Karnataka High Court
Ramesh P. Seth vs M.S. Krishna Murthy And Anr. on 5 September, 2001
Equivalent citations: ILR2002KAR565, 2001(6)KARLJ575, 2002 AIR - KANT. H. C. R. 1335, 2002 AIHC 2106, (2001) 6 KANT LJ 575, (2002) 2 RENCR 224
Author: N. Kumar
Bench: N. Kumar
ORDER
The Court
1. The plaintiff is the owner of the shop premises which is in the occupation of the defendant as a tenant. The rent of the premises is Rs. 870.00 per month. As the provisions of the K.R.C. Act are not attracted to the shop in question in view of Section 31 of the said Act the plaintiff got issued a legal notice dated 30-10-1998 terminating the tenancy of the defendant in respect of the leased shop premises and the defendant was called upon to vacate and deliver the vacant possession of the shop premises on the expiry of 30-11-1998. The said legal notice was duly served on the defendant. The defendant admitted the tenancy, the rate of rent. However, he set up a plea of fresh lease for a further period of 15 years and therefore contended that he is not liable to vacate the shop premises. Therefore, the plaintiff was constrained to file the suit O.S. No. 9619 of 1998 on the file of the 14th Additional City Civil Judge Court, Bangalore, for his ejectment and also for an enquiry to be held for determining the mesne profits for the wrongful use and occupation of the shop premises after the termination of the tenancy. The defendant contested the said claim by filing a written statement. In the written statement he admitted the relationship of landlord and tenant, the rate of rent and the receipt of the legal notice but he contended that the lease has been renewed for a further period of 15 years and therefore the plaintiff is not entitled to the decree for ejectment. He also contended that the City Civil Court has no jurisdiction to entertain the suit for ejectment and for mesne profits as it is the Court of Small Causes which has the exclusive jurisdiction to grant the relief sought for. The Court apart from framing other issues framed the issue regarding jurisdiction in the following manner.-
"Whether this Court has no jurisdiction to try the suit?"
The said issue was heard as a preliminary issue. The Court on consideration of the rival contentions and also taking note of Section 8 and Article 4 in the Schedule to Section 8 in the Karnataka Court of Small Causes Act came to the conclusion that though the suit for ejectment and for arrears of rent of less than Rs. 25,000.00 is cognisable by the. Court of Small Causes only, as the plaintiff has sought for the relief of mesne profits for use and occupation of the shop premises after the termination of tenancy, such a suit is not cognizable by the Court of Small Causes. Further, it held as the cause of action for both the reliefs is one and the same, the plaintiff cannot be compelled to file two suits in two different Courts for the aforesaid two separate reliefs and in that view of the matter he held the City Civil Court has jurisdiction to grant the relief sought for. Accordingly, he answered the preliminary issue. It is against the said order on additional issue regarding jurisdiction the defendant has preferred this revision.
2. Sri S.K.V. Chalapathy, learned Counsel for the petitioner contends though in respect of non-residential premises, the rent of which exceeds Rs. 500.00 p.m. Section 31 of the Karnataka Rent Control Act, 1961 (for short hereinafter referred to as the "K.R.C. Act") makes it clear, Part V of the said Act is not applicable, all the provisions contained in the said enactment except Part V are attracted to the lease in question. Therefore even after termination of tenancy of the defendant by issuing a valid quit notice under Section 106 of the Transfer of Property Act (for short hereinafter referred to as the "T.P. Act") the defendant continues to be a tenant as defined under Section 3(r) of the K.R.C. Act, and what is payable by him to the landlord is the rent agreed prior to the termination and therefore, he does not become a trespasser or a person in unlawful possession or he is liable to pay compensation by way of damages or otherwise. In support of his contention, he relied on a judgment of a Division Bench of this Court in the case of B.S. Giridhar v. P.V. Shetty and a judgment of this Court in the case of Triveni Theatres, Bangalore v. R.S. Devakumar and Anr. and contends that in view of the aforesaid declaration of law by this Court, what the plaintiffs would be entitled to from the defendant after the termination of the tenancy is not mesne profits, but rents only. If that is so, whatever the nomenclature adopted by the plaintiff in his prayer column, the suit will be one for rent and not for either damages or for mesne profits. Therefore, the Small Cause Court has jurisdiction to entertain a suit for ejectment and for rent. The City Civil Court has no jurisdiction to entertain the suit and the order passed by the Trial Court is illegal and is liable to be set aside.
3. Learned Counsel for the respondents submitted that once the tenancy is terminated, under the provisions of the T.P. Act by issue of a notice under Section 106 of the Act, or the tenancy comes to an end by efflux of time, the tenant's possession would become unlawful. The relationship of landlord and tenant comes to an end and the tenant continuing in possession after termination of the tenancy, will be liable to pay damages for use and occupation, whether it would be called as compensation or as mesne profits. A suit for recovery of mesne profits or damages for use and occupation, is in the nature of suit for recovery of interest in such property and such a suit is excepted from the cognizance of the Court of Small Causes. Therefore, the finding recorded by the Court below is correct and legal and it does not call for interference.
4. In view of the rival contentions, the question for consideration before me is:
"To a tenancy to which the KR.C. Act applies, however, to which the Part V of the Act does not apply, what would be the position of the tenant after determination of the tenancy either by termination or by efflux of time?"
5. This question came up for consideration before this Court in the case of B.S. Giridhar, supra, on a reference, as the earlier judgment of this Court was contrary to the subsequent judgments of the Hon'ble Supreme Court. In the said judgment, it has been held as under.-
"11. Section 31 of the Act, exempts the operation of Part V, dealing with "control of eviction of tenants and obligations of landlords" to a non-residential premises, whose monthly rent exceeds Rs. 500.00. The said section cannot be read as providing exemptions from the other provisions of the Act, to this class of premises. The immunity is confined to evictions. Section 2(2) of the Act makes it clear that Parts II and III of the Act shall be applicable to the areas in Schedule I and it exempts the buildings constructed after 1-8-1957 for a period of five years. Section 14 pertaining to fixation of fair rent, occurs in Part III. It applies to all buildings, residential or non-residential, in the areas in Schedule I, except to buildings constructed after 1-8-1957 for a period of five years. This being the only exception, we cannot by implication, introduce another class of exception. Rule of harmonious construction requires that all sections of the enactment must act in their respective spheres and while constructing one provision, violence should not be done to other provisions. Section 31 specifically exempts Part V, to a non-residential building, whose rent exceeds Rs. 500.00 per month. If Mr. Sundarswamy's contention is to be accepted, we will have to read the word 'Act' for the words 'Part V in Section 31, then the non obstante clause in Section 31 would read 'nothing in this Act shall apply to' instead of the existing clause 'nothing in this part shall apply to'. While interpreting a section, we cannot be asked to legislate or rewrite a section. Further, by so doing, we will be adding second exception to Section 2(2) of the Act, which is impermissible. Since the language of Section 31 exempts only Part V and has no application to the other parts in the statute, the interpretations suggested by Mr. Sundarswamy cannot be accepted.
12. Coming to the definition in Section 3 we reiterate our view expressed in K. Abdul Subhan v. A.K. Satyanarayana Setty. The definition mentions three categories of tenants.-
Firstly, any person by whom or on whose account rent is payable; secondly, the surviving spouse or any son or daughter or father or mother of deceased tenant who had been living with the tenant in the premises as a member of the tenant's family up to the death of the tenants; and lastly a person continuing in possession after the termination of the tenancy in his favour.
(emphasis supplied) It follows that notwithstanding the termination of tenancy, the person in possession of the premises would be a 'tenant' and he would be liable to pay rent and exercise the rights given to him, under Section 14 or Section 43 of the Act. His possession would not be unlawful. The fact that under Section 31, one class of tenants are not liable to be evicted under the provisions of the Act, does not take them out of the class of tenants for other purposes. The other rights, obligations and liabilities continue to operate, notwithstanding their immunity from eviction, under Part V of the Act. In this context we reproduce the following observations of the Supreme Court in V. Dhanapal Chettiar v. Yesodai Ammal:
". . . in our opinion, it will suffice to say that the various State Rent Control Acts make a serious encroachment in the field of freedom of contract. It does not permit the landlord to snap his relationship with the tenant merely by his act of serving a notice to quit on him. In spite of the notice, the law says that he continues to be a tenant and he does so enjoying all the rights of a lessee and is at the same time deemed to be under all the liabilities such as payment of rent etc., in accordance with the law".
. . . Clause (8) expressly says that tenant means "a person continuing in possession after the termination of the tenancy in his favour". Section 3 indicated that no landlord can treat the building to have become vacant by merely terminating the contractual tenancy as the tenant still lawfully continues in possession of the premises. The tenancy actually terminates on the passing of the order or decree for eviction and the building falls vacant by his actual eviction. The giving of the notice, therefore, is a mere surplusage and unlike the law under the Transfer of Property Act it does not entitle the landlord to evict the tenant".
6. Therefore, Section 31 of the K.R.C. Act exempts the operation of Part V dealing with control of eviction of tenants and the obligation of the landlords to a non-residential building, the monthly rent of which exceeds Rs. 500.00. The said section does not exclude the application of other parts and provisions of the K.R.C. Act to the lease in respect of non-residential building the monthly rent of which exceeds Rs. 500.00. In view of the definition of tenant, contained in Section 3(r) of the K.R.C. Act, a person continuing in possession after termination of the tenancy in his favour, also would be a tenant. Even after the tenancy of a tenant of a non-residential building the monthly rent of which exceeds Rs. 500.00 terminated, he continues to be a tenant and he is liable to pay the agreed rent to the landlord even after the termination. His position after the termination of the tenancy would not become unlawful and his liability to pay rent does not cease. With the termination of contractual tenancy, statutory tenancy commences under the K.R.C. Act, Therefore, the question of such a tenant paying damages for use and occupation or compensation for use and occupation of the leased premises after the termination of the tenancy or paying mesne profits does not arise, because of the application of the K.R.C. Act. All the other rights and obligations and the liabilities continue to operate under the KR.C. Act.
7. Section 8 of the Karnataka Small Cause Courts Act, 1964 (hereinafter for short referred to as the 'Act') deals with cognizance of suits by Courts of Small Causes. It reads as under.-
"8. Cognizance of suits by Courts of Small Causes.--(1) A Court of Small Causes shall not take cognizance of the suits specified in the schedule as suits excepted from the cognizance of a Court of Small Causes.
(2) Subject to the exception specified in the Schedule and to the provisions of any law for the time being in force, all suits of a civil nature of which the value does not exceed twenty-five thousand rupees shall be cognizable by a Court of Small Causes:
Provided that the State Government, in consultation with the High Court, may by notification, direct that all suits of which the value does not exceed twenty-five thousand rupees shall be cognizable by a Court of Small Causes mentioned in the notification".
8. Section 9 of the said Act speaks about exclusive jurisdiction of Courts of Small Causes and reads as under.-
"9. Exclusive jurisdiction of Courts of Small Causes.--Save as expressly provided by this Act or by any other law for the time being in force, a suit cognizable by a Court of Small Causes shall not be tried by any other Court having jurisdiction within the local limits of the jurisdiction of the Court of Small Causes by which the suit is triable".
Article 4 of the Schedule to the said Act reads as under.-
"4. A suit for the possession of immovable property or for the recovery of an interest in such property but not including a suit for ejectment where-
(a) the property has been let under a lease or permitted to be occupied, by a written instrument or orally; and
(b) the Court of Small Causes would be competent to take cognizance of a suit for the rent of the property; and
(c) the only substantial issue arising for the decision is of the time limited thereby or has been determined by".
9. A reading of the aforesaid provision makes it clear that a Court of Small Causes shall have jurisdiction to try all suits of a civil nature of which the value does not exceed Rs. 25,000.00 and which are not excepted from the cognizance of the Court of Small Causes as contained in the Schedule. Article 4(a) and (b) makes it clear that a suit for ejectment where property has been let under a lease or permitted to be occupied by a written instrument or orally and a suit for the rent of the property shall be cognizable by a Court of Small Causes. Section 9 makes it abundantly clear that a suit cognizable by a Court of Small Causes shall not be tried by any other Court having jurisdiction within the local limits of the jurisdiction of the Court of Small Causes by which the suit is triable, thereby meaning the City Civil Court in Bangalore has no jurisdiction to try such suits which are cognizable by Court of Small Causes.
10. Order 20, Rule 12 of the CPC which deals with decree for possession and mesne profits reads as under.-
"12. Decree for possession and mesne profits.--(1) Where a suit is for the recovery of possession of immovable property and for rent or mesne profits, the Court may pass a decree-
(a) for the possession of the property;
(b) for the rents which have accrued on the property during the period prior to the institution of the suit or directing an inquiry as to such rent;
(ba) for the mesne profits or directing an inquiry as to such mesne profits;
(c) directing an inquiry as to rent or mesne profits from the institution of the suit until-
(i) the delivery of possession to the decree-holder,
(ii) the relinquishment of possession by the judgment-debtor with notice to the decree-holder through the Court, or
(iii) the expiration of three years from the date of the decree, whichever event first occurs.
(2) Where an inquiry is directed under Clause (b) or Clause (c), a final decree in respect of the rent or mesne profits shall be passed in accordance with the result of such inquiry".
11. Rule 12(1)(c) makes it very clear that in a suit for recovery of possession of an immovable property and for rent the Court may pass a decree directing an enquiry as to rent from the institution of the suit until the delivery of possession to the decree-holder or expiration of three years from the date of decree whichever event first occurs and a final decree in respect of the rent shall be passed in accordance with the result of such inquiry.
12. Therefore, when the building has been let under a lease or permitted to be occupied by a written instrument or orally, the owner/landlord of the said premises can maintain a suit for ejectment of the tenant of the premises and also claim for rent of the property after the termination of the tenancy if the building is a non-residential one and the monthly rent of which exceeds Rs. 500.00. Such a suit is cognizable by the Court of Small Causes if the value of the subject-matter of the suit does not exceed Rs. 25,000.00 and no other Court shall try the said suit except the Court of Small Causes. Therefore, the jurisdiction of Bangalore City Civil Court is ousted. Even though tenancy of a tenant of a non-residential building the monthly rent of which exceeds Rs. 500.00 is terminated, all the provisions of the K.R.C. Act of 1961 are applicable to the said building except Part V of the K.R.C. Act and therefore notwithstanding the termination of tenancy the tenant continues in possession after the termination of the tenancy in his favour and is liable to pay the agreed rent prior to termination. On termination of the tenancy he would not become a trespasser. His possession would not be unlawful. He is not liable to pay any compensation or damages for use and occupation. Notwithstanding the nomenclature adopted by the plaintiff in the suit in his prayer column what the defendant has to pay is the rent agreed under the terms of the lease even after termination of the tenancy, as the defendant continues to be a tenant in possession of the premises even after the termination of the tenancy in his favour.
13. In that view of the matter, the finding of the learned City Civil Judge that after termination of the tenancy of the defendant he is liable to pay mesne profits which would be in the nature of recovery of interest in immovable property which is excepted from the jurisdiction of the Court of Small Causes is not correct and accordingly, it is hereby set aside. Hence, I pass the following order:
14. CRP is allowed. The impugned order is set aside and it is held that the suit filed by the plaintiffs against the defendant for damages and for mesne profits after the termination of the tenancy is in the nature of a suit for recovery of rent which is cognizable by the Court of Small Causes. As such, the City Civil Court has no jurisdiction to entertain the suit.
15. Parties to bear their own costs.