
Vs.
RESPONDENT:
ASSOCIATED PUBLISHERS (MADRAS) LIMITED
DATE OF JUDGMENT09/11/1990
BENCH:
THOMMEN, T.K. (J)
BENCH:
THOMMEN, T.K. (J)
SAIKIA, K.N. (J)
KASLIWAL, N.M. (J)
CITATION:
1990 SCR Supl. (2) 615 1991 SCC (1) 301
JT 1990 (4) 374 1990 SCALE (2)960
ACT:
Rent Control and Eviction--Tamil Nadu Buildings (Lease
and Rent Control) Act, 1960: Sections 10 and 14(1)(b) bona
fide requirement and bona fide personal requirement demoli-
tion and reconstruction of building--Condition of
building--Prime factor--Deterioration to crumbling
state--Whether necessary--Absence of need for urgency by
reason of sound condition of building--Whether negative bona
fide character of the requirement for demolition.
Judicial Review: Findings of competent authority--When
open to Court's interference--Appreciation of evidence and
findings of facts--Authority empowered by statute--Final
judge of facts--Court not to sit judgment thereon.
Words & Phrases: 'Immediate'--'Immediate Purpose'-Mean-
ing of.
HEADNOTE:
The respondent-landlord filed a petition before the Rent
Controller for eviction of the appellant-tenant under sec-
tion 14(1)(b) of the Tamil Nadu Buildings (Lease and Rent
Control) Act, 1960 on the ground that the condition of the
building compelled immediate demolition and that the land-
lord wanted to put the property to the best possible use.
The appellant-tenant denied the allegations and contended
that the building was structurally safe, and that the stand
taken by the respondent-landlord in the earlier proceedings
under the Act falsified its claim. On the basis of evidence
on record, the Rent Controller found that the building was
structurally safe and sound. However, he held that the
condition of the building as such was not decisive in decid-
ing the question of bona fide requirement of the landlord
under section 14(1)(b) of the Act. Accordingly, he passed an
order of eviction. The tenant preferred an appeal. The
appellate authority concurred with the Rent Controller and
confirmed the order of eviction.
Aggrieved, the tenant approached the High Court. Con-
firming the findings of the authorities, the High Court held
that though the
616
building was structurally sound, it was required by the
landlord for a legitimate scheme of demolition and recon-
struction with a view to putting the property, to more
profitable and better use.
Against the High Court's order, the tenant has preferred
the present appeal, by special leave, contending that the
respondent-landlord has sought eviction of the appellant
solely in terms of section 14(1)(b) of the Act, which relate
to the condition of the building compelling immediate demo-
lition and since the condition of the building was not as
such, the eviction could not have been ordered.
On behalf of the respondent-landlord it was contended
that section 14(1)(b) of the Act referred to bona fide
requirement of the landlord for demolition and reconstruc-
tion. It was also contended that due to various factors, if
it became uneconomical to allow the old building to stand,
notwithstanding its sound and safe condition, and a much
larger profit could be derived from the larger reconstructed
building, a prudent landlord would be perfectly justified in
seeking eviction of the tenant under section 14(1)(b) of the
Act.
Allowing the appeal, this Court,
HELD: 1.1 Section 14(1)(b) of the Tamil Nadu Buildings
(Lease and Rent Control) Act, 1960 is satisfied only if the
building is bona fide required by the landlord for the
"immediate", i.e., direct, sole and timely purpose of demol-
ishing it with a view to erecting a new building on the site
of the existing building. Various circumstances such as the
capacity of the landlord, the size of existing building, the
demand for additional space, the condition of the place, the
economic advantage and other factors justifying investment
of capital on reconstruction may be taken into account by
the concerned authority in considering an application for
recovery; but the essential and overriding consideration
which, in the general interests of the public and for the
protection of the tenants from unreasonable eviction, the
legislature has in mind the condition of the building that
demands timely demolition by reason of the extent of damage
to its structure, making it uneconomical or unsafe to under-
take repairs. While the condition of the building by itself
may not necessarily establish the bona fide requirement
under clause (b), that condition is not only one of the
various' circumstances which may be taken into account by
the Rent Controller but it is the essential condition. The
Act does not accept the requirement by the landlord as a
bona fide requirement within the meaning of the provision
unless the condition of the building, in the context of the
relevant circumstances,
617
requires demolition. These are matters which are to be
proved by evidence. [635H; 636A-D]
1.2 In order to satisfy the test under section 14(1)(b)
the condition of the building need not have deteriorated to
the extent of the building being in danger of crumbling
down, but the condition mast be such as to indicate a bona
fide requirement for the timely, genuine and direct purpose
of demolition and reconstruction. The personal requirement
of the landlord or any member of his family for residence or
business is not germane to section 14, and to import that
concept for the construction of that section, as the High
Court appears to have done, is to project section 10 into
section 14, and that is an exercise which has no warrant in
the law. [636E-F]
Metalware & Co. etc. v. Bansilal Sarma & Co. etc.,
[1979] 3 SCC 398; Neta Ram v. Jiwan Lal, [1962] Suppl. 2 SCR
623 relied on.
Mehsin Bhai v. Hale & Company G.T., Madras, [1964] 2 MLJ
147; K. Ramachandra Rao v. Krishnaswami lyengar and Ors.,
[1976] 1 MLJ 267; K.P. Lonaopan and Sons v.S. Mohamed lqbal,
[1981] 1 MLJ 386 approved.
R.P. David and Anr. v. N. Denial and Ors., [1967] 1 MLJ
110; V.P. Selvaraj v. V. Narasimhe Rao, [1969] 1 MLJ 587;
Bharat Trading Company v. K. Shanmughasundaram, [1982] 1 MLJ
94; Manakayal' Ammal & Ors. v. V.S. Sundaram and Ors.,
[1984] 1 MLJ 310; A.S. Sheikh Fathma and Ors. v. Omer Cloth
State and Ors., AIR 1986 Madras 90 overruled.
Panchamal Narayan Shenoy v. Basthi Venkatesha Shenoy,
[1970] 1 SCC 499 distinguished.
Mahboob Badsha v. M. Manga Devi and Anr., [1965] 2 MLJ
209; K.J Sivalingam v.S. Guruswamy and Anr., [1983] 2 MLJ 85
referred to.
2. In the construction of sections such as 10 and 14 of
the Act, the Court must be guided by the overriding legisla-
tive object articulated in the Preamble to the Act, that
'the control of rents of such buildings and the prevention
of unreasonable eviction of tenants therefrom in the state
of Tamil Nadu." [636H; 637A]
Prabhakaran Nair and Ors. v. State of Tamil Nadu & Ors.,
[1987] 4 SCC 238 relied on.
618
3. Section 14(1)(b), however, does not require instant
demolition, but demolition within the specified time.
"Immediate purpose", in the context in which the expression
appears, relates to directness rather than speed, although
absence of the letter negative the former. It denotes con-
nection and timely action, but not instant action; yet
delayed action is a sign of remoteness of purpose. The
expression must be understood as a directly connected and
timely purpose, and not a secondary or remote or premature
purpose. Significantly, the clause does not say "for the
purpose of immediately demolishing" which words might have
denoted instant demolition. What section 14(1)(b) says is
"immediate purpose of demolishing". The legislative intent
is that the purpose should be immediate or direct and not
mediate or remote or indirect or secondary. The condition of
the building need not be such as to warrant instant demoli-
tion, but it must be grave enough to need timely action and
rule out undue or protracted delay. The landlord is not
expected to wait till the building is in imminent or immedi-
ate danger of crumbling down so as to necessitate recovery
of possession for instant demolition. The purpose of demoli-
tion must of course be immediately or directly connected
with the requirement so as not to be separated by any inter-
vening consideration. Demolition for the purpose of erection
of a new building must be the direct immediate, genuine and
real requirement of the landlord. The bona fide character of
the requirement is proved by the appropriateness of time and
the absence of any ulterior or irrelevant consideration
separating the requirement from the statutory or permitted
purpose. The direct and immediate nexus between these two
element is proved by the condition of the building and other
relevant circumstances. Absence of any need for urgency by
reason of the strong and sound condition of the building
will negative the bona fide character of the requirement.
What is the degree of urgency warranted by what extent of
damage to the building that makes the requirement directly
and immediately connected with the statutory purpose is a
question of fact which must be decided in each case on
evidence. But a building which is sound and safe does not
qualify for demolition in terms of section 14(1)(b). Any
such building fails totally outside its ambit. [627B-H]
Black's Law Dictionary, 5th Edn: Concise Oxford Diction-
ary, New 7th Edn., referred to.
4. The requirement for demolition can be regarded as
genuine and bona fide only when the condition of the exist-
ing building is such that a reasonable and prudent landlord
would regard it to be uneconomical to repair it rather than
demolish it and reconstruct a new building
619
Apart from the condition of the building, the nature of the
locality, the advantages arising from reconstruction the
capacity of the landlord to erect a new building the demand
for accommodation and other factors suggesting the bona fide
character of the landlord's request for recovery of posses-
sion under section 14(1)(b) are relevant. Even where the
condition of the building demands demolition, it is possible
that, in view of the landlord's lack of capacity to rebuild
or the futility of reconstruction by reason of the condition
of the time and place, the authority may regard, without
prejudice to whatever power there is to enforce repairs or
demolition in certain circumstances, that the landlord's
application lacks bona fide. The authority has to take into
account the totality of the circumstances. [628H; 629A-C]
5. The absence of any provision to compel reinduction of
the tenant after reconstruction or to compel reconstruction
after demolition and the non-applicability of the Act for a
period of five years after reconstruction make it imperative
that the reasonableness of the landlord's requirement should
be considered with care and caution, bearing in mind the
fundamental legislative object to protect the tenant from
unreasonable eviction. [628E-F]
6. The over-riding consideration underlying section
14(1)(b) is the bona fide need for demolishing the old
building and erecting a new building, once the demolition of
the old building is completed, for loss of time means not
only loss of income, but probably also increased expendi-
ture. This construction must necessarily lead to the inevi-
table conclusion that the condition of the building is a
basic and essential requirement of section 14(1)(b). [628G-
H]
7. The requisite circumstances warranting repairs under
clause (a) or demolition under clause (b) of section 14(1)
are matters for determination by the competent authority on
the basis of relevant evidence and the applicable provisions
of the law. In proceedings for judicial review, the Court
does not sit in judgment over appreciation of evidence and
finding of facts by the authority empowered by the statute.
He is the final judge of facts, and so long as he has taken
into account all relevant facts and has eschewed from his
mind all irrelevant circumstances and has correctly under-
stood and applied the law. including the rules of natural
justice, his judgment is generally regarded as final and not
open to challenge. On the other hand, where he has acted in
excess of his jurisdiction or asked himself the wrong ques-
tions or misunderstood or misapplied the law or failed to
consider the relevant circumstances, his conclusions are
liable to be reversed as perverse
620
by a court exercising judicial review. Any repository of
power must act in accordance with the law and on the basis
of relevant evidence. He must be guided by reason and jus-
tice and not by private opinion. [629D-F]
8. In the present case the Rent Controller asked himself
the wrong question. He did not think that the condition of
building was relevant. He disregarded the clear admission of
the landlord and other evidence as regards the sound condi-
tion of the building. The crucial condition for demolition
was thus absent. The Controller was totally misguided as to
the conclusions which he reached. So were the appellate
authority and the High Court. [636F-G]
JUDGMENT:
