Karnataka High Court
Moca vs Morzaria Products (P) Ltd. on 1 August, 1990
Equivalent citations: ILR1991KAR1492
JUDGMENT K.A. Swami, J.
1. This appeal is preferred against the Judgment and Decree dated 23rd July 1979 passed in Original Suit No. 628/1976 by the 6th Additional Civil Judge, Bangalore City.
2. The appellants are defendants 1 to 4 and respondent is the plaintiff.
3. The trial Court has decreed the suit for ejectment of the appellants/defendants and for recovery of a sum of Rs. 5003.50 and also for damages of Rs. 2,369/- per month from 14-10-1976 to the end of January 1978.
4. During the pendency of the suit the defendants/appellants handed over the possession of the suit schedule properties by depositing the key of the premises in the Court on 9-1-1978 and the Court after hearing both sides handed over the key of the premises on 2-2-1978 to the landlord. This appeal is only confined to that part of the decree by which the defendants have been directed to pay a sum of Rs. 5003.50 for the period from 1-7-1976 to 13-10-1976 and damages of Rs. 2,369/- p.m. from 14-10-1976 to the end of January 1978.
5. It is not in dispute that the premises in question was leased to the defendants under a registered lease deed dated 19-10-1971 -Ex.P-1 effective from 1-9-1971 on a rent of Rs. 710/- p.m. According to the terms of the lease deed, the lease was initially for a period of five years and an option was given to the defendants to seek renewal of the lease for the next five years on a rent of Rs. 855/- p.m. and also for a further period of five years at the rate of Rs. 1026/- p.m. three months before the expiry of the period of five years.
6. Before the expiry of the period of first five years, according to the case of the defendants they exercised the option by issuing notice dated 14-5-1976. The request made in the notice was not acceded to by the respondent/plaintiff. The defendants sent another request dated 29-7-1976 which was also not acceded to.
7. The respondent/plaintiff filed the aforesaid suit on 14-10-1976 for recovery of possession of the suit schedule properties on the ground that the lease stood determined on the expiry of five years from 1-9-1971. The plaintiff also prayed for recovery of arrears of rent at the rate of Rs. 710/- p.m. from 1-7-1976 to 14-10-1976 and for damages at the rate of Rs. 2,369/- p.m.
8. Though the defendants filed the written statement resisting the suit but, as pointed out earlier, during the pendency of the suit they delivered the key of the suit schedule premises to the Court on 9-1-1978 and ultimately the key of the premises was handed over to the respondent/plaintiff by the Court by its order dated 2-2-1978. The defendants also submitted that as the possession had been handed over, the suit for recovery of arrears of rent at the rate of Rs. 710/-p.m. from 1-7-1976 may be decreed. As the plaintiffs had claimed not only arrears of rent but also mesne profits at the rate of 2,369/- p.m. the Court was required to determine the claim made by the plaintiff. Therefore, the trial Court raised the following issues:
"1. Does plaintiff prove that defendant is in arrears of rent to the tune of Rs. 1,450/-?
2. Is the plaintiff entitled to damages for the use and occupation at Rs. 2,369/- per month as claimed by him in para 6 of the plaint?
3. Is the plaintiff further entitled to damages for use and occupation at Rs. 2,369/- per month as claimed by him in para 6 of the plaint?
4. Is termination of tenancy valid?
5. Do the defendants prove that they are entitled for renewal of lease as stated in para 2 of the written statement?
6. Does the plaintiff prove that it is entitled for possession of the suit schedule property?
7. To what relief the plaintiff is entitled?" 9. It also recorded the findings on the aforesaid issues as follows:-
"Issue No. 1:- In the affirmative. Plaint has proved that the defendant is in arrears of rent to a tune of Rs. 1,450/-.
Issue No. 2:- In the affirmative. Plaintiff is entitled to damages for use and occupation to tune of Rs. 3,553,50 ps. as claimed in para VI of the plaint.
Issue No. 3:- In the affirmative. Plaintiff is further entitled to damages for use and occupation of Rs. 2,369/- per month from 14-10-1976 to the end of January 1978.
Issue No. 4:- In the affirmative. The termination of the tenancy is valid.
Issue No. 5:- This issue does not survive as the defendants have vacated the suit schedule property during the pendency of the suit.
Issue No. 6:- This issue does not survive as the defendants have vacated the suit schedule property during the pendency of the suit.
Issue No. 7:- The suit of the plaintiff is decreed for Rs. 5,003.50 ps. as prayed for. Further, the plaintiff is also entitled for damages at Rs. 2,369/- per month from 14-10-1976 to the end of January 1978."
9.1. In the light of the contentions urged on both the sides the following point arises for consideration:
"Whether the Trial Court is justified in law in passing a decree for mesne profits?"
10. Sri Shekar Shetty, learned Counsel appearing for the appellants/defendants submits that even though the lease was outside the purview of Part V of the Karnataka Rent Control Act, 1961 (hereinafter referred to as 'the Act') it was nevertheless governed by the provisions contained in the other parts of the Act therefore, even after termination the tenancy by reason of effluxion of the period of lease or otherwise by termination as long as defendants continued to be in possession of the premises and such possession was not unlawful because of the definition of the expression "tenant" which includes a person continuing in possession even after the termination of tenancy continues to be lawful and in the case of lawful possession the question of payment of mense profits does not arise and it is only the rent at the rate agreed by the parties has to be paid hence, the decree passed by the Trial Court to the extent it awards mesne profits is illegal.
11. On the contrary, Sri Tarakaram, learned Counsel appearing for the plaintiff submits that as the lease was outside the purview of Part V of the Act and the definition of the expression "tenant" as contained in Part I of the Act is also not applicable because Section 3 opens with the words "unless the context otherwise requires" therefore as the suit is for ejectment of the tenant on termination of the lease, in this context the definition of the expression "tenant" as contained in the Act is not attracted therefore, the mesne profits as decreed by the Trial Court is in accordance with law.
12. We are of the view that it is not possible to accept the contention of Sri Tarakaram, learned Counsel for the plaintiff.
13. No doubt Section 31 of the Act as long as it was on the statute book excluded the non-residential buildings the monthly rent of which exceeded 500 Rupees or the annual rental value of which exceeded 6000 Rupees from the purview of Part V of the Act. This provision was struck down by this Court in H. PADMANABHA RAO v. STATE OF KARNATAKA decided on 1.7.1986. The provision was struck down with effect from 1.7.1986 because the said provision though initially was valid, but by reason of the appreciation in the value of the immoveable properties it has ceased to have a nexus with the object of the Act. Therefore, this Court struck down as being violative of Article 14 of the Constitution, following the decisions of the Supreme Court in RATTAN ARYA v. STATE OF TAMIL NADU ILR 1986 KAR 2069 and MOTOR GENERAL TRADERS v. STATE OF ANDHRA PRADESH. AIR 1984 SC 1987 Thus, from 1.7.1986 Section 31 of the Act has ceased to be on the statute book. The period with which we are concerned is prior to 1.7.1986. Thus, Section 31 was operative during the period with which we are concerned but in our view the operation of Section 31 and the application of the same to the lease in question did not make any difference because the non-residential building in question was exempted only from the purview of Part V of the Act relating to control of eviction of tenants and obligation of landlord, the other provisions of the Act continued to apply.
13.1 The definition of the expression tenant occurs in Part I of the Act which reads thus:
"tenant" means any person by whom or on whose account rent is payable for a premises and includes the surviving spouse or any son or daughter or father or mother of a deceased tenant who had been living with the tenant in the premises as a member of the tenant's family upto the death of the tenant and a person continuing in the possession after the termination of the tenancy in his favour, but does not include a person placed in occupation of a premises by its tenant or a person to whom the collection of rents or fees in a public market, cart-stand or slaughter house or of rents for shops has been framed out or leased by a local authority."
Therefore, from the aforesaid definition it is clear that even after the termination of the tenancy the person continuing in possession is included in the definition of the word "tenant". In the instant case it is not in dispute that the termination of the tenancy took place on 31-8-1976 - the date on which the period of first five years expired, and thereafter the respondent/landlord refused to renew the lease. The defendants continued to remain in possession even after termination of the tenancy and they handed over the key of the premises to the Court on 9-1-1978. As the continuation of the defendants in possession was lawful having regard to the definition of the word 'tenant' it is not possible to hold that the defendants were liable to pay mesne profits. In this context, to elucidate the point more clearly that the possession of the defendants after the termination of the tenancy was lawful we may refer to a decision of the Supreme Court in MANI SUBRAT JAIN v. RAJA RAM VOHRA. In that case, the Supreme Court considered the provisions of East Punjab Urban Rent Restriction Act, 1959. The aforesaid Punjab Urban Rent Restriction Act contained the similar words in the definition of the word tenant as contained in the Act with which we are concerned. While cnsidering the effect scope and ambit, of that definition the Supreme Court has held as follows:
"It is too platitudinous to preach and too entrenched to shake, the proposition that rent control legislation in a country of terrible accommodation shortage is a beneficial measure whose construction must be liberal enough to fulfil the statutory purpose and not frustrate it. So construed, the benefit of interpretative doubt belongs to the potential evictee unless the language is plain and provides for eviction. That intendment must by interpretation be effectuated. This is the essence of rent control jurisprudence.
Section 2(1) reads:
"tenant" means any person by whom or on whose account rent is payable for a building or rented land and includes a tenant continuing in possession after the termination of the tenancy in his favour, but does not include a person placed in occupation of a building or rented land by its tenant, unless with the consent in writing of the landlord or a person to whom the collection of rent or foes in a public market, card-stand or slaughter house or of rents for shops has been framed out or leased by a municipal, town or notified area committee;
In this context, we may also read Section 13(1) which is integral to and makes impact upon the meaning of Section 2(i) even if there be any marginal obscurity.
13. Eviction of tenants - (1) A tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of this Act or otherwise and whether before or after the termination the tenancy, except in accordance with the provisions of this Section, or in pursuance of an order made under Section 13 of the Punjab Urban Rent Restriction Act, 1947, as subsequently amended, The expression 'tenant' includes a tenant continuing in possession after the termination of the tenancy in his favour, it thus includes, by express provision, a quondam tenant whose nexus with the property is continuance in possession. The fact that a decree or any other process extinguishes the tenancy under the general law of real property does not terminate the status of a tenant under the Act having regard to the carefully drawn inclusive clause. Even here, we may mention by way of contrast that Subudhi's case (supra) related to a statute where the definition in Section 2(5) of that Act expressly included "any person against whom a suit for ejectment is pending in a Court of competent jurisdiction" and more pertinent to the point specifically excluded "a person against whom a decree or order for eviction has been made by such a Court." We feel no difficulty in holding that the text, reinforced by the context, especially Section 13, convincingly includes ex-tenants against whom decrees for eviction might have been passed, whether on compromise or otherwise. The effect of the compromise decree in Counsel's submission, is that the tenancy has been terminated. Nobody has a case that the appellant is not continuously in possession. The conclusion is inevitable that ho remains a tenant and enjoys immunity under Section 13(1). The execution proceedings must, therefore, fail because the statutory road block cannot be removed. Indeed, an application under the Act was filed by the landlord-defendant which was dismissed because the ground required by the Act was not made out."
14. A Division Bench of this Court also in B.S. GIRIDHAR v. P.V. SHETTY, has held that even after the contractual termination of the tenancy the other parts of the Act continue to apply. The case on hand is only concerned with the question as to whether the possession of a quondam tenant continuing in possession of the premises after the termination of the lease is lawful or not? We are not concerned with the other provisions of the Act contained in other Parts other than Part V. Therefore, we have only referred the aforesaid Decision in B.S. Giridhar's case in so far it is applicable to the case on hand and we shall not be taken to have considered the aforesaid Decision and agreed with the view on other questions expressed therein. Thus, it is clear that after the termination of the tenancy the possession of the defendants was not unlawful. That being so, they were not liable to pay mesne profits. They were liable to pay only the rent at the rate of Rs. 710/- p.m. as agreed in the lease deed Ex.P-1. Consequently, it follows that the decree passed by the trial Court for mesne profits is liable to be set aside. Accordingly, the point raised for determination is answered in the negative.
15. For the reasons stated above, this Appeal is allowed in part. The Judgment and Decree of the trial Court in so far decreed the suit of the plaintiff against the defendants to pay a sum of Rs. 5003-50 and Rs. 2,369/- p.m. from 14-10-1976 till the end of January 1978 are substituted by the decree that the plaintiffs shall be entitled to the arrears of rent from 1-7-1976 till 31-1-1978 at the rate of Rs. 710/-p.m. In the facts and circumstances of the case both the sides are directed to bear their costs throughout.