Karnataka High Court
Akberali Sons Estate vs The Pen Shop on 18 February, 1995
Equivalent citations: ILR1995KAR1400, 1995(6)KARLJ206
ORDER Bharuka, J.
1. These three Revision Applications have been filed by the landlord against a common order passed in three eviction proceedings brought by them against three tenants occupying different portions of the petition premises (also hereinafter called 'the building'), under Section 21(1)(h) of the Karnataka Rent Control Act, 1961 ('the Act', for short). The grounds of eviction as pleaded by the landlord being common in all the three proceedings being based on personal necessity coupled with requirement of demolition and reconstruction for self-occupation, these eviction proceedings have been disposed of by the Small Causes Court by a common impugned order by holding a common trial.
2. The building according to the evidence on record is now about 80 years old and the rear portion of the same is in a dilapidated condition. Even according to RW-5, a Consulting Engineer, who had deposed in 1983, the building could withstand for another twenty years. Therefore, now the building can sustain hardly for 8 years. It is earning a total rent of Rs. 410/- per month - Rs. 100/- p.m. from the first two tenants and Rs. 210/-p.m. from the third. PW-5, a Consulting Civil Engineer of the landlords, has stated that because of the nature of construction the entire area available in the building cannot be put to its maximum utility. According to him, even alterations in the existing building cannot be of any help. Admittedly the building is situated in the heart of the Bangalore City having great potentiality of being utilised for commercial and residential purposes, if after demolition of the old structure a new building is constructed in a planned manner.
3. The three partners of the petitioner firm, namely Saifuddin (PW-1), Abbas Bhai (PW-2) and Ali Hussain (PW-3), had acquired this property as co-owners each having one-third share pursuant to a Deed of Settlement dated 24.3.1975 (Exhibit P-7) under the name and style 'M/s Akberali Sons Estates'. The object of constituting the a firm as disclosed in Exhibit P-3 is as under:
"3. The business of Partnership shall be - (a) owning and managing the schedule properties;
(b) getting demolished the existing building in the schedule properties by getting the tenants therein vacated and putting up new and additional constructions in the schedule properties and managing the buildings that may be put up in the schedule properties;
(c) putting up new constructions, contributing for the demolition, etc., and dividing the net income from the schedule properties;
(d) acquiring other properties for the partnership and managing them dividing the income from the properties;
(e) purchase and sale of properties moveable and immoveable as and when found necessary as business of the partnership; and
(f) carrying out such other business as may be mutually agreed upon."
The building in question is the only schedule property under the Deed. It is on record that the firm so constituted with three partners (PWs.1 to 3), which has filed the eviction petitions and is the petitioner before this Court, has not conducted any business of any nature so far. It is in order to perpetuate its object as noticed above, got the estimates prepared for demolition and reconstruction (Exhibit P-15 dated 15.3.1980) and obtained sanction of the plan as at Exhibit P-1 and the licence for construction as per Exhibit P-3 dated 6.9.1976.
4. It appears that they having failed to pursuade the tenants to vacate the premises, filed eviction petitions on 9.12.1976 in the Court of Civil Judge at Bangalore which were subsequently transferred to the Small Causes Court. The landlords in order to prove their personal necessity have examined themselves as PWs.1, 2 and 3 respectively. The son of PW-2 has also been examined as PW-4 to substantiate the said fact. It is an admitted fact that the landlords are residing as well as carrying on business in various tenanted premises. This basic fact has not been challenged by respondents even before this Court. PWs.1 and 2 are residing in first and second floors of a building taken by them under two separate Lease Deeds and each of them is paying Rs. 1,000/- per month as rent. To substantiate this fact, the Lease Deeds and rent receipts have been produced as Exhibits P- 16, 17 and 18. PWs.1 and 2 have also deposed that their landlord is pressurising them to vacate the premises tenanted to them since he intends to start, a Nursing Home in the entire building.
5. PW-1 in his evidence has further deposed that the tenanted premises in occupation consist of only three rooms which are too small and there is no attached bath room nor any prayer room. According to him, he is put to much hardship for want of sufficient accommodation since his aged father is also residing with him. According to him, this premises is far away from his place of business thereby causing great inconvenience in attending the business activities. He has stated that keeping in view the necessity of the co-owners, they would demolish the building and reconstruct a new building in its place for use and occupation of their families both for business as well as for residential purposes.
6. Similarly, PW-2 has deposed that the accommodation available to him consists of two rooms, a small room, one hall, a kitchen, bath and store room. He has three sons. At the time of his deposition in 1982. his one son was already married and he was to perform the marriage of another son and the third one was studying, He clearly deposed that the accommodation available to him was not at all sufficient, and it is not possible for them to continue thereon for a long period. He has also deposed that his two elder sons are carrying on business in a tenanted premises as partners in Zenith Hardware Company. He also deposed that for want of proper accommodation he could not get his sons set up independent businesses.
7. PW-3, the third co-owner of the building, has deposed that at present he is carrying on business at Coimbatore in partnership with some other persons. Admittedly, he has no property of his own either at Coimbatore or at Bangalore. He stated that he is living in a tenanted premises at Coimbatore. At the time of giving evidence in 1983 his three sons were still studying in standards 4th, 6th and 7th. According to him he was born and brought up at Bangalore and his all relations are still at Bangalore. He states that if he could get a suitable premises for residence and for carrying on business it was his desire to come back to Bangalore since he is not pulling well with his partners at Coimbatore,
8. From the evidence of the co-owners - PWs, 1, 2 and 3 - it is quite apparent that all of them as co-owners and partners have decided among themselves to demolish the existing building and construct a new structure which may fulfil the requirement of all the three co-owners, both in respect of residence as also for carrying on business. They have unambiguously deposed as to which portion of the building sought to be erected will fall to their respective shares.
9. Despite the pleadings and evidence noticed as above, the Court below has rejected the prayer for evicting the tenants by taking a view that the landlords have failed to prove their reasonable and bona fide requirement for occupation of the building. For coming to this conclusion the reasons assigned by the Court below are ;
(i) There is no imminent threat of the landlords being evicted from the tenanted premises which they are occupying;
(ii) The landlords have failed to prove insufficiency of accommodation in their possession by bringing on record the extent of accommodation available and the number of members in their families.
The Court below was also of the opinion that since the building is now the property of the Partnership Firm, keeping in view the provisions of Section 15 of the Indian Partnership Act, 1922, the plea of necessity of the partners or their family members is not of much avail.
10. In my opinion, refusal to grant eviction on the ground that the landlords have failed to prove their bona fide and reasonable requirement cannot be sustained both on facts and in law. The Court below has committed an error of record in proceeding on the basis that the landlords have led no evidence to prove insufficiency of the accommodation vis-a-vis the members in their families which is evident from the foregoing paragraphs. PWs.1 and 2 who are the most competent witnesses to depose with regard to insufficiency of accommodation in their possession, have clearly spelt out this aspect. No evidence has been produced on behalf of tenants to discredit this stand. Therefore, the Court below had to accept it. Even otherwise the bona fide requirement of even one of the co-owners is enough for granting eviction.
11. Further, to say that the landlord who is residing in tenanted premises cannot ask for eviction from his property for his own use unless he is dragged into litigation by his landlord, is, in my opinion, amounts to too much stretching of the regulatory provisions in favour of tenants. When there is uncontroverted evidence on record to show that the landlord of the premises seeking eviction is insisting for vacating the premises, then it has to be accepted that the plea of personal necessity is genuine and bona fide. Non-examination of the owner of the premises of the building is not of much consequence. Therefore, it cannot be said that the plea of personal necessity of the landlords is a mere desire of occupying the building for their use as opposed to bona fide need. These being the facts, the Decision of this Court in the case of MYSORE CHEMICAL AND BIOLOGICAL AGENCIES AND ORS.. v. J.M.A. AHAMED MOIDEEN AND ORS. 1982(1) KLC 334, as also unreported Judgment in the case of P. GNANOBA RAO AND ORS.. v. N. ARIF SAIT C.R.P.No. 1409 of 1987 DD 18.6.1991, can have no application to the present case since in the said cases this Court on facts had found the plea of personal necessity to be a mere desire and not based on true need.
12. For dealing with the plea of the tenants based on Section 15 of the Indian Partnership Act, 1932, I may first notice the statutory provisions in this regard. These are -
"Section 6. In determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the parties, as shown by all relevant facts taken together.
Explanation 1.- The sharing of profits or of gross returns arising from property by persons holding a joint or common interest in that property does not of itself make such persons partners.
Explanation 2.- (not relevant)."
"Section 15. Subject to contract between the partners, the property of the firm shall be held and used by the partners exclusively for the purpose of the business."
13. In the present case, as noticed above, the partnership firm M/s Akberali Sons Estate was constituted by three co-owners being PWs. 1, 2 and 3 under Exhibit P-3 with the dominant object of dividing the net income from the building. Therefore, notwithstanding the arrangement between them, having termed as Partnership, in view of Section 6 read with Explanation (1) thereof, they cannot be said to be 'partners' in the statutory sense.
14. Now turning to the provisions of Section 15 of the Indian Partnership Act, it provides that subject to the contract between the partners, the property of the firm has to be held and used by the partners exclusively for purposes of the business, At the same time, it is a well settled principle that a firm has no legal existence and the partnership property vests in all the partners; and, in that sense every partner has interest in the property of the Partnership [see ADDANKI NARAYANAPPA AND ANR. v. BHASKARA KRISHNAPPA (DEAD) BY HIS HEIPS AND ORS.] . Therefore, in terms of Section 15 of the Indian Partnership Act, the partnership property can be held and used by the partners for the purpose other than the partnership business provided they have agreed between themselves to that effect. In the present case, as noticed above, all the three partners, namely PWs. 1, 2 and 3 have clearly deposed in their evidence that they have decided among themselves to get the building demolished after seeking eviction and make a new construction thereafter for their use and occupation both for residential as wed as business purposes. The contract entered into between the said partners to this effect cannot be said to be opposed to law. Therefore, in my opinion, the Court below has erred in holding that keeping in view the provisions of Section 15 of the Indian Partnership Act, the co-owners (partners) are not entitled for seeking eviction on the ground of their personal necessity.
15. In the present case, as discussed above, in my opinion, the landlords have successfully proved the plea of their personal necessity by adducing cogent evidence to that effect that -
(i) they are presently residing and carrying on the business in various tenanted premises;
(ii) compared to the number of members in family, the space in the tenanted premises is too insufficient for a reasonably comfortable living;
(iii) there is no premises of their own in Bangalore either to carry on their business or to reside;
(v) their landlord is pressing hard for vacating the premises since he needs the same for his personal occupation;
(vi) compared to the meagre rent of Rs. 410/- which they are receiving from the present building, they themselves have to pay thousands of rupees by way of rent for the tenanted premises under their occupation; and
(vii) the plan for the new construction had been duly sanctioned by the Bangalore Corporation as is evidenced by Exhibit P-1 and they have arranged for finances for the purpose of construction as estimated under Exhibit P-15.
16. Mr. Tarakaram, learned Counsel appearing for one of the tenants has submitted that the sanction of the plan has lapsed in view of Section 306 of the Karnataka Municipal Corporation Act; and, since the same has not been renewed, according to him. the bona fide of the landlords cannot be accepted. This has been aptly replied by the learned Counsel appearing for the landlords that because of the protracted proceedings it would have been imprudent to spend time, money and energy for getting the permission/sanction of the plan alive through repeated renewals during the whole uncertain length of litigation. It is stated that only because of the lapse of permission, the need of the landlord, or their bona fide cannot be disbelieved. In my opinion, the explanation given on behalf of the landlords is quite reasonable and has to be accepted.
17. It was also contended by Mr. Tarakaram that the area in which the building is situated is a commercial area and therefore neither the existing building nor any new construction which could be brought in its place can be used for residential purposes. This submission, in my opinion, does not merit any consideration because there is no legal, bar for use of either the existing building or the proposed building for residential purposes either wholly or partly. As a matter of fact, as is apparent from the plan sanctioned by the Corporation Exhibit P-1, the proposed building is intended to be used partially for residential and partly for business purposes.
18. In the case of SRI RAM PASRICHA v. JAGANNATH AND ORS., , it has been held that if a building which is being used for non-residential purposes, is capable of being used for residential purposes, there cannot be any bar to such user of the building.
19. Keeping in view these facts and the rival contentions, I am clearly of the opinion that the co-owners of the building have successfully made out a case for eviction based on personal necessity as envisaged under Clause (h) of the Proviso to Section 21(1) of the Act. The tenants have filed an application bringing on record the fact that one of the sons of the co-tenants has constructed his own house and submitted that the plea of necessity therefore cannot be sustained. In my opinion, this fact by itself cannot negative the plea of necessity of the three co-owners because admittedly neither of the three co-owners can as a matter of right use and occupy the said building.
20. The last limb of the contentions raised at the bar is based on the question as to whether the necessity pleaded by the landlords for demolition of the present building for erecting a new building for their use and occupation will fall under Clause (h) or (j) of the Proviso to Section 21(1) of the Act thereby attracting Section 26 of the Act. For appreciating the question raised it is necessary to quote the relevant provisions of the Act which are to the following effect:
Sections 21. Protection of tenants against eviction - (1) Notwithstanding anything to the contrary contained in any other law or contract, no order or decree for the recovery of possession of any premises shall be made by any court or other authority in favour of the landlord against the tenant:
Provided that the court may on an application made to it, make an order for recovery of possession of a premises on one or more of the following grounds only, namely :
(a) to (g) xxx xxx xxx
(h) that the premises are reasonably and bona fide required by the landlord for occupation by himself or any person for whose benefit the premises are held or where the landlord is a trustee of a public charitable trust that, the premises are required for occupation for the purposes of trust; or
(i) xxx xxx xxx
(j) that the premises are reasonably and bona fide required by the landlord for the immediate purpose of demolishing them and such demolition is to be made for the purpose of erecting a new building in place of the premises sought to be demolished; or xxx xxx xxx "Section 26 : Recovery of possession for demolishing building and re-entry.-
(1) Where a decree for eviction has been passed by the Court on the ground specified in Clause (j) of the proviso to Sub-section (1) of Section 21 and the work of demolishing the premises has not been commenced by the landlord within the period specified in the decree, the tenant may give the landlord a notice of his intention to occupy the premises from which he has been evicted and if the landlord does not forthwith deliver to him vacant possession of the premises on the same terms and conditions on which he occupied them immediately before eviction, the tenant may make an application to the Court within six weeks from the date of expiry of the period specified in the decree.
(2) If the Court is satisfied that the landlord has not substantially commenced the work of demolishing the premises within the period of one month in accordance with his undertaking, the Court shall order the landlord to deliver to the tenant vacant possession of the premises on the terms and conditions on which he occupied it immediately before the eviction. On such order being made, the landlord shall forthwith deliver vacant possession of the premises to the tenant. Such order shall be deemed to be an order within the meaning of Clause (14) of Section 2 of the Code of Civil Procedure, 1908.
(3) Any landlord who recovers possession on the ground specified in Clause (j) of the proviso to Sub-section (1) of Section 21 and fails to demolish and construct a new building without any reasonable excuse, or fails to comply with the order of the Court under Sub-section (2), shall, without prejudice to his liability in execution of the order under Sub-section (2), on conviction be punished with fine which may extent to five hundred rupees."
21. In the case of SMT. ROHINIBAI v. VISHNUMURTHY ILR (Kar) 1980 (1) 340, the Division Bench of this Court had an occasion of examining the respective scope and extent of clauses (h) and (j) of Section 21(1) of the Act. The Division Bench on detailed consideration of the relevant provisions and the earlier Decisions on the point and placing reliance on Ramnilal Mehta & Indradaman has held thus:
"4. It is no doubt true that clauses (h) and (j) of Sub-section (1) of Section 21 are mutually exclusive, Even so we do not find any force in the submission made for the petitioners for the reason that for getting an order of eviction on the ground mentioned in Clause (h) of Section 21(1) it may be necessary in a given case for the landlord to plead that he requires the premises for his bona fide use and occupation and for that purpose, after taking possession, it is necessary for him to demolish the existing premises and to construct a new premises to suit his own requirement. The demolition and reconstruction of a premises for his own use and occupation after getting an order of eviction clearly falls under Clause fh) of Section 21(1) and not under Clause (j)."
In paragraph 7 of the said Judgment, it has been further held thus:
"7. ... ... In the nature of things the scope of Clause (h) is entirely different from Clause (j). Therefore, there could not be an order, of eviction on both the grounds specified in clauses (h) and (j). It is for this reason, they are mutually exclusive but this does not mean, that a landlord seeking eviction on the grounds mentioned in Clause (h) cannot plead that he wants to occupy the premises after demolition and reconstruction, and that by taking such a plea the case goes outside the scope of Clause (h) and falls under Clause (j). It is only a case, in which a landlord seeks eviction only for demolition and reconstruction and not for self-occupation also, which falls under Clause (j). Such a case attracts the restrictions contained in sections 26, 27 and 28 of the Act."
22. In the case of Ramnilal Mehta v. Indradaman6 (supra) was one arose under the Bombay Rents, Hotel and Lodging House, Rates Control Act (57 of 1947) in which eviction was sought under Section 13(1)(g) and (h) which corresponds to clauses (h) and (j) of the Proviso to Section 21(1) of the present Act. In that case it was held that once the landlord establishes his bona fide requirement in respect of the premises for his occupation, he is entitled to recover possession of from the tenant under the provisions of Section 13(1)(g) irrespective of the fact whether he would occupy the premises without making any alteration or after making necessary alteration. This Judgment has been relied by the Supreme Court in its later judgments in the case of Radhey Shyam, Etc. Etc. V. Kalyan Mal, Etc . The Decision in Radhey Shyam's case7 (supra) and that in ARYA SAMAJ SAGAR AND ORS. v. PINJAMAL AND ANR. , arose out of Madhya Pradesh Accommodation Control Act. 1961. Similar view has been taken by the Supreme Court in the case of MASOOD AHMED v. THE RENT CONTROL AND EVICTION OFFICER, KANPUR AND ORS. , which had arisen under the U.P.Temporary Control of Rent and Eviction Act (3 of 1947).
23. Keeping in view the facts as found above and the attendant law, it has to be held that the necessity of the landlords of demolishing the present building for reconstruction befitting their personal need of self-occupation, will fall under Clause (h) of Section 21(1) of the Act entitling them to seek eviction as prayed for. Coming to the question I of comparative hardship, keeping in view the facts like the extent of accommodation available to the three co-owners for their residential and business purposes, the pressure of their landlords for vacating the premises held by them, the exorbitant rents they are presently paying, and on the other hand the tenants not pleading and proving that they cannot get suitable alternative premises for carrying on their business, in my opinion, the hardship will be more of the landlords than that of the tenants, if eviction is not ordered. Further, keeping in view the personal requirement of the three co-owners and their family members, as also the dilapidated condition of the building, it needs to be completely demolished. The plea of partial eviction therefore becomes irrelevant.
24. Accordingly, I hold that the Court below has acted illegally in not granting eviction. Therefore, the impugned judgment are set aside, All the three Revision Petitions are allowed. Tenants are directed to vacate the premises by 31st July 1995. Parties to bear their own costs.