Gujarat High Court
Minor Anish Achyut Chinubhai vs Nanikram Sobhraj Mills Pvt. Ltd. on 2 December, 1991
Equivalent citations: (1992)2GLR1133
JUDGMENT N.B. Patel, J.
1. These four appeals arise out of a common judgment and four separate decrees passed in Special Civil Suit No. 626 of 1984, 627 of 1984. 628 of 1984 and 629 of 1984 respectively by the learned Judge (Court No. 4, City Civil Court, Ahmedabad) whereby the learned Judge has dismissed all the four suits without, however, any order as to the costs of the parties.
2. The aforesaid four suits were filed by different plaintiffs (one in each suit) against the same defendant, viz., M/s. Nanikram Sobhraj Mills Pvt. Ltd., claiming possession of the demised property with mesne pvofits, etc. The four plaintiffs are the members of the same family and there is no dispute about the fact that their predecessor-in-title bad, by a lease deed (Ex. 35) dated 8-5-1938 and a supplementary lease deed (Ex. 36) dated 15-12-1939, leased out to the defendant a large piece and parcel of land, with some buildings standing thereon, for use by the lessee "for silk, rayon and cotton weaving, dyeing and printing factory". By the supplementary lease deed (Ex. 36), only some additional adjoining land was leased out for additional rent to the defendant, but, the purpose of the lease and the other conditions and terms of the lease continued to be the same as in the original lease deed (Ex. 35) dated 8-5-1938. The properties left by the predecassor-in-title of the four plaintiffs were partitioned amongst the plaintiffs and each plaintiff got a particular portion out of the demised property and it was, therefore, that each plaintiff separately filed one suit for possession of the portion which had fallen to his or her share. Possession of the demised property was claimed on the ground of breach of some conditions and arrears of rent. We are, however, not concerned with the grounds on which possession was sought from the defendants. The point to be noted is that the suits for recovering possession from the defendant-lessee were filed on the basis that the Bombay Rents, Hotel and Lodging House Rates Control Act (i.e. the Rent Act) was not applicable to the facts of the cases. There is no dispute about the position that if the tenancy was governed by the provisions of the Rent Act, the suits ought to have been filed in the Court of Small Causes, Abmedabad, and that the City Civil Court will have no jurisdiction to entertain, hear and decide the suits. Briefly, the contention on behalf of the plaintiffs-landlords was that the lease was created for manufacturing purpose and, therefore, the provisions of Section 6(1) of the Rent Act did not apply to the case and hence the City Civil Court had jurisdiction to entertain the suits.
3. The suits were resisted by the defendant, inter alia, on the ground that the provisions of the Rent Act did govern the suits and regular Civil Court had no jurisdiction to entertain the suits since Section 6(1) of the Rent Act squarely applied to these suits and the suits having not been filed in the Court of Small Causes, Ahmedabad, having exclusive jurisdiction to entertain the suits under the Rant Act, the City Civil Court had no jurisdiction to proceed with the suits and must dismiss them.
4. The learned City Civil Judge raised an issue relating to the jurisdiction of his Court arising from the aforesaid controversy between the parties and having heard that issue as preliminary issue, has recorded a clear finding that the tenancy in question was governed by the provisions of the Rent Act and Section 6(1) of the Rent Act applies to the facts of the case and, therefore, it was only the special Court constituted under the Rent Act, i.e. Small Causes Court at Ahmedabad which had jurisdiction to entertain and decide the suits. It is in consequence of this finding recorded by the learned Judge that he has held that his Court had no jurisdiction to proceed with the suits and he has accordingly dismissed the suits.
5. The aforesaid finding of the learned Judge was strenuously contested before this Court by the learned Advocate General appearing for the plaintiffs who have filed the present four appeals. It was contended by the learned Advocate General that, in the facts and circumstances of the case, tenancy created in favour of the defendant was not governed by the provisions of Section 6(1) of the Rent Act and, therefore, Pait-II of the said Act does not apply to the facts of the case and the Cily Civil Court had jurisdiction to deal with the suits. On the other hand, Mr. Gehani, the learned Counsel appearing for the respondent in F.A. No. 853 of 1986, supported the aforesaid finding of the learned Judge and urged for dismissal of the appeals.
6. This judgment will dispose of all the four appeals as they involve common question of law, viz., whether the City Civil Court had jurisdiction to deal with the suits in question or whether the Court under the Rent Act alone had jurisdiction to deal with the suit.
7. In order to appreciate the rival contentions raised by the learned Counsels, it may be necessary to have a look at Section 6(1) of the Rent Act. Section 6 occurs in Part-11 of the Rent Act which covers Sections 6 to 31. Section 28 deals with the jurisdiction of Courts and it constitutes special Courts for the purpose of exercising jurisdiction and lays down that any suit or proceeding between a landlord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of this part applies will be entertainable by (so far as material for our case) the Court of Small Causes, Ahmedabad and no other Court shall have jurisdiction to entertain any such suit. The question, therefore, is whether the suits for possession filed by the plaintiffs-appellants were in respect of the premises to which the provisions of Part-11 of the Rent Act apply. In order to decide this question, we have to turn to Section 6 and it is the interpretation of the provision of Section 6(1) which would decide the fate of these appeals.
8. Section 6(1) provides:
In areas specified in Schedule I, this part shall apply to premises let for residence, education, business, trade or storage and also to open land let for building purposes.
9. We are not concerned with the other parts of Section 6. It is abundantly clear that if any premises are let for any of the purposes mentioned in Section 6(1) of the Act, Part-11 of the Rent Act, which contains Section 28 and which is referred to above, will be applicable. There is no dispute that the area in which the demised premises are situated is an area specified in Schedule-1 and, therefore, the question was whether the premises were let for any of the purposes mentioned in Section 6(1) of the Act. There is no controversy, and there cannot be any, that the premises in this case were not let for residence, education, trade, storage nor they were, though open land, let for building purposes. It will be presently seen that it would be more appropriate in this case to say that the premises were let to the defendant to enable it to set up Textile Industry and to manufacture Silk, Rayon, Cotton and, for that purpose, to undertake weaving, dyeing and printing processes. The question which was raised before the learned trial Judge and before this Court was whether the process of manufacturing can be included within the word "business" occurring in Section 6(1) of the Act. Before reverting to this question, it may be advantageous to note that Clause 4 of the lease-deed casts an obligation on the lesser to keep the premises in tenantable condition. However, at the same time, it provides "If, however, any repairs are necessary for the purposes of business carried on by the lessee or for the use of leased premises, the lessee undertakes to do the same at his own costs". Thus, in this clause, parties have referred to the activity to be carried on by the lessee on the demised premises as business. Mr. Gehani submitted that this Clause 4, by referring to the activity to be undertaken by the lessee as business, indicates clearly that letting in this case was for the purpose of carrying on the business of the lessee. He submitted that, therefore, Section 6(1) of the Act, in terms applies to the lease created in favour of the defendant and, therefore, Part-11 of the Rent Act would be applicable and any suit for possession for the demised property will be within the exclusive jurisdiction of the Small Causes Court, Ahmedabad and the City Civil Court, Ahmedabad will have no jurisdiction to entertain it. However, in order to find out the correct connotation of the word "business" as occurring in Section 6(1), it may not be wholly correct to rely on the fact that, in the lease-deed, the parties had described the activity to be undertaken by the lessee as business.
10. The really important clause of the lease-deed is Clause 8 and it states "The leased land shall be maintained by the lessee in a good condition and shall be used for silk, rayon and cotton weaving, dyeing and priming factory". It should be obvious from this that it was for use by lessee for manufacture of silk, rayon and cotton cloth that the land and some buildings standing thereon were taken on lease by the defendant. It would, therefore, be more appropriate to say that letting in this case was for the purpose of manufacture. It is clear that the word 'manufacture' is nowhere used in Section 6(1) of the Rent Act. The question, however, is whether the word 'business' used in Section 6(1) will not cover manufacturing activity intended to be undertaken by the lessee while taking the property on lease. The learned Judge has held that the word 'business' as occurring in Section 6(1) must be given sufficiently wide meaning so as to cover manufacturing activity as undertaken by the defendant in the present case, presumably for the purpose of making profit. For this purpose, the learned Judge has referred to the meaning of word 'business' as given by different dictionaries and the view taken by the learned Judge is that considering the different meanings of the term business' as given in different dictionaries and also considering the context in which the word occurs in the lease-deed, it must receive wide enough interpretation to cover within its sweep activity as undertaken by the defendant in the present case.
11. In my view, apart from the justifiability in giving a wider connotation to the term 'business' by reference to the dictionary meanings of the word, the important question is whether it would be more in consonance with the object of the Rent Act to give the term 'business' a wider connotation or a narrower connotation.
12. It requires very little discussion to point out that the object of the Rent Act is to give protection to the tenants by preventing the landlords from exploiting the situation arising from actue scarcity of accommodation prevailing in the areas where the Rent Act is made applicable. Now, if such is the object of the Rent Act, as indeed it is, the next question will be whether there is no scarcity of land or premises for undertaking; manufacturing activities. It is not at all possible to say that in the areas specified in Schedule I of the Rent Act, there is scarcity of land or premises to be used only for the purpose of residence, education, trade or storage. It is a matter of common knowledge that in these areas, there is an overall scarcity of land, including land which can be used for manufacturing purposes. In fact, if there is scarcity of land to be used for all the aforesaid purposes as also for the purpose of business (if that term is taken in the narrow sense of covering only trading or commercial activity), there is no reason to believe that there is no scarcity of land to be used for manufacturing purposes. In my view, theretore, when this object of the Rent Act is borne in mind, the learned judge must be said to have correctly interpreted the word 'business' as occurring in Section 6(1) of the Rent Act and in holding that it would cover within its sweep manufacturing activity also, proviaed they are undertaken for the purpose of earning profits. The term 'business' normally indicates repetitive and systematic activities undertaken to earn profit. Merely because some person undertakes to manufacture the goods in which he wants to deal, it cannot be said that his activity does not partake of the nature of business activity.
13. However, in support of his contention that the word 'business' i as used by the legislature in Section 6(1) of the Rent Act would not cover manufacturing activity, the learned Advocate General cited some decisions and it may be examined whether any of these decisions renders any assistance to the learned Advocate General in support of this contention.
14. The decision of the Supreme Court in Uttamchand v. S.M. Lalwani is clearly not applicable to the facts of the present case. In that case before the Supreme Court, a Dal Mill which was in a running condition was leased out for the purpose of running it as a factory. Not only that, but there were building on the land and machinery was also fixed in the buildings and the dominant intention of the parties was to transfer the right to run the factory as a Mill. In this situation, it was held that the subject-matter of the lease was not the buildings, but it was the running Mill which was the subject-matter of the lease and it was because the running Mill was intended to be let out that the buildings were inevitably let out along with the Mill. As against the facts of the case before the Supreme Court, the facts in the case before us are that the lessor has leased out to the lessee not any running Industry or Mill but has clearly let out lands though, of course, with some buildings thereon. It is true that in the lease-deed in our case, it is mentioned that the property was demised to the lessee for being used by the lessee "for silk, rayon and cotton weaving, dyeing and printing factory". There was, however, no machinery whatsoever on the demised property for starching or running any industry. There was no industry or factory for manufacturing in existence, on the demised property at the time of the creation of the lease. The only thing which can be said and said correctly is that the land and buildings were taken on lease by the defendant for installing its own machinery to manufacture textiles and to sell the same for earning profits. By no stretch of imagination, it is possible to say that any right to run a running industry or factory was contracted out or leased out or farmed out to the lessee. The citation of the above authority, therefore, does not render any assistance to the learned Advocate General in contending that the lease in the present case would not be governed by the provisions of Section 6(1) of the Rent Act.
15. Similarly, the next decision of the Supreme Court cited by the learned Advocate General, viz., Inandus v. Anant Ramchandra Phadke AIR 1982 SC 127 is also of no assistance in resolving the controversy arising in the present case. That was a case in which the provision of Section 106 of the Transfer of Property Act was required to be considered and it is in that context that the Supreme Court has considered as to whether a lease for running a flour mill was a lease for "manufacturing purpose" within the meaning of that expression in Section 106 of the Transfer of Property Act. So far as the Transfer of Property Act is concerned, it makes departure in the case of a lease for manufacturing purpose and also a lease for agricultural purpose and lays down that termination of such lease would, subject to the contract to the contrary, require six months' notice as opposed to 15 days' notice in the case of lease for other purposes. In the present case, we are not concerned with the question as to what should be the duration of notice for the purpose of terminating under the provision of Section 106 of the Transfer of Property Act, a lease created for manufacturing purpose. We have to interpret Section 6(1) of the Rent Act and especially the word "business" occurring therein keeping in view the object of the Rent Act and no consideration which would be relevant for interpreting Section 106 of the Transfer of Property Act will be relevant for the purpose of construing Section 6(1) of the Rent Act.
16. In the case of Osman Fakir Mahomed Divecha v. Ali Akbar Javad Sadkya and Anr. , open land situated in the Bombay Suburban District was leased out for "constructing buildings of every description howsoever" and the question was whether the land leased in the said case was "premises" within the meaning of Section 6(1) of the Rent Act. It was held that since the purpose of demising land was not let out for the purposes mentioned in Section 6(1) of the Rent Act, the demised land in that case was not "premises" within the meaning of Section 6(1) of the Act. What we have to consider is whether, in the present case, the lease is not for "business", even though it clearly stipulates that land and some buildings standing thereon were leased out to the defendant for the purpose of setting up by it (defendant) a textile mill and manufacturing silk, rayon or cotton cloth. This question was not there before the Supreme Court and it is neither considered nor decided by the Supreme Court.
17. In Mangubhai Ranchhodji Desai v. Alibhai Noormohammad and Ors. (1961) II GLR 102 also, the dominant intention of the parties to the lease was to lease out to the lessee the right to run an existing factory and it was only incidental that the buildings, in which machineries of the factory were situated, were referred to in the lease-deed. this Court held that the right to run factory leased out in the said case was not "premises" within the ambit and operation of the Rent Act. Here also, the question whether the term "business" occurring in Section 6(1) of the Rent Act covers within its ambit manufacturing activities carried out for the purpose of earning profit did not arise for consideration. This decision is also, therefore, of no help to the plaintiffs in the present case.
18. None of the aforesaid decisions cited by the learned Advocate General deals with the question which arises for determination in the present appeals. As already stated by me above, the word "business" as occurring in Section 6(1) of the Rent Act has to be interpreted keeping in view the object of the legislature and that object being clearly to prevent exploitation by the landlords taking advantage of the acute scarcity of accommodation, I have no hesitation in concurring with the view taken by the learned Judge that the word "business" must receive sufficiently wider meaning so as to embrace within its sweep manufacturing activity undertaken for the purpose of earning profit.
19. Before concluding, it may be noted that so far as the defendant is concerned, it has all along contended that the lease was for the purpose of carrying on business and it was in the alternative contended that, even assuming that it was for the purpose of manufacturing, in the facts and circumstances of the case, where manufacturing was intended to be undertaken and actually undertaken for the purpose of earning profit, such manufacturing activity would be covered within the meaning of the term "business" as occurring in Section 6(1) of the Rent Act.
On careful consideration of the question posed before this Court, I am of the view that the lease created in the present case was for business purpose and, therefore, fell within the purview of Section 6(1) of the Rent Act and hence Part-11 of the Rent Act, containing Section 28 thereof, is attracted. Consequently, therefore, it is found that the learned Judge was quite right in holding that the regular Civil Court, i.e., the City Civil Court, Ahmedabad, in the present case, had no jurisdiction to entertain, hear and decide the suit. It must also follow that Small Causes Court, Ahmedabad, being a Special Court created under the Rent Act to exclusively deal with the suits of the nature filed by the plaintiff, the City Civil Court had no alternative but to dismiss the suit. There was no question in the present case of returning the plaints to the plaintiffs for presentation to the proper Court. In the result, therefore, these appeals are dismissed without, however, any order as to costs in the facts and circumstances of the case.