Madras High Court
K.V. Jaisingh vs C.R. Govindaswami Chettiar (Died) And ... on 21 January, 1995
Equivalent citations: (1995)1MLJ540, 1995 A I H C 3945
Author: Ar. Lakshmanan
Bench: Ar. Lakshmanan
JUDGMENT AR. Lakshmanan, J.
1. O.S. No. 885 of 1984 was filed by respondents 1 and 2/ plaintiffs against the appellant/1st defendant and the 3rd respondent/2nd defendant for recovery of vacant possession of the property more fully described in Schedules A and B to the plaint and known as National Talkies, West Mambalam, Madras-33, and to direct the appellant/ 1st defendant to pay respondents 1 to 3/ plaintiffs and the 2nd defendant damages for use and occupation at the rate of Rs. 10,000 per month from 1.1.1984 upto the date of plaint and also future damages at the same rate from the date of plaint till the date of delivery of possession and for costs.
2. O.S. No. 9075 of 1983 was filed by the 1st defendant in O.S. No. 885 of 1984 against the plaintiffs and the 2nd defendant in O.S. No. 885 of 1984 and also against the Commissioner of Police, Egmore, Madras-8, for a permanent injunction restraining defendants 1 to 3 therein from interfering with the quiet and peaceful possession of the suit property and running the National Talkies and further directing the 4th defendant/Commissioner of Police not to act upon the letter dated 22.8.1983 sent on behalf of the 1st defendant by his lawyer and for costs.
3. During the pendency of the appeals, the 1st respondent C.R. Govindaswami Chettiar died and respondents 4 to 6 were brought on record as the legal representatives of the 1st respondent as per order in C.M.P. No. 11647 of 1992 dated 18.12.1992.
4. The subject matter of both the suits is one and the same. The suit property is originally known as Kothandarama Theatre and now known as National Talkies, West Mambalam, Madras-33. The land on which the cinema theatre was constructed was purchased by C.V. Rajagopala Chettiar from one S. Nataraja Mudaliar under a deed of sale dated 11.3.1940. The said C.V. Rajagopala Chettiar constructed a theatre thereon known as Kothandarama Theatre and has been in possession and enjoyment thereof by leasing out the same to others for running a talkie and cinema exhibition thereon and has been deriving rent therefrom utilising the same for his own purpose.
5. A family settlement deed dated 22.6.1948 was executed by the said C.V. Rajagopala Chettiar in favour of his three sons viz., the plaintiffs and the 2nd defendant, who shall take the property during their life time and enjoy the net income therefrom in equal shares without any right to alienate by lease of the premises. After the death of the said C.V.Rajagopala Chettiar, the property was inherited by the plaintiffs and the 2nd defendant, who are the owners of the suit property, which is a running theatre with buildings, fittings, fixtures, furnitures, etc., as shown in plaint Schedules A and B. The settlement deed provides that the eldest son of C.V.Rajagopala Chettiar shall be the Managing Trustee and manage the theatre for and on behalf of the other settlees. The plaintiffs and the 2nd defendant are thus entitled to the theatre buildings, machinery, furniture, equipments etc., The 1st defendant became a tenant of the suit property, under the plaintiffs and the 2nd defendant as evidenced by the registered lease deed Ex. A-1 dated 30.12.1970. The lease, according to the plaintiffs, is a composite lease and does not fall within the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, as amended by Act 23 of 1973 (hereinafter referred to as the Act).
6. The plaintiffs would submit that the property was leased out as a running theatre with equipments, machinery, fittings, furnitures, etc., and as a composite lease. The lease was for a period of 13 years commencing from 1.1.1971. The same has expired by efflux of time by the month ending 31.12.1983. The rent fixed under the lease deed was Rs. 750 per month for the period from 1.1.1971 to 30.11.1973 at Rs. 1,250 per month from 1.12.1973 to 31.12.1978 and at Rs. 1,400 per month from 1.1.1979 to 31.12.1983. The lease of the building and the hire charges for furniture, fittings, equipments, etc., are co-existence.
7. The 1st plaintiff, in his capacity as the Manager and Trustee, issued a lawyer's notice dated 22.8.1983 determining the tenancy by the month ending 31.12.1983. The 1st defendant sent a reply dated 28.9.1983 containing false allegations. He has not vacated and handed over vacant possession of the leased property even though the lease has expired by the month ending 31.12.1983. Under Clause (xii) of the lease deed, the 1st defendant shall not apply and obtain any licence for the purpose of exhibition of films for the period which will endure beyond the period of lease since the 1st defendant has absolutely no manner of right to exhibit any film after 31.12.1983. The 1st defendant is realising a weekly hire of Rs. 6,000 from the suit property which works out to Rs. 24,000 per month. After the expiry of the lease on 31.12.1983, the 1st defendant is bound to deliver vacant possession of the property. He has no legal right to squat on the property. Since the 1st defendant is unjustly enriching himself by squatting on the suit property and is getting a monthly income of Rs. 24,000, he is bound to pay damages for use and occupation at the rate of Rs. 24,000 per month from 1.1.1984. The plaintiffs, however, restrict the claim for damages for use and occupation at the rate of Rs. 10,000 per month since, according to them, if the theatre is let out as on 1.1.1984 to any third party, it would fetch a monthly rental of not less than Rs. 10,000 per month. The lease being a composite lease, the plaintiffs are entitled to file the suit in the Court below and only the trial court has got jurisdiction to entertain the suit. Since the 2nd defendant, who is also entitled to a share in the right to collect rents is not inclined to join the plaintiffs and is colluding with the 1st defendant, he is made as 2nd defendant in the suit to have an effective adjudication and to avoid any technical objection at a later stage.
8. The 1st defendant/ appellant filed a written statement. He denied the allegation that the lease deed dated 30.12.1970 is a composite lease and that the property was leased out as a running theatre. According to him, the lease is not a composite lease and that the property was not leased out as a running theatre. The lease is governed by the provisions of the Act and therefore, the suit is not maintainable. The lease is not one of the land and building together with furnitures, fittings, equipments, machineries, etc. It is not a lease under which the object of the tenant was to run the business with the fixtures, machineries, furnitures, etc., belonging to the landlord. It is the lessee who remodelled and effected permanent improvements to satisfy the requirements of the Cinematograph Act and Rules. The object of the lease was to run the business with his own equipments and articles which are necessary for running the business such as projector, generator, electrical fittings, sound system, seats etc.
9. The 1st defendant would further aver that originally the property was leased out to one T.M. Pattu Chettiar and then to one Kasi Sha. They were running the business with their own machinery. In 1952 the building was leased out to one K. Viswanath Singh, the father of the 1st defendant. The suit property was never leased out as a running theatre. At no point of time C.V.Rajagopala Chettiar and his sons had licence in their names for screening picture and they never provided the building with the basic machineries and equipments such as motor, generator, projector, rectifier, converter, transformer, etc. The equipments and furnitures belong to the 1st defendant and his father. The lease deed dated 30.12.1970 was preceded by a number of leases. The first lease deed was dated 20.8.1952. It was for land and building got by the plaintiffs and the 2nd defendant under the settlement deed dated 2.9.1948. On the same date, a hire agreement was entered into between the parties. The 1st defendant entered into an agreement dated 3.5.1973 with the 2nd defendant. The 1st defendant is an assignee of the 2nd defendant of the right to his one third share in the income derived from the lease under registered deed of assignment dated 21.11.1983. He has, therefore, become a co-owner with the plaintiffs as regards the one third share of the rent under the lease. The prohibition against alienation by the 2nd defendant in the settlement deed is repugnant to the right created by settlement deed and is void for repugnancy. The estimate of a weekly income of Rs. 6,000 and Rs. 24,000 per month is wholly exaggerated. The 1st defendant is not getting a monthly rent of Rs. 10,000 as alleged. The net income on account of the lease of the building will not exceed Rs. 3,000 per month. The provisions of the Act apply to this case and the 1st defendant is entitled to be in possession and enjoyment thereof as such tenant.
10. The 2nd defendant filed a separate written statement supporting the 1st defendant. Accordingly to him, the lease in question is not a composite lease. It was a lease of the building only and not of the running business. The furnitures, fittings, etc., were furnished by the lessee only. The present suit has been filed by the plaintiffs without consulting him as is required by the agreement dated 3.5.1973 executed between the plaintiffs and the 2nd defendant.
11. The plaintiffs filed a reply statement denying the averments contained in the written statements filed by the defendants and reiterating the allegations made in the plaint. According to the plaintiffs, the terms of the lease have been reduced into writing and the lease contains the schedule. Therefore, the defendants cannot be allowed to plead anything contrary to the written document in view of Sections 91 and 92 of the Evidence Act. It is further stated that simply because the 1st defendant has provided some projector and some other electrical equipments for his convenience, that cannot in any way affect the already existing composite lease. It is also further stated that the 2nd defendant has no legal right to assign any rights under the alleged assignment dated 21.11.1983.
12. The trial court framed the following issues for trial:
1. Whether the suit lease is a composite lease?
2. Whether this Court has got jurisdiction to entertain the suit?
3. Whether the plaintiffs are entitled to obtain vacant possession?
4. Whether the suit is maintainable according to law?
5. Whether the plaintiffs are entitled to compensation for damages and if so, how much?
6. To what relief?
13. The 1st defendant in O.S. No. 884 of 1985 has filed O.S. No. 9075 of 1983 for permanent injunction restraining defendants 1 to 3 therein from interfering with the peaceful possession of the property viz., National Talkies, 96, Lake View Road, West Mambalam, Madras-33, and also not to act upon the letter dated 22.8.1983 sent on behalf of the 1st defendant by his lawyer to the Commissioner of Police/4th defendant in that suit. According to the 1st defendant/ plaintiff in the other suit, he is a statutory tenant and his possession should not be interfered or disturbed in any unlawful manner. Since defendants 1 to 3 in that suit are attempting to interfere with the peaceful possession and also running of the theatre by informing the Commissioner of Police not to renew the licence beyond 31.12.1983, the plaintiff/1st defendant was obliged to file the present suit for permanent injunction.
14. The 1st defendant/1st plaintiff in O.S. No. 885 of 1984 filed a detailed written statement controverting all the allegations and also of the maintainablity of the suit either on facts or on law. According to him, the question of renewal of licence from 1.1.1984 does not arise and he is not bound to give any consent letter for the renewal of the licence.
15. The 2nd defendant/2nd plaintiff in O.S. No. 885 of 1984 filed a separate written statement supporting the cause of the plaintiff/Jai Singh. According to him, the plaintiff Jai Singh is in lawful possession of the property.
16. The 3rd defendant/2nd plaintiff in O.S. No. 885 of 1984 adopts the written statement of the 1st defendant as his written statement.
17. On the above pleadings, the trial court framed the following two issues for trial:
1. As prayed for in the injunction suit, does the plaintiff entitled to obtain a permanent injunction?
2. To what relief?
18. Both the suits were tried together. On behalf of the plaintiffs and the defendants, three witnesses were examined on each side. Exs.A-1 to A-35 were marked on the side of the plaintiffs and Exs.B-1 to B-40 were marked on the side of the defendants. The learned trial Judge, on a consideration of the materials placed before him and of the decisions of this Court and of the Supreme Court, decreed O.S. No. 885 of 1984 and directed the 1st defendant to vacate and deliver possession of the suit property and also further directed the 1st defendant to pay damages at the rate of Rs. 10,000 per month from 1.1.1984. The learned trial Judge dismissed the other suit O.S. No. 9075 of 1983. Aggrieved against the judgment and decree of the court below, the 1st defendant in O.S. No. 885 of 1984 has filed A.S. No. 314 of 1985 and the plaintiff in O.S. No. 9075 of 1983 has filed A.S. No. 187 of 1990.
19. We have heard the arguments of Mr. T.R. Rajagopalan, learned Senior Counsel on behalf of the appellant in both the appeals, Mr. T.V. Ramanujam, learned Counsel for the contesting 2nd respondent, Mr. G.S. Selvatharasu for the 3rd respondent and Mr. Venkataseshan for the other respondents.
20. According to Mr. T.R. Rajagopalan, the suit property was not leased out as a running cinema house and that in the absence of projectors, sound equipments, furnitures, etc., supplied or provided by the plaintiffs, the theatre cannot be declared as a running business and the lease as a composite lease. According to Mr. T.V. Ramanujam, the main question to be considered in A.S. No. 314 of 1985 is, whether Ex.A-1 is a composite lease or not and if Ex.A-1 is a composite lease, then it will be exempt from the provisions of the Act as per Section 30(iii). According to him, the term composite lease has not been defined under the Act but it has been interpreted in various decisions of this Court reported in Bombay Burmah Trading Corporation Limited v. A.T. Narayanaswami Pillai 94 L. W. 334, Narayanan v. Natesa Achari (1986) 2 M.L.J. 18 and M. Abdul Hakim v. M.K.M. Abdul Salam . As per the principles laid down in these cases, when the lease is not only of a building but also includes certain fixtures, machineries, furnitures and other articles belonging to the landlord and which are situate in that building and which would aid the tenant in carrying on a particular business for which the tenancy has been entered into, then, the exemption will apply and the lease will be outside the purview of the Act and it is called a composite lease. Mr. T.V. Ramanujam also invited our attention to the various clauses contained in Ex.A-1 lease deed, which, according to him, will prove the case of the plaintiffs that the lease in question is a composite lease. He also refers to Clauses 2(i), (ii), (iv), (v), (ix), (xii) and (xiii) of the lease deed and a perusal of these clauses, according to him, will clearly show that the lease in question is only a composite lease. He further contends that the intention of the parties is the main criteria to be borne in mind in construing the lease of this nature. According to Mr. T.V. Ramanujam, the court has to see the nature of the lease at the time of execution of Ex.A-1 and simply because the lessee put the projector and some furnitures, it would not mean that Ex.A-1 is not a composite lease.
21. The main point, therefore, for consideration is:
Whether the suit property was leased out as a running cinema house and whether the plaintiffs provided the equipments such as projectors, sound equipments, machineries, furnitures, etc., which are essential for running a cinema industry and in the absence of projectors, sound equipments, furnitures, etc., provided by the plaintiffs, can the cinema theatre be declared as a running business and a composite lease?
22. Point: Admittedly, the suit property was constructed in or about 1940 by C.V. Rajagopala Chettiar, the father of the plaintiffs and the 2nd defendant, C.V. Rajagopala Chettiar settled the suit property, in favour of the plaintiffs and the 2nd defendant under Ex.A-8. In Ex.A-8 it is clearly stated that the 1st plaintiff and the 2nd defendant are the owners of the furniture and fittings, which have been set out in the B Schedule in Ex.A-1, the lease deed dated 30.12,1970. It is also not in dispute that the suit theatre was original 1 y leased out to one Pattu Chettiar and thereafter in the year 1951 to one Kasi Sha, and both Pattu Chettiar and Kasi Sha had run the cinema business with some of their own equipments. In the year 1952, the father of the 1st defendant became a lessee. Since 1952, the suit property has been in continuous possession of the 1st defendant and the members of his family. From 1952, the lease of the suit property was periodically renewed and according to the 1st defendant, Ex.A-1 is the continuation of the earlier lease deed and hire agreements.
23. Mr. T.R. Rajagopalan, learned Senior Counsel appearing for the appellant contended that since P.W. 1 in the course of cross-examination has stated that he has not given equipments for the cabin room and had not given machineries for the re-winding room and in view of Ex.B-35, which is the receipt for purchase of a generator by D.W.I, and Ex.B-24, which is 'D' Form licence which stands in the name of the 1st defendant and contains a list of equipments belonging to the 1st defendant, it can be safely concluded that the equipments and machineries in the cabin room, re-winding room and in the generator room belong to the 1st defendant and there is absolutely no evidence to show that the plaintiffs have provided with such equipments and machineries. According to Mr. T.R. Rajagopalan, these equipments and machineries are the basic prerequisites for running a cinema theatre and without these things, films cannot be screened in the A Schedule property. He also invited our attention to Rule 84 of the Madras Cinemas (Regulation) Rules, 1957, which stipulates certain conditions in providing seating accommodation. According to the learned Senior Counsel for the appellant, the evidence of D.W.3 discloses that the furnitures in the auditorium belong to the 1st defendant's mother and these furnitures were in the theatre at the time of execution of Ex.A-1 and that the said evidence has not been challenged. Likewise Ex.B-43 'C' Form licence, discloses that 848 individual seats were provided by the 1st defendant and that it has been proved that the 1st defendant is the owner of the furnitures in the auditorium, which is the essential requisite for running a cinema theatre.
24. Mr. T.R. Rajagopalan cited the decision of a Division Bench of this Court reported in Balaji Cine v. Sakthi Talkies, 88 L.W. 88 at 94. The essential requirements or the equipments for a cinema theatre have been referred to in the said decision.
Though the plaintiff and the 1st appellant entered into two lease deeds, one relating to the building and the other relating to the machinery, the irrefragable intention of the parties was that the building and the machinery should be enjoyed together and that neither party would have even dreamt of the building alone being let out without the machinery and equipment and vice versa the machinery alone being hired without the building being rented.
Thus, it will be seen that for the purpose of running a cinema house, Illustration (2) to Section 30(iii) of the Act is apt and the articles referred to in Illustration (2) must be provided by the landlord to claim exemption under Section 30(iii) of the Act.
25. Mr. T.R. Rajagopalan, requested us to examine in the above background, the lease deed Ex.A-1 dated 30.12.1970 and also to examine whether Ex.A-1 could be called as a composite lease. Schedule 'A' to the lease deed would refer to the ground and premises bearing municipal new Door No. 96, Lake View Road, known as Sri Kothandarama Theatre together with electric wiring, outhouse, cycle stand, tea-shop etc. Schedule 'B' refers to 60 items, which would include the electrical fittings and fixtures, single seat sofa, double seat sofa, back benches, fire buckets, fire extinguishers, exhaust fan, fire buckets wooden stand, stage screen, iron screen frame, speaker table, etc. According to Mr. T.R. Rajagopalan, the movable items listed in B Schedule are not pre-requisites or essential things to screen picture in the suit property. Therefore it is contended that the claim of the plaintiffs that the items referred to in Ex.A-1 along with the land and building would constitute a composite lease is against Section 30(iii) of the Act and also against the principles laid down by some of the decisions of this Court and the Supreme Court in similar cases.
26. It is stated that to carry on the business of exhibiting Cinema, 'C' form licence will have to be obtained from the Commissioner of Police and for obtaining the same, necessary certificates will have to be obtained from the Public Works Department in regard to the structural soundness, and from the Corporation of Madras in regard to sanitary conditions and from the Commercial Tax Office in regard to entertainment tax. According to the 1st defendant, all these certificates have been obtained by him only. Our attention was also drawn to Clause (iv) of Ex. A-1 wherein the lessee was directed to comply with and satisfy the licence conditions and fulfil all obligations and duties arising out of the Government or Municipal authorities in respect of the licences and permits and all rules and regulations especially for conducting cinema theatre or exhibiting any film or shows in the threatre. Placing reliance on the above clause, it is contended that the intention of the lessor was that the lessee should comply with all the formalities required for running a cinema theatre, and that the clause referred to above would only show that the entire responsibility for screening the films in the suit theatre was with the lessee and that what was leased out under Ex.A-1 was not a running business or industry of the lessor but the mere superstructure alone.
27. Our attention was also drawn to Exs.B-1 and B-23 both lease deeds executed by the 1st plaintiff in favour of D. Kasi Sha and Viswanath Singh respectively to show that the clauses mentioned in Ex.B-23 are identical to Ex.B-1. Exs.B-3 to B-8 are all proceedings initiated under the Act by C.V. Rajagopal Chettiar against the tenants in the Rent Control Court. Ex.B-2 dated 21.1.1958 is an application for attachment of the projector and accessories filed by the 1st plaintiff against one Rukmani Bai in S.C. No. 7918 of 1956. Ex.A-5 dated 14.9.1959 is again filed by the 1st plaintiff in O.S. No. 696 of 1958 against Rukmani Bai for recovery of hire charges. That suit was decreed. Ex.A-28 is the pleadings in C.S. No. 88 of 1957 on the file of this Court. That suit was for specific performance by the lessees against the lessors.
28. Ex.B-9 dated 5.11.1961 is the agreement between the lessor and lessee after the filing of the suit C.S. No. 88 of 1957. Exs.B-10 and B-11 dated 21.3.1963 are the judgment and decree in O.S. No. 2521 of 1962 on the file of the City Civil Court, which suit was filed for specific performance to execute a lease deed. That suit was filed by the lessees against the 1st plaintiff and his father. That suit was decreed and lease deed was executed under Ex.B-13. Ex.B-12 dated 11.9.1963 is I.A. No. 16561 of 1963 in O.S. No. 2521 of 1962 for directing the defendants to execute the lease deed and in default, the Court to execute the lease deed. Ex.B-13 dated 29.11.1963 is a lease deed executed by court, pursuant to the decree in O.S. No. 2521 of 1962. Ex.B-26 has been filed to show that the licence fee was paid by the lessee. Exs.B-27, B-28, B-29, B-30 and B-46 are letters sent by the Commissioner of Police and reply by the lessee in compliance of the conditions and the fixation of new furnitures, Ex.B-34 dated 27.12.1966 is the letter by the lessee to the Corporation of Madras for inspection and issue of licence. Ex.B-25 dated 7.7.1967 is the 'C' Form licence granted to the lessee. Ex.B-48 dated 19.8.1968 is the legal notice given by the 2nd defendant to the lessees. H.R.C. No. 4013 of 1968 was filed for eviction of the lessees. Ex.A-1 dated 30.12.1970 is the lease deed executed by the 2nd defendant in favour of Rukmani Bai for 13 years i.e., from 1.1.1971 to 31.12.1983. According to the defendants, Ex.A-1 refers to the filing of H.R.C. No. 4013 of 1968 for eviction.
29. Ex.B-6 dated 31.5.1971 is the receipt given by the 2nd defendant for rent and hire charges. Ex. A-20 dated 8.8.1977 is the lawyer's notice sent by the 1st plaintiff to the lessees demanding arrears of rent. Ex.A-21 dated 20.8.1977 is the reply to Ex.A-20. Ex.B-15 dated 9.5.1979 is the receipt given by the 1st plaintiff for rent and hire charges. Ex.A-2 dated 22.8.1983 is the notice of termination. Ex.A-4 dated 28.9.1983 is the reply to Ex.A-2. Ex.B.-42 dated 21.11.1983 is the assignment deed executed by the 2nd defendant in favour of the 1st defendant for 20 years for a consideration of Rs. 25,000. Mr. T.R. Rajagopalan, learned Senior Counsel appearing for the appellant has taken us through the exhibits referred to above in the same order in which the same has been referred to in this judgment.
30. All the above documents were relied on the by the learned Senior Counsel for the appellant to show that what was leased out under Ex.A-1 was not a running business or industry by the lessor but a mere superstructure alone. Though it is admitted by the defendants that the plaintiffs have provided with a cloth screen with iron frames, however, that version was changed in the cross-examination wherein it is stated that a plastic screen has been provided in the place of the cloth screen. Otherwise, there will be no clarity of the picture. Mr. T.R. Rajagopalan also refers to the evidence of P. Ws. 1 and 2 to point out here and there that the answers given by them will be an indication that except the motor for the well, no other machineries were provided by the plaintiffs in the suit property for screening the picture. He argued that the evidence of P. Ws. 1 and 2 is totally unbelievable since P.W.1 is totally silent about the presence of P.W.2 at the time of execution of Ex.A-1 and P.W.2 is not a signatory to the document or even a witness to the document. Further, there is absolutely no evidence that P.W.2 was present at the time of preparation of Ex.A-1. In contrast, D.W.3 has deposed that P.W.2 was not present at the time of discussion and preparation of Ex.A-1. According to D.W.3, the suit lease is not a composite lease and never intended to be a composite lease.
31. Mr. T.R. Rajagopalan also argued that there is no reference to the word 'composite lease' in Ex.A-1. We are of the view that the word 'composite lease' need not be mentioned in the document and the tenor of the document alone will have to be considered. Mr. T.R. Rajagopalan then invited our attention to the various proceedings in the Small Causes Court for the recovery of hire charges and pursuant to the decree obtained in S.C. No. 7918 of 1956, attachment proceedings were initiated for attachment of the projector and other equipments belonging to the 1st defendant thereby admitting that they belong to the 1st defendant.
32. Apart from Ex.B-2, the recital in Ex.B-9 dated 5.11.1961, wherein the parties have contemplated two different and distinct agreements, one for the land and building and the other for the furniture and fittings that belong to the 1st plaintiff and the 2nd defendant. Mr. T.R. Rajagopalan submitted that it is admitted that from 1952 to 1970 there were two separate documents, one a registered lease deed for the land and building, and the other an unregistered hire agreement for fittings and furnitures, and so far as the fittings and furnitures were concerned, proceedings were initiated against the defendants by way of civil suit and so far as the land and building was concerned, proceedings were initiated against the 1st defendant under the Act.
33. There is no dispute that two separate agreements were entered into between the parties prior to 1970. But, we are concerned in these proceedings only in regard to Ex.A-1 lease deed containing A and B Schedule properties. The plaintiffs contend that it is a composite lease and the defendants contend that it is not. So, this Court is called upon to decide, as already mentioned, whether the suit property was leased out as a running cinema house and whether the plaintiffs provided the equipments such as projector, sound equipments, machineries, furnitures, etc., which are essential for running a cinema industry and in the absence of projectors, sound equipments, furnitures, etc., provided by the plaintiffs, can the cinema theatre be declared as a running business and Ex.A-1 a composite lease.
34. It is stated that even before the expiry of the lease agreement under Ex.B-13, Ex.A-1 dated 30.12.1970 had come into force and that the plaintiffs admitted that in 1970, three years still remained under the prior lease deed Ex.B-13 and the said period was added on to Ex.A-1 and therefore the period of 13 years commencing from 1.1.1971 was mentioned in Ex.A-1. Thus, it is contended that the lease deed Ex.A-1 is only a continuation of the prior lease executed by the Fifth Assistant City Civil Judge, Madras in O.S. No. 2521 of 1962 and that the security deposit of Rs. 20,000 recited in Clause 8 in Ex.A-1 would refer only to the previous lease deed and hire agreement dated 29.11.1963. Thus, Mr. T.R. Rajagopalan says that in effect the transaction under Ex.A-1 is only a continuation of the prior agreement and that the plaintiffs cannot separate the prior transaction and claim relief under Ex.A-1 independent of the prior transaction.
35. Mr. T.R. Rajagopalan then contends that the plaintiffs have not satisfactorily explained as to why a single agreement was entered into in 1970 instead of agreements for rent and hire, which was the practice among the parties. According to him, the only competent person to speak about as to why a single lease deed was entered into instead of two agreements as in the past, is the 2nd defendant, who was the then Managing Trustee and also the author of Ex.A-1. The 2nd defendant was examined as D.W.3 and he said that Ex.A-1 was executed only for the purpose of convenience. In conclusion, Mr. T.R. Rajagopalan, said that the 1st plaintiff having invoked the jurisdiction of the statutory authority under the Act on their own case that the property leased out is governed by the provisions of the Act and concluded by their own admission on the applicability of the Act to the property leased out as controlled property, and the suit is not maintainable.
36. Mr. T.R. Rajagopalan argued that in view of the documentary and oral evidence and in view of the fact that equipments in the cabin room, machineries in the re-winding room, generator in the generator room, etc., belong to the 1st defendant and in view of the fact that the sound equipment and plastic screen in the stage belongs to the 1st defendant, and in view of the further fact that 848 single seats in the auditorium belong to the 1st defendant, it can be safely concluded that what was leased out to the 1st defendant was not a running cinema industry or business to attract Section 30(iii) Illustration (2) of the Act and that the suit property is only land and building and some trivial and minor items of articles, which are not usable for running a cinema industry or business in the suit property. Since the lease is only of the land and building with fixtures and fittings attached to the premises only the Act alone applies and the suit is not maintainable. Further, all the earlier proceedings for eviction of the 1st defendant from the suit property were initiated only under the Act and hence the present suit is not maintainable in the City Civil Court.
37. Mr. T.R. Rajagopalan next contended that the 2nd defendant is entitled to assign his rights under Ex.A-8 to the 1st defendant. Under Ex.B-42 the 2nd defendant has assigned his 1/3rd undivided right in the plaint A Schedule property to the 1st defendant for a consideration of Rs. 25,000 for a period of 20 years. The assignment deed dated 21.11.1983 is registered as Document No. 3973 of 1983 in the office of the Joint Sub Registrar, Madras. The 1st defendant has pleaded that as an assignee of the 2nd defendant, he has become the co-owner of the suit property and as such, the suit is not maintainable, In view of this plea in the written statement, Issue No. 4 has been framed as to whether the suit as framed is maintainable. The 1st plaintiff as P.W.1 in his Chief-examination has stated that the 2nd defendant has no right to assign his 1/3rd life interest in the suit property. D.W.1 in his Chief-examination has stated that the 2nd defendant has assigned his l/3rd share to him under Ex.B-42. The plaintiffs counsel cross-examined D.W. 1 in great length and attacked that Ex.B-42 was not supported by consideration.
38. Mr. T.V. Ramanujam contends that though in Ex.B-42 it was recited that the consideration of Rs. 25,000 would be paid at the time of registration, there is no Registrar's endorsement for payment of Rs. 25,000 before him. D.W.1, however, said that a sum of Rs. 25,000 was paid in the Sub Registrar's Office before the 2nd defendant signed under Ex.B-42. D.W.2, an attesting witness to Ex.B-42, was examined to prove consideration. He was also cross-examined by the plaintiffs counsel. According to Mr. T.R. Rajagopalan, D.W.2 is an independent witness and he has proved passing of consideration under Ex.B-42. According to the plaintiffs, no amount was paid for the assignment. Apart from the evidence of D.Ws. 1 and 2, the author of Ex.B-42 has admitted the receipt of consideration at the time of registration of Ex.B-42. The 2nd defendant as D. W.3 was cross-examined by the plaintiffs counsel with reference to Ex.B-42. The passing of consideration under Ex.B-42 has been proved to the hilt, according to the defendants. In any event, it is contended that the plaintiffs being third parties to the registered document cannot question the passing of consideration and plead that Ex.B-42 is not supported by consideration in the absence of pleadings. We are unable to accept this argument. The plaintiffs are entitled to advance an argument that the 2nd defendant is not entitled to assign his l/3rd undivided right under Ex.A-8 and that the assignment itself is invalid.
39. It is contended by the 1st defendant that the prohibition against alienation by the 2nd defendant in the settlement deed is repugnant to the right created by the settlement deed and is void for repugnancy. It is not competent for the settlor to make any provision which is derogatory of or repugnant to the interest granted in favour of the 2nd defendant under the settlement deed. It is submitted that though according to the general principle, parties are at liberty to make restricted transfers, this liberty is not absolute subject to the qualification that the restrictions sought to be imposed should not be against the public policy. An absolute restraint on such legal incident of property as a power of alienation will tend to create perpetuity and this law is always regarded a great disfavour as opposed to public policy.
40. It is further submitted by Mr. T.R. Rajagopalan that under Ex.A-8 the right has been given to the 2nd defendant to enjoy the A Schedule property during his natural life without any right to alienate. Assignment of right conferred during the life time of the assignor will not amount to an alienation. Even assuming that the assignment is an alienation, it is submitted that the settlee under Ex.A-8 is entitled to alienate the property during his lifetime provided the alienation would be valid only during the life time and cannot endure beyond the life time of the assignor. Therefore, it is submitted that the 2nd defendant being a co-owner along with the plaintiffs, is entitled to transfer his share in such property or any interest therein. Thus, it is submitted that the assignment Ex.B-42 is a valid document and is supported by consideration and that the 2nd defendant is entitled to assign his 1/3rd right under Ex.B-42. As a co-owner, the 1st defendant is entitled to be in possession and enjoy the rights to which the 2nd defendant is entitled to. The plaintiffs contend that Ex.A-8 only confers a right to enjoy the income alone and it does not contemplate the right to remain in possession and Ex.B-42 cannot be used as a shield against an order of eviction. The 2nd defendant as D. W.3 has deposed that as he had to meet out the debts incurred for the marriage of his first daughter and for meeting the expenses for his second daughter, he required funds and hence he was obliged to borrow money from the 1st defendant since the 1st plaintiff as the Managing Trustee refused to help the 2nd defendant when he was in dire need.
41. It is contended on behalf of the plaintiff's that Ex.A-8 being a registered document, no oral evidence could be let in and it should be accepted in toto as a documentary evidence. The same analogy should be extended to Ex.B-42 also. D.W.3, the brother of the plaintiffs is not admittedly in cordial terms with the plaintiffs. He is having a grievance that he has not been given money for his daughter's marriage. Hence, he has joined the 1st defendant and colluded with him. The 2nd defendant as D.W.3 falsely stated that Ex.A-1 is not a composite lease. In our opinion, he cannot be believed and his evidence is interested.
42. Ex.B-42 reads that Rs. 25,000 is to be paid before the Sub Registrar but admittedly not paid before the Sub Registrar. The circumstances under which Ex.B-42 has come into existence are not mentioned in the plaint in O.S. No. 9075 of 1983. The 2nd defendant in O.S. No. 885 of 1984 has been made as a party viz., 2nd defendant in O.S. No. 9075 of 1983. The 2nd defendant has also given all the documents to the 1st defendant for the purpose of using them in this case viz., Exs.B-1 to B-13. The 2nd defendant's explanation that he gave them to the mother of the 1st defendant at the time of Ex.A-1 is only an afterthought and not spoken to by the 1st defendant as D.W.1. D.W.1 says that they were in a box in a bundle. It is the case of the plaintiffs that there is a clear collusion between the 1st defendant and the 2nd defendant.
43. The 2nd defendant as D.W.3 states that he has received Rs. 25,000. There are no stakes involved for him. He wants to support the 1st defendant somehow or other. As rightly pointed out by Mr. T.V. Ramanujam, the 2nd defendant is a pawn in the hands of the 1st defendant. At the time of cross-examination the 1st defendant has been exposed for having filed documents which should be in the custody of the 2nd defendant. Even the office copy of the Execution petition Ex.B-2 is filed by the 1st defendant. It is, therefore, highly unbelievable that the 1st defendant's mother would have asked for that document. The 2nd defendant has given it without consulting the plaintiffs. The 2nd defendant has no right to give away the documents to third parties. He has not even made a demand for the return of those documents at least after the death of the 1st defendant's mother. He has not even informed the 1st plaintiff while handing over charge. After the cross-examination of the 1st defendant, realising that it has been exposed that the 2nd defendant has given the documents to the 1st defendant, a notice to produce documents Exs.B-46 to B-48 was sent. Even that notice has not been filed. The 1st defendant is not claiming any ownership in the theatre but he only claims tenancy rights. Hence, we are of the view, that Ex.B-42 is not relevant for the purpose of this case and we, therefore, refrain ourselves from giving any finding in regard to the validity of Ex.B-42 in these proceedings. As could be seen, in Ex.A-8, the plaintiffs and the 2nd defendant have no right to assign and that the 2nd defendant has no legal right to execute Ex.B-42. However, this point is left open to be agitated by the parties concerned before the proper forum at the appropriate stage.
44. In our view, D.Ws. 1 and 3 are not speaking the truth. D.W.2 is only a chance witness and a close friend of D.W.I. His evidence also cannot be believed. Even regarding the valuation of the theatre, D. W. 1 does not want to admit the truth. He does not give direct answers. D.W.I produced documents which have been created for the purpose of this case. Admittedly, all the earlier leases have been cancelled and what was in force was Ex.A-1 and even that has expired by efflux of time by 31.12.1983. D.W.1 says that the furnitures are there in the theatre but he has put single seats and has removed the earlier furnitures given by the lessors, and has kept them outside. Thus it is admitted that the lessors have given furnitures. In any event, admittedly the furniture is already there which will be sufficient to run the theatre with some slight alterations. No one can get 'C' Form licence if the theatre is not in conformity with the provisions of the Cinematograph Act. The theatre is now admittedly having 'C' Form licence. So, even if the lessee removes the projector, another one can be put and the theatre will continue to run. Thus, the lease is only a composite lease.
45. Now, let us consider the prime question raised by the parties in this case viz., whether the suit agreement/lease deed is a composite lease or not. Ex.A-1 is dated 30.12.1970 entered into between the 2nd defendant and Rukmani Bai, wife of K. Viswanath Singh. The lease deed refers to the building, furniture, electrical fittings, etc., as set out in the schedule to Ex.A-1 and known as Sri Kothandarama Theatre. It also refers to the Deed of Settlement executed by C.V. Rajagopal Chetty in the Office of the Sub-Registrar, Saidapet, Madras-15. whereby he has settled the theatre on his sons/plaintiffs and the 2nd defendant, to be enjoyed by them for their life time and to be taken thereafter by their male children absolutely. It is seen from Ex .A-1, that C.V. Rajagopal Chetty first appointed the 1st plaintiff as Manager and Trustee and later on, subsequent to the suit in O.S. No. 1849 of 1964 on the file of the City Civil Court, Madras, for rendition of accounts and for removal of the 1st plaintiff from the office of the Trustee and Manager the lessor/2nd defendant was appointed as Trustee and Manager in the place of the 1st plaintiff. It is mentioned that the theatre was originally leased out to one Rukmani Bai, the lessee under Ex.A-1, and her husband K. Viswanath Singh under a registered lease deed dated 29.11.1963 for a period of ten years pursuant to the decree in O.S. No. 2521 of 1962 on the file of the City Civil Court, Madras, for specific performance. The said lease expired on 30.11.1973. The lessor/2nd defendant in the meanwhile filed H.R.C. No. 4013 of 1968 on the file of the Court of Small Causes, Madras against Rukmani Bai and Viswanath Singh for arrears of rent. Pending that petition, Viswanath Singh died on 10.2.1970 and his son Jai Singh/1st defendant and others were brought on record as legal representatives in addition to Rukmani Bai, who is already on record. The parties have entered into a compromise where it was agreed that the lease deed dated 29.11.1963 shall stand cancelled on the expiry on 31.12.1970 and that the lessor/2nd defendant should execute and register these presents creating a lease of the demised premises for a period of 13 years commencing from 1.1.1971. These are the preambles to Ex.A-1.
46. Let us now consider the terms and clauses mentioned in Ex.A-1. As per Clause 1, the lease is in respect of the building, furniture, electrical fittings set out in Schedules A and B thereunder and known as Sri Kothandarama Theatre for a period of 13 years. The lessee agreed, as per Clause 2, to pay a sum of Rs. 750 per month for a period of two years and eleven months from 1.1.1971 to 30.11.1973 and thereafter at Rs. 1,250 per month for a period of five years commencing from 1.12.1973 to 31.12.1978 and at Rs. 1,400 per month for the period commencing from 1.1.1979 upto 31.12.1983. Clause 2 further reads as follows:
The lessee shall pay the above amounts which shall be appropriated towards the rent for building and hire charges for furniture, fittings and equipments. The lease of the building and hire charges for furniture and fittings are co-existence.
Clause 4 enumerates the obligations and duties of the lessee arising out of the Government or Municipal or Police licences and permits and all rules and regulations incidental thereto for conducting the cinema theatre or exhibiting any film, picture and other shows therein and at their (lessees) own expenses apply for and do all necessary acts, deeds and things for obtaining and renewing all licences requisite for running a cinema on the demised premises during the term. The said clause further provides that the lessee may provide a permanent addition to the theatre, which shall also be done by the lessee at his cost. The lessee shall pay the electricity charges, meter rent, etc., taxes like Professional Tax for the business and also licence fee for the running of cinema theatre. Clause 2(vii) prohibits the lessee not to assign, sub-let or part with possession of the demised premises either wholly or in part provided that the hiring out of the demised premises for exhibiting films on rental basis under the direct supervision and maintenance of the lessee, which shall not be treated as a breach of this covenant. Clause 2(x) is very relevant for the purpose of deciding the nature of lease in this case, which reads thus:
The lessee shall herself bear and pay all the charges, fees, in respect of any licences taken out or required for running the theatre as a going concern and for exhibiting any films, pictures or other shows therein.
Clause 2(xi) provides that the lessee shall, on the expiry of the case, terminate by appropriate notice the services of all staff employed by them in the business of the theatre and pay them all dues by way of bonus, gratuity, provident fund and any other benefits due to them. Clause 2(xii) says that the lessee shall not apply for and obtain any licence for the purpose of exhibition of films beyond the period of lease. In Schedule A it is mentioned that the ground and premises bearing Municipal Door No. 62-A and new No. 96, Lake View Road, West Mambalam, Saidapet, Madras known as Sri Kothandamma Theatre was leased out. Schedule B mentions 60 items of furnitures, fittings and theatre equipments for the running of the business cinema theatre, which includes single seat sofa, double seat sofa, wooden back benches, fire buckets, fire extinguishers, fans, exhaust fans silence board, wooden spittoons, stage screen (cloth) iron screen frame, gunny screen, speaker table wooden, cinema frame with glass and frame, wiring plan with glass and frames and cabin-cum-stage speakers with conduit, and other items.
47. The decision cited by Mr. T.V. Ramanujam, reported in Bombay Burmah Trading Corporation Limited v .A.T .Narayanaswami Pillai 94 L.W. 334 rendered by V. Balasubrahmanyan J. followed in the decisions reported in Narayanan v. Natesa Achari (1986) 2 M.L.J. 18 and M. Abdul Hakim v. M.K.M. Abdul Salam for the principle of law laid down in those cases. In those cases, the lease was not only of building but also includes certain fixtures and other articles belonging to the landlord and which are situated in the building and which would aid the tenant for carrying on his business for which the tenancy has been entered into, and as such, exemption will apply and the lease will be outside the purview of the Tamil Nadu Buildings (Lease and Rent Control) Act and it is called a composite lease.
48. The petitioner in 94 L.W.. 334, constructed a cinema theatre with subsidiary buildings and annexes. The buildings are equipped with fixtures, items of furnitures and certain items of machinery and articles to render the theatre fit for projection and exhibition of cinematograph films. The lease was for a period of five years. The petitioner filed a civil suit against the tenant for his eviction from the cinema theatre, which was resisted by the tenant contending that it did not lie. He said that he was a statutory tenant amenable to eviction under the Tamil Nadu Buildings (Lease and Rent Control) Act and not by a civil court in an ejectment suit. This plea in defence was accepted by the court and the suit was dismissed as not maintainable. The landlord did not react to the dismissal of the suit by filing an application for eviction before the Rent Controller under the Act. However, they invoked this Act for quite another purpose, viz., for fixation of fair rent. They described it as a cinema theatre building with subsidiary buildings constructed by them for the express purpose of conducting cinema shows for providing entertainment to their employees and members of the public. The said application was opposed by the tenant on the ground that it was not maintainable. This plea was rejected by the Rent Controller. The Appellate Authority disagreed with the decision of the Rent Controller and upheld the tenant's objection. The appellate authority relied on the principle that there is no estoppel against statute and held that Section 30(iii) of the Act clearly applied to the instant case. In that view, the Appellate Authority dismissed the petitioner's application for fair rent as incompetent. In this Court, the landlord seeks to canvass the correctness of the appellate authority's decision and contended that the lease in that case cannot be regarded as of a kind which falls within the coverage of Section 30(iii) of the Act. Learned Counsel for the landlord's point was that unless the lease included the full complement of cinematograph talkie equipment and other apparatus, the exemption would not apply. The learned Counsel further submitted that the explanation would not apply even if one item of cinema theatre equipment was missing or had been omitted from the subject-matter of the lease. V. Balasubrahmanyan, J., rejected the said contention. It is useful to extract the following passage:
I do not agree with this way of understanding the exemption provision. In my judgment, Illustration (2) to Section 30(iii) cannot be read and understood in isolation or as an operative provision in itself. Nor can it be read in a literal way. Illustration (2), no doubt mentions a cinematograph talkie equipment, among other items. But the mention of that equipment is only by way of illustration. It cannot be suggested that a fully equipped cinema theatre, but equipped for showing only 'silent films' cannot come within the statutory exemption, for the one and only reason that it lacks a talkie equipment mentioned in Illustration (2). In my judgment, this Illustration does not call for an inventory of the equipment of cinema theatre to find out if the inventory answers and tallies fully and in every respect with the items mentioned in the llustration.
The learned Judge has further observed that exemption is granted to a lease which comprises not only a building but includes certain fixtures, machinery, furniture or other articles belonging to the landlord and which are situated in the building and which would aid the tenant in carrying on the particular business or industry for the carrying on of which the tenancy has been entered into. Again, in paragraph 9 of the judgment, the learned Judge has observed as follows:
In the present case, the landlords themselves admit that the lease was of a cinema theatre as such, together with the cinema equipments which they had fitted the building with up to the date of the lease. The tenant might have had to supplement the existing fittings and cinema equipment leased out to him, in order to make the theatre fully equipped for exhibition of films. But, that does not detract from the lease being a composite lease as contemplated by Section 30(iii). I am, therefore, in entire agreement with the conclusion of the Appellate Authority that the lease in the present case does not brook an application for fixation of fair rent, or any other proceedings for that matter under the Rent Control Act. The result is, that this Revision Petition is dismissed. In the peculiar circumstances of the case, I do not make any order as to costs.
49. In the decision reported in Narayanan v. Natesa Achari (1986) 2 M.L.J. 18, the respondent is the owner of the building comprising of 24 rooms, which was leased out to the tenant. The lease was renewed from time to time. The lease deed mentions that in addition to the first floor of the building, the cots, electric fans, chairs, tables and other items of furniture and some utensils, a three horse power electric pumpset and certain other articles also formed part of the lease and that the premises was to be used for the purpose of running a lodging house by the tenant. After the expiry of the lease period, the landlord declined to accept the rent from the tenant and demanded delivery of possession. The tenant thereupon filed a suit in the Sub Court, Cuddalore, for a declaration that he is a statutory tenant under the Tamil Nadu Buildings (Lease and Rent Control) Act, and therefore he is entitled to remain in possession till he is evicted in accordance with due process of law and for consequential injunction restraining the landlord from interfering with his possession. The landlord in turn filed a suit in the Sub Court, Cuddalore, for recovery of possession of the demised premises. Both the suits were tried together, The trial court found that as the building was leased to the tenant together with fixtures, furniture and other articles for the purpose of running a lodging house, Section 30(iii) of the Act would apply to exempt the building from the provisions of the Act and that the tenant cannot be considered to be a statutory tenant under the Act. The tenant's suit was dismissed and a decree directing delivery of possession to the landlord was granted. The tenant preferred two appeals in the District Court, South Arcot, Cuddalore. The appellate court found that the transaction would be exempt under Section 30(iii) of the Act rendering inapplicable the provisions of the Act. In that view, the appellate court affirmed the dismissal of the tenant's suit and the decree in the landlord's suit and dismissed the appeals. Correctness of this was challenged by the tenant in second appeals before this Court. V. Ratnam, J., as he then was, following the ruling laid down by V. Balasubrahmanyan, J., in 94 L.W. 334, rejected the contention of the tenant and upheld the case of the landlord. The learned Judge held as follows:
However, for the applicability of either Section 30(iii) of the Act or even Illustration (3) thereunder, it is not necessary that the landlord shall be actually running the hotel business. There is nothing in the language of Section 30(iii) of the Act or even Illustration (3) thereunder that only a demise by a landlord who is actually carrying on a hotel business to the tenant for the purpose of enabling him either to continue or carry on the same business is exempt from the provisions of the Act. To accept the construction of Section 30(iii) of the Act or Illustration (3) thereunder in the manner contended for by the learned Counsel for the appellant would be to read into them, words and expressions, which are not there. Even otherwise, Illustration (3) having been incorporated only for the purpose of elucidating the scope of the exemption under Sec 30(iii) of the Act cannot in any manner curtail or cut down the amplitude of the exemption provided for under Section 30(iii) of the Act. In order to qualify for the exemption under Section 20(iii) of the Act, the following requirements have to be fulfilled:
1. There should be a lease of a building,
2. Under that lease, the object of the tenant is to run the business or industry, and,
3. Such a business or industry should be run with the fixtures, machinery, furniture or other articles, the ownership of which is in the landlord and which are situate in the building demised.
The learned Judge has also observed that the splitting up of the rent, which is only notional, has really no bearing upon the availability of the exemption.
50. The decision reported in M. Abdul Hakim v. M.K.M. Abdul Salam , is again a judgment rendered by a learned single Judge of this Court (T. Somasundaram, J.) in a second appeal arising out of decree for recovery of possession of a property leased out under two lease deeds. The learned Judge has followed the rulings of T. Ramaprasada Rao and Natarajan, JJ. (as they then were) in Balaji Cine Enterprises v. Sakthi Talkies 88 L.W. 88 and V. Ratnam, J. as he then was in Narayanan v. Natesa Achari (1986) 2 M.L.J 18. In that case, the lease of the building and the machineries was granted separately under two documents. The learned Counsel for the landlord contended that the lease of the building under Ex.A-1 and the lease of the machineries under Ex.A-2 commenced on the same day and for a fixed period of six years from 1.9.1975 and that the machineries covered under Ex.A-2 are situated in the building covered by the lease deed Ex.A-1, that the object of the lease is for tannery and that therefore, the lease must be construed as a composite lease. The learned Judge observed as follows:
A perusal of the various recitals in Exs. A-1 and A-2 clearly shows that the lease of the building granted under Ex.A-1 and the lease of the machineries granted under Ex.A-2 constitute a composite lease of the building and machineries and such a composite lease of the building and machineries was granted to the defendants to enable them to carry on the tannery business in the building covered by Ex.A-1 using the machineries covered by Ex.A-2. Therefore, the present case squarely falls under Section 30(iii) of the Act and the defendants cannot claim the benefits of the Act.
51. In the decision reported in P. Prema v. K. Arumugham Chettiar (1992) 2 L.W. 213, the court decided the dispute in a second appeal which arose from a decree in a suit for recovery of possession of the suit property and for recovery of damages for use and occupation. It was contended by the defendant/ appellant that she was entitled to the benefits of the Tamil Nadu Buildings (Lease and Rent Control) Act and that even in the agreement between the parties, there was a specific clause to the effect that the tenancy conferred under the document shall be governed by the provisions of the Act and that the claim of the plaintiff should not be accepted and that even it was not a lease of a building within the meaning of the Act, it was a composite lease of a business and immovable property and therefore it was a lease of immovable property within the meaning of Section 105 of the Transfer of Property Act and without notice of determination of tenancy, the suit was unsustainable. M. Srinivasan, J., observed as follows:
A perusal of the terms of the document proves beyond doubt that what was leased was not a building, simpliciter, as defined in the Act, but it was a transfer of business. In the operative portion itself the subject-matter was described as an equipped firewood depot. Moreover, the lessee is expressly prevented from carrying on any other business in the premises as she is enjoined to carry on only firewood business. She is also prevented from putting up any other construction or subletting any part of the premises. There is a provision which enables the lessor to terminate the lease in the event of breach of any of the terms of the lease. Therefore, there is no hesitation for the court to hold that the lease is of a business and not of a building as contemplated by the provisions of the Act. Section 30 (iii) of the Act excludes the application of the Act to any lease of a building under which the object of the tenancy is to run the business or industry with the fixtures, machinery, furniture or other articles belonging to the landlord and situated in such a building. The language of the section shows that even if there is a lease of a building, if it is with the object that the tenant should run the business or industry with the fixtures, machinery, etc., belonging to the landlord and situated in the building, it will be excluded from the application of the Act.
52. The decision reported in Dwarka Prasad v. Dwarka Das Saraf , was relied on by both parties. Unum Chand v. S.M. Lakwani , was also followed by the Supreme Court. In that case, the building covered by the suit was admittedly one built and adapted for screening films. The plaintiff had been carrying on a cinema business in this theatre for a long number of years. The defendant approached him for the grant of lease of the building with all the equipment and fittings and furniture necessary for his operating the cinema. It was provided in the lease deed that the rent for the building, simpliciter, may be shown separately from that attributable to the costly equipments, for the purpose of property tax and other taxes. By this apportionment, the building was to bear a burden of Rs. 400 per month by way of rent and a monthly sum of Rs. 1,000 was fixed for the projector and all other items fixed in the building. It was conceded by the defendant's counsel before the High Court that for the purpose of this case, in spite of there being separate documents of lease in respect of the demised properties as referred to above, these sets of contracts may be treated as a single transaction each time. The core of controversy as quoted in the judgment reads as follows:
(a) whether the lease of the building, the fittings and other fixtures merely making for the beneficial enjoyment of and ancillary to the building, as urged by the tenant, or whether the building provides a bare, though appropriately designed, enclosure to house an enterprise, the dominant purpose of real subject of the lease being the cinema, apparatus and fittings, including subsidiary and incidentally, though necessarily, the structure of brick and mortar; and
(b) whether the cinema, to fall within the exclusionary clause added by the amending Act, must be actually a going concern with all the licences for showing films and running the theatre being in the name of the lessor. Lastly, the effect of the repeal of the Act and the opening provision of the later Act putting cinemas out of its application, has been debated at the Bar.
The crucial point was that the additions are appurtenant, subservient and beneficial to the building itself. It is stated that they make occupation of the building more convenient and pleasant but the principal thing demised is the building and the additives are auxiliary and where the lease is a composite and has a plurality of purposes, the decisive test is the dominant purpose of the demise. Counsel for the tenant emphasized that the present building was conceived, designed and structured expressly as a cinema house conforming to the regulations in this behalf and the purpose of the owner was to use the auditorium and annexes purely as a cinema house. According to him, when a cinema theatre is erected, it becomes useless unless the necessary equipment for exhibiting the films are also fitted up. In this view, the relative cost of the fixtures is immaterial and all these items, however costly, are calculated to fulfil the very object of the construction of the cinema theatre. In short, the fittings and furniture and like items are beneficial and enhance the worth of the building and cannot be divorced or dissected from the whole object which animated the project of the building construction qua a cinema house. It is useful to reproduce the definition made by the Supreme Court to distinguish between a lease of a business or industry housed in a building from a building which has fixtures for more beneficial enjoyment. The Supreme Court observed as follows:
In the present case, we have to visualize what was the dominant or decisive component of the transaction between the parties, the tenancy of the building qua building or the taking over of a cinema house as a business, the projectors, furniture, fitting and annexes being the moving factor, the building itself playing a secondary, though necessary, role in the calculations of the parties. Going by the rental apportioned, it is obvious that the parties stressed the cinema equipment as by far the more important. Judging by the fact that there had already been a cinema in this house for several years, with the necessary certificates under the various statutes for running a cinema theatre obtained by the landlord and that the lease itself was to commence only from the date of the first show of the films, doubts regarding the essential object and subject of the bargain stand dispelled. The mere circumstance that the licence for showing films was taken by the tenant is of little consequence as the law itself requires it to be in his name. The further circumstance that the term of the lease is one case may vary from the other also where, as here, two deeds are executed, is not a telling factor, in view of the clear admission by counsel for the respondent that the two lease deeds together constituted a single transaction and that the lease was for an industrial purpose, to wit, running a cinema business. The conspectus of facts-no one circumstance taken by itself-thus settles the issue in favour of the landlord who contends that what has been granted is a lease of a cinema business and, at any rate, the real intent of the parties to the lease was to demise primarily the cinema equipment and secondarily the building, the lease itself being a composite one.
53. In the above case, the Supreme Court has also followed its earlier judgment in and the legal concept evolved in the said judgment. It is seen from , that the ratio of that case is that the court must apply the test of dominant intention of the parties to determine the character of the lease, ie., what was the primary purpose of the parties in executing the document? In the case before the Supreme Court in , the fixtures are not for the more beneficial enjoyment of the building. On the contrary, the possession of the building is made over as an integral part of, and incidental to, the making over of the cinema apparatus and costly appliances. In the language of P.B. Gajendragadkar, C.J. in , "fixtures are the primary object which the lease was intended to cover and the building in which the fixtures are located comes in incidentally."
54. Placing strong reliance on the above observations of the Supreme Court, Mr. T.R. Rajagopalan contended that in the instant case, the projector and some other electrical equipments have been provided by the tenant himself and therefore, the fixtures are the primary object which the lease was intended to cover and the building in which the fixtures are located comes in incidentally. There is no doubt that the fittings may take in a projector or other apparatus used for a cinema, but it is one thing to say that apparatus is fixed in a building and it is another to say that such fixture or apparatus is for the beneficial enjoyment of the building. Therefore, it depends on the words used in the agreement in question. We have already referred to the terms and conditions contained in the lease deed and the object of the lease and the purpose for which this lease was granted to the 1st defendant as tenant for the dominant purpose of running a theatre in the building with fixtures supplied by the landlords. In our opinion, a lease of a theatre with equipments, furnitures, fittings, etc., cannot reasonably be reduced into a mere tenancy of a building together with fittings which but make the user more comfortable. In the judgment referred to above, the Supreme Court has ultimately rejected the contention of the tenant and upheld the contention of the landlord and ordered eviction in allowance of the said appeal. The Supreme Court has also held that the lease in that case was with reference to showing films and running the theatre being in the name of the lessor and actually as a going concern.
55. The decision reported in Uttamchand v. S.M. Lalwani A.I.R. 1965 S.C. 716, is again relied on by both the learned Counsel. The lease in that case was a Dall mill building with fixed machinery in sound working order and accessories, which was leased out on an annual rent. The question before the Supreme Court was as to whether the lease executed by the respondent therein in favour of the appellant can be said to be lease of accommodation within the meaning of Section 3(a) of the Madhya Pradesh Accommodation Control Act, 1955. The appellant moved the Rent Controller to fix the rent payable by him under the lease in question. This was resisted by the landlord/ respondent on the ground the lease in question did not fall within the protection under the Act as the property demised to the appellant was not 'accommodation' within the meaning of Section 3 and the rent payable by the appellant to the respondent was not payable for any accommodation to which the Act applied. The Rent Controller rejected the contention of the respondent. The respondent went in appeal to the District Court and urged that the Rent Controlling Authority had no jurisdiction to fix rent between the parties. The District Judge rejected the respondent's contention as to the jurisdiction and held that the lease in question was governed by the provisions of the Act. The respondent then moved the High Court in its revisional jurisdiction. The High Court allowed the revision and the application made by the tenant for fixation of reasonable rent had been dismissed. Against the said order, the appellant has filed the above Special Leave Petition. The appellant's case before the Supreme Court was that the lease in question was a lease mainly of the building itself, and only incidentally it takes in the machinery which had been fixed in the building. It was further urged that the dominant intention of the parties in entering into the transaction of lease was not to enter into a transaction in respect of the machinery as such; it was to enter into a transaction in respect of a building and that makes it a lease for an accommodation as defined by Section 3(a)(y). The Supreme Court, accepting the contention of the counsel for the appellant in construing the lease proceeded to determine the character of the lease by asking themselves as to what was the dominant intention of the parties in executing the document. While discussing the dominant intention of the parties, the Supreme Court in paragraph 12 observed as follows:
What then was the dominant intention of the parties when they entered into the present transaction? We have already set out the material terms of the lease and it seems to us plain that the dominant intention of the appellant in accepting the lease from the respondent was to use the building as a Dal Mill. It is true that the document purports to be a lease in respect of the Dal Mill building: but the said description is not decisive of the matter because even if the intention of the parties was to let out the Mill to the appellant, the building would still have to be described as the Dal Mill building. It is not a case where the subject-matter of the lease is the building and along with the leased building incidentally passes the fixture of the machinery in regard to the Mill; in truth, it is the Mill which is the subject-matter of the lease, and it was because the Mill was intended to be let out that the building had inevitably to be let out along with the Mill. The fact that the appellant contends that the machinery which was transferred to him under the lease was found to be not very serviceable and that he had to bring in his own machinery, would not alter the character of the transaction. This is not a lease under which the appellant entered into possession for the purpose of residing in the building at all: this is a ease where the appellant entered into the lease for the purpose of running the Dal Mill which was located in the building. It is obvious that a Mill of this kind will have to be located in some building or another, and so, the mere fact that the lease purports to be in respect of the building will not make it a lease in respect of an accommodation as defined by Section 3(a)(y)(3). The fixtures described in the schedule to the lease are in no sense intended for the more beneficial enjoyment of the building. The fixtures are the primary object which the lease was intended to cover and the building in which the fixtures are located comes in incidentally. That is why we think the High Court was right in coming to the conclusion that the rent which the appellant had (sic) to the respondent under the (sic) in question cannot be said to be rent payable for any accommodation to which the Act applies.
In the above case, a similar contention was raised by the tenant that the equipments, fittings, etc., which were given to him under the lease, were found to be not very serviceable and that he had to erect his own structure and other electrical equipments and therefore if would definitely alter the character of the transaction and as such, the lease in question cannot be construed as a composite lease. The Supreme Court rejected the said contention. We are also of the view that because the lessee in our case has put up some projector and furnitures, it would not mean that Ex.A-1 is not a composite lease. Without the theatre building, fittings, fixtures, furnitures, etc., the projector will be of no use. Anybody can hire a projector. If the lessee vacates, the landlords can put in their own projector. In fact, D.W.I says that he put a plastic screen in the place of cloth screen. That will not, in our view, alter the lease: The lessee by unilateral act changed the character of the lease. We are also of the view that the fittings, furnitures, etc., are obviously the fittings made in the building to afford incidental amenities for the tenant occupying the building.
56. The decision reported in Pals Theatres v. B. Abdul Gafoor Sahib, 86 L. W. 65, is by a Division Bench of our High Court consisting of Ismail, J., as he then was, and Palaniswami, J. In that case, the terms of a lease in respect of a cinema theatre gave also a list of the fixtures, equipment, furniture, projector, amplifier, speaker, monitor, screen etc., and provided for the payment of a monthly rent. The Bench held as follows:
The question of intention of the parties will become relevant only if the terms of the transaction are not clear. Where the terms are clear and unambiguous, it is needless to examine the intention of the parties, because the intention once thus expressed in clear terms, cannot be other-wise. Even if we apply the test of intention to the instant case, there can be no doubt in holding that the intention of the parties was to enter into a transaction of a lease of a going concern of theatre, though inevitably the buildings concerned also form part of the transaction. Even on the plain language of the provision, it follows that if a cinema projector along with the equipments is fixed to a building and the building is let out, the fixtures or fittings, are for the beneficial enjoyment of the buildings, and naturally such a letting would be a letting of a 'building'. But so far as the Madras Act is concerned, such a position does not arise, as the language of the definition of the word building' does not give room to such interpretation.
57. The decision reported in Kapanipathi Rao v. M.S. Meyyappan 86 L.W. 629, rendered by a Division Bench of our High Court consisting of K. Veeraswami, C.J. and Raghavan, J. was a suit for recovery of possession of the Hotel Oceanic and its annexe Ratnagar. The landlord himself was running a residential high-class hotel and restaurant in the said Hotel Oceanic and its annexe Ratnagar, which were fully furnished with fittings, furniture and equipment ever since the completion of its construction. The defendants approached the landlord and negotiated for lease of the said building with restaurant in their favour with a view to run the hotel business. A lease of the hotel business was granted. It was contended that the defendants are not entitled to the benefits of the Tamil Nadu Buildings (Lease and Rent Control) Act and that the defendants have no right to call upon the plaintiff to remove from the hotel premises the various machineries, etc. It was also contended that the lease deed was not a composite lease and what was leased out was only two buildings known as Hotel Oceanic and Ratnagar with the lands appurtenant thereto on a total monthly rent of Rs. 2,500 for the purpose of running a hotel therein, that the furniture and other articles were hired to the defendants separately on a monthly hire basis, that the lease is not a composite lease. The Bench held as follows:
The lease deed in lease dealing both with immovable properties and fixtures and movable properties: furniture, crockery, linen, etc. The transaction of lease amounted to a transfer of the business, which on the date of the lease deed the 1st plaintiff was conducted in the buildings, to the lessees for a period, and it was not a lease of the buildings and fixtures and a hire of fittings, furnitures, crockery, linen, etc., for the purpose of running a hotel and the provisions of the Madras Buildings (Lease and Rent Control) Act is inapplicable to the lease in question and the civil court has jurisdiction to entertain the suit.... In determining the question whether the lease is a composite one or not, we have to find out the intention of the parties and for that purpose, the provisions of the lease deed have to be taken into account in the light of the background and surrounding circumstances at the time of the execution of the lease deed....
The lease deed, read as whole, leaves no room for any doubt that what was transferred under Ex.P-3 was the lease of the business carried on in the said building with the furniture, equipment, crockery, etc., belonging to the lessors. The mere fact, that there are no specific words of 'assignment' is immaterial. The splitting up of the lease amount into rent and hired for the fittings, furniture, crockery, etc., is only notional and that by itself cannot be a clinching circumstance one way or the other. The various covenants relied on by the tenants-appellants are not, decisive on the question whether the lease in question is the lease of the buildings for the purpose of carrying on therein the hotel business with the furniture, property, fittings, etc., hired by the landlord. The difference in phraseology of the definition of 'buildings' under the Madras enactment and the Andhra Pradesh Buildings (Lease and Rent Control) Act, as also the definition of premises under the West Bengal Act and the Bombay enactments or the definition of accommodation under the Madhya Pradesh enactment is very material and Natesan, J., in (1969) 1 M.L.J. 153 has erred in seeking to enlarge the scope of the definition of the word 'buildings' under the Madras enactment for which there is no jurisdiction. (1961) 1 M.L.J. 1953, (Natesan, J.) overruled.
57. In the decision reported in Om Prakash Gupta v. The Commissioner of Police, Madras (1960) 2 M.L.J. 50, a Bench of this Court consisting of P.V. Rajamannar, C.J. and Basheer Ahmed Sayeed, J. held as follows:
A lessee in possession of a premises, the lease in whose favour has expired, and who is not entitled to any protection under the Madras Buildings (Lease and Rent Control) Act, 1949, is one who is not legally entitled to be in possession though it may be that he cannot be ousted from the premises without recourse to a Court of Law. Where the licensing authority under the Madras Cinemas Regulation Act, 1955, is not satisfied that the applicant for licence is in lawful possession of the building within the meaning of Rule 13 of the Madras Cinemas Regulation Rules, 1957, he can refuse to grant the licence. Barring exceptional cases of prima fade perverse orders of refusal it is not within the province of the High Court under Article 226 of the Constitution to examine the correctness of the view taken by the licensing authority whether the applicant is in lawful possession, of the premises, equipment, etc. Unless it is established that the licensing authority is compelled by any statutory provision to grant or renew the licence no writ of mandamus could lie in that regard.
Where equipment is taken on hire the possession of such equipment beyond the date of the hire agreement without the consent of the owner would be per se unlawful and such hirer cannot satisfy the requirement of Rule 13.
58. In the decision reported in P.N. Venkatesa Chettiar v. Annamalai Industrial Corporation (1984) 2 M.L.J. 92, R. Sengottuvelan, J., has observed as follows:
In Prls Theatres v. G. Abdul Gafoor (1973) 2 M.L.J. 554: A.I.R. 1974 Mad. 135, it was held that the lease of a cinema theatre with all equipments for exhibition of films is not a lease of the building but would be a composite lease. Applying the principle laid down in that decision to the facts of the present case there is no difficulty in coming to the conclusion that the lease of a rice mill consisting of the premises and the rice milling machinery belonging to the landlord and erected in the building is exempt from the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act XVIII of 1960 as per Section 30 of the said Act.
59. In the decision reported in S. Raju Chetty v. Jagannathdas Govindas, 62 L. W. 860, a Bench of this Court consisting of Rajamannar, C.J. and Krishnaswami Nayudu, J., held as follows:
In the case before us, there is no lease of a mere building or a building with compound and furniture of the sort covered by the definition. The lease is of land and building together with fixtures, fittings, cinematographic talkie equipments, machinery and other articles. The lessors, evidently aware of the composite nature of the demise, have prayed in their petition for eviction of the lessees from the land and buildings only. On behalf of the respondent, Mr. K.V. Ramachandra Iyer relied strongly on the provision in the deed which splits up the monthly rent and hire of Rs. 3,200 into Rs. 1,600 being rent for the ground and superstructure, Rs. 800 being hire of furniture and Rs. 300 being hire of talkie equipments and machinery, fittings and lessors' fixtures. We have no hesitation in holding that this splitting is purely notional and nominal and intended probably for purposes relating to the municipal assessment and other extraneous considerations. When we asked Mr. Ramachandra Iyer what would happen, in this case when there is an eviction of the lessees from the land and building, to the machinery and equipments, etc., and whether there was any provision in the deed relating to them, he confessed that there was no specific provision in the deed. Obviously they cannot be governed by Madras Act XV of 1946 and so he said they must be governed by the general law of contract. He also conceded that if the lessees paid Rs. 1,600 but defaulted in the payment of the balance which is due as hire, the lessors have no right to ask for eviction under the Rent Control Act. We think that the attempted division of the lease and separation of rights in regard to two classes of property is in the highest degree artificial, never contemplated by the parties. Here is a lease of a talkie house with everything that is necessary to run cinema shows. To split up such a composite lease as this into separate contracts of lease and hire is to destroy it altogether.
60. In W.P. Nos. 1640 and 1641 of 1968 judgment dated 7.11.1968 a Bench of this Court consisting of Venkataraman and Ramamurthi JJ. held as follows:
In this particular case, the fittings in question, in particular, the wiring to the projector in the cabin room, sound room and the ceiling sheets, were adapted for the purpose of letting as a cinema house and would not take the letting out of the Act. It may be noted that the projector and the connected machinery were provided by the lessee. Even if the projector and the connected machinery had belonged to the lessor and was part of the lease, the question may still remain whether it would make any difference to the dominant intention and I, for my part, reserve consideration of the question till a concrete case arises. But, where the projector and the connected machinery belong to the lessee and is not the subject matter of the lease, I think there is very little room for argument, that the dominant intention was not the letting of the building but something else. We have taken into account all the circumstances as a whole and have no hesitation in coming to the conclusion on the facts of this case that the dominant intention was the letting of the building as such together with the furniture and the fixtures, the furniture, fixtures and the amenities being incidental thereto.
61. The decision reported in Dr. M.R.S. Vas v. The Commissioner of Land Revenue, Madras A.I.R. 1978 Mad. 126 is the decision rendered by a Division Bench of the Madras High Court consisting of P. Govindan Nair, C.J. and Varadharajan, J. as he then was. This again is a matter arising under the Tamil Nadu Cinemas (Regulation) Rules, 1957. In that case, the applicant was not the owner of the site, building and equipment, he filed the writ petition to quash the order of the Commissioner of Land Revenue, Prohibition and Excise, the 1st respondent. The 1st respondent passed an order on 19.7.1976 on the appeal filed by one Krishnamurthi, the temporary licensee of Ramakrishna Talkies against the Collector's order refusing renewal of the 'C' Form licence for the cinema. The writ petitioner had constructed the Ramakrishna Talkies and in July, 1935, the 'C' Form licence was issued in his favour under the Public Resorts Act II of 1888. He was running the cinema theatre in his name and later on his brother with the licence standing in his name. An agreement of lease dated 15.10.1947 in respect of the talkies for a period of five years was entered into. A supplemental agreement between the parties for apportioning the rent of Rs. 1,200 per month into Rs. 600 representing the rental for the theatre building and Rs. 600 representing the hire charges for the furniture, fans, bulbs, fixtures, etc., and other materials required for fulfilling the regulations and requirements of District Magistrates, Electrical Inspectors, Fire Brigade Officers and Public Resort Act's licences was entered into. A further lease dated 10.7.1965 between the petitioner and one R. Krishnamurthi was executed as a running concern. When the matter of issue of regular 'C' Form licence was pending before the Collector after the expiry of the lease on 30.9.1975, the petitioner raised an objection for the renewal for the 'C' Form licence saying that the lease expired on 30.9.1975 and that it was of a composite nature not falling within the purview of the Tamil Nadu Buildings (Lease and Rent Control) Act 1960, and that on the expiry of the lease, the lessee could not claim to be in lawful possession of the property and that therefore, the requirement of Rule 13 of the Tamil Nadu Cinemas (Regulation) Rules, 1957, was not satisfied. The question, therefore, for consideration by the Collector was, whether the lessee was in lawful possession as required by Rule 13 of the Rules. The Collector thought that the licensee cannot be considered to be in lawful possession unless the tenancy is either covered by the lease document or the tenant continues to be in occupation as a statutory tenant under the Tamil Nadu Buildings (Lease and Rent Control) Act. The lessee filed an appeal before the 1st respondent against the Collector's order. It was contended by the lessee that the lease was not a composite one inasmuch as the projector and the loud-speakers, amplifiers and other cinema equipments had to be provided by the lessee himself. The 1st respondent accepted the contention and allowed the appeal and directed the Collector to issue 'C' Form licence to the 3rd respondent/ lessee. The 1st respondent held that the lease is purely that of the buildings and it is not a composite lease and as such, the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act will be applicable in this case and therefore the lessee will become entitled to protection under the above act and that being the case, it cannot be said that he was in illegal possession of the building after 30.9.1975. The Division Bench in its order referred to the decision of the Supreme Court in Dwarka Prasad v. Dwarkadas Saraf and also Uttamchand v. S.M. Lalwani and held that the inventory taken in that case shows that along with the building of Ramakrishna Talkies, the petitioner had leased 91 wooden benches, 42 back benches, with iron stand, 50 teakwood arm chairs, etc., etc. The Bench observed that these articles are in no sense intended for the more beneficial enjoyment of the building and would be properly only for the purpose of running the cinema. In that case, the agreement also provides that the lessee has to apply for licence for the business as a running concern bearing the name and style of Ramakrishna Talkies and that the lessee has to make his own arrangements to obtain renewal of the licence every year for conducting shows, etc. Therefore, the Bench held that what had been leased was not mere Ramakrishna Talkies building but Ramakrishna Talkies business with the necessary licence and all the equipments except small projector and the sound equipments which belong to the lessee, and that by consent of the parties to the lease deed, a double projector and sound equipment had been replaced by the lessee. As in the present case, as contended by Mr. T.R. Rajagopalan, great stress was laid by the learned Counsel for the contesting respondents in that case, on the fact that the cinema projector and sound equipment used in the theatre belong to the lessee and not to the lessor and therefore it must be sufficient to hold that the lease was not of a running concern but only of a building. Rejecting the contention and following the principles laid down in A.I.R. 1965 S.C. 716, the Bench was of the opinion that the mere fact that the single projector and the sound equipment which the petitioner was using until the date of the lease in favour of Ramasubramania Iyer had not been leased but had been replaced by the double projector and sound equipment belonging to the lessee by consent of the parties to the lease would not alter the nature of the transaction in this case. The Bench has observed as follows:
The dominant purpose of the lease, as disclosed by the apportionment of the rental of Rs. 1,500 into Rs. 600 being the rental for the theatre building and Rs. 900 being the hire charges for furniture, fans, fittings and also for the goodwill of the business as a running concern, would also show that the lease was of the Ramakrishna Talkies as a running concern together with the building in which it was being run by the petitioner until the date of the lease and not of the mere building. Therefore, it would follow that the lease is a composite one and that it is not governed by the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. The possession of the 3rd respondent after the expiry of the lease on 30.9.1975 was not either under any subsisting contract of lease or under any lease coming within the purview of the Tamil Nadu Buildings (Lease and Rent Control) Act. Therefore, the possession of the 3 rd respondent after 30.9.1975, was not lawful possession and consequently he had not satisfied the requirement of Rule 13 of the Tamil Nadu Cinemas (Regulation) Rules, 1957, and he was not entitled to have the C form licence granted by the Collector for running the cinema business in the building.
62. In our opinion, the principles laid down in the above case squarely apply to the facts and circumstances of the case on hand. We have already discussed the terms and conditions contained in Ex.A-1 in extenso in paragraphs supra. As clearly mentioned in the lease deed the dominant purpose of the lease, as disclosed in the lease deed Ex.A-1, was for running a cinema theatre and that the lessee should run the theatre in the name of Sri Kothandarama Theatre for a period of 13 years with the building, furniture, electrical fittings, etc., as set out in Schedules A and B. Under the agreement, the lessee has to pay the rent for the building and hire charges for the furnitures, fittings, etc., and also apply and obtain police permission, etc., for conducting the cinema theatre or exhibiting any films, pictures, etc. The lessee shall also pay the electricity charges, meter rent, etc., taxes like professional tax for the business and also the licence fee for running the cinema theatre. It is also seen from Clause 2(x) that the lessee shall bear and pay all the charges, fees, etc., for running the theatre as a going concern and for exhibiting any film, picture, etc. Thus, the intention of the parties has been very clearly spelt out in the clauses, referred to above. Therefore, we have no hesitation in holding that the dominant purpose of the lease is for running a theatre as a going concern together with the building in which it was being run. It would, therefore, follow that the lease is a composite one and that it is not governed by the provisions of the Act as contended by the appellant.
63. It is also useful to refer to the Commissioner's report filed in I.A. No. 6148 of 1962 in O.S. No. 2521 of 1962 on the file of the Third Assistant City Civil Judge, Madras. The said suit was filed by Rukmani Bai and others against C.V. Rajagopal Chetty and another. An application for appointment of Commissioner was taken out by the defendants C.V. Rajagopal Chetty and another as petitioners. The Commissioner took out an inventory of the various articles kept in the premises as per the directions of the court. The Commissioner has found 21 items in the auditorium, five items on the switch board on the right side wall of the auditorium, five items on the switch board on the left side wall of the auditorium, five items on the switch board on the right side wall of the auditorium, 59 items of furnitures, 20 items inside the cabin and 13 items in the rewinder room. The inventory was taken by the Commissioner on 22.10.1962. It is seen from the inventory taken that all the items required for running a cinema theatre were given to the lessee for effective running of the theatre, which includes furnitures provided, loud speaker, double speaker, etc. and all other electrical items except projectors and their accessories, which the defendant C.V. Rajagopal Chetty admitted that the three projectors and their accessories kept in the cabin room belong to the plaintiffs Rukmani Bai and others.
64. Likewise, Ex.B-13, dated 29.11.1963, which is the lease deed executed between C.V. Rajagopal Chettiar and C.R. Govindaswami Chettiar on the one hand and Rukmani Bai and K. Viswanath Singh on the other, also provides under Clause (C) that the lessee shall use the premises only as a place of exhibition of cinematograph shows in the public and shall not use the theatre for any other purpose without the written consent of the lessors and that the lessee shall not be entitled to sub-lease the premises to others. It also further provides that the lessee shall take the necessary licences for the running of the cinematographic shows as per the Rules of Cinematographic Act and places of Public Resorts Act, etc., for conducting the cinema shows in the premises in question. As per Clause (m) the lessees shall at their own expense and cost bring the theatre into a working condition and shall themselves apply for and obtain necessary licences to run cinema shows in the said theatre and the lessors shall in no way be responsible for effecting any repairs, renovations or improvements to the theatre.
65. Ex.B-11 is the decree in O.S. No. 2521 of 1962 on the file of the City Civil Court, Madras, dated 21.3.1963 between the parties to the present action. That suit was filed by the lessees for specific performance of an agreement dated 5.11.1961 by executing and registering the deed of lease in respect of the theatre known as Kothandarama Theatre, and of the furniture and electric fittings therein described in Schedules A and B thereunder in favour of the 1st plaintiff Rukmani Bai and for other reliefs. That suit was decreed and the defendants therein were directed to execute and register the deed of lease in respect of the theatre known as Kothandarama Theatre, and of the furniture and electric fittings therein, more fully described in Schedules A and B in that decree in favour of the 1st plaintiff Rukmani Bai as per the agreement dated 5.11.1961. Schedule B relates to the furnitures and fittings provided by the lessors to the lessees. Sixty-five items of furniture viz., 24 single seat sofas, 12 double seat sofas, 125 cushion chairs, 59 wooden back benches, 52 wooden back benches, fire extinguishers, fire buckets, electrical fittings, etc. were given in Schedule B.
66. Ex.A-28 is the plaint copy in C.S. No. 88 of 1957 on the file of this Court. That suit was filed by Rukmani Bai and K. Viswanath Singh against the lessors herein. Paragraph of the plaint reads that the said theatre is equipped with furniture and fittings as a cinematograph exhibition house and that the 1st plaintiff Rukmani Bai, holds a lease of the said property where with her own machinery runs a business of cinematograph exhibitions and that the lease in her favour is dated 1.12.1954 and is in writing and registered. Ex.B-9 is again a memorandum of agreement between the same parties, which was entered into between them to settle all their disputes and proceedings now pending in various courts in the manner provided thereunder. Clause 10 of that agreement is relevant. It provides that the lease of the theatre and the hiring of the furniture, fittings, etc., shall be co-extensive.
67. Thus, the terms and conditions stipulated in the various agreements referred to and entered into between the parties to this action clearly go to show that the intention of the parties is to run the theatre as a going concern with the furnitures, fittings, etc., as originally provided by the lessors and subsequently altered and provided from time to time by the lessees. As pointed out by a Division Bench of this Court in 86 L. W. 65, the question of intention of the parties will become relevant only if the terms of the transaction are not clear. In this case, the terms are very clear, simple and unambiguous and therefore, the intention also can be clearly seen and the purpose for which the building was taken is to run the business of the theatre with the fixtures, fittings, etc. There can be no doubt in holding that the intention of the parties was to enter into a transaction of lease of a going concern of theatre. So, we have no hesitation in holding that Ex.A-1 is a composite lease. We answer the point accordingly and in favour of the lessors and against the lessees.
68. The last question which remains to be decided is the question of damages claimed by the plaintiffs/ lessors. The plaintiffs in paragraph 8 of the plaint claimed a sum of Rs. 10,000 per month as damages for use and occupation after the termination of the lease. The reason for claiming Rs. 24,000 though restricted to Rs. 10,000 has been clearly mentioned in paragraph 8 of the plaint. The defendants in paragraph 19 of the written statement states that the estimate of a weekly income of Rs. 6,000 and Rs. 24,000 per month is wholly exaggerated and they are not getting a monthly rent of Rs. 10,000 as alleged and that the income on account of the lease of the building will not exceed Rs. 3,000 per month. The defendants, therefore, state that the claim is exaggerated. In our opinion, it is only an evasive denial. The 1st defendant's evidence is that he is getting Rs. 3,600 per week as per Ex.B-39. It may be even more. D.W. 1 admits that he will get Rs. 3,000 net per week, which works out to Rs. 12,000 per month. The plain-tiffs have examined P.W.3, an employee of Palaniappa Talkies. Nothing is elicited to discredit his evidence. P.W.3 says that the suit theatre will fetch Rs. 8,000 to Rs. 10,000 per week. D.W. 1 himself admits that he is a partner of Mahalakshmi Talkies and he is getting a weekly hire of Rs. 7,000 to Rs. 7,500. Including the rent from canteen, cycle stand and car parking, the monthly income comes to Rs. 15,000. Therefore, in our view, the damages fixed by the court below at Rs. 10,000 per month is fair and reasonable and does not call for interference by this Court.
69. For the foregoing reasons, we dismiss both the appeals with costs, costs one set. The lessors are permitted to withdraw the amount already deposited by the lessees to the credit of O.S. No. 885 of 1984 on the file of City Civil Court, Madras, without furnishing any security.