Madras High Court
Hajee Sir Ismail Sait Wakf Estate ... vs F.J. Irani And Ors. on 25 July, 2007
Author: M. Chockalingam
Bench: M. Chockalingam
ORDER M. Chockalingam, J.
1. This revision has arisen from the judgment of the Rent Control Appellate Authority, namely the VIII Judge, Court of Small Causes, Madras, in RCA No. 336 of 2001 whereby the order of the Rent Controller namely the XI Judge, Court of Small Causes, Madras, in RCOP No. 665 of 1997, a petition for fixation of fair rent, was reversed, and the petition was dismissed. Challenge is made by the landlords herein on the order of the appellate authority.
2. The Court heard the learned Counsel on either side.
3. The said RCOP was filed by a trust called Hajee Sir Ismail Sait Wakf Estate, by its Trustees alleging that the property more fully described in the Schedule, annexed to the petition, belonged to the trust; that the respondents are the tenants in respect of the premises along with the land mentioned therein; that they have been making a payment of Rs. 3,000/- as rental; that subsequently, there was a registered lease deed entered into on 9.8.1974; that they have been carrying on a Cinema Theatre; that originally, there was an application filed for fixation of fair rent; that one of the respondents therein died; that an application to add the legal representatives was filed; that both the applications were dismissed; that since that application was not decided on the merits of the matter, it would not operate as a res-judicata, and thus, the instant petition could be maintained; that the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act are applicable to the premises in question; that the area covered by RCC roof is 6954.5 sq. ft.; that the area covered by AC Sheet roof is 8578.13 sq. ft., and the area covered by Tiled roof is 111 sq. ft.; that taking into consideration the cost of the land per ground of 2400 sq. ft. at Rs. 37.50 lakhs and also taking into consideration the value of the property and the other material factors as required under the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, the fair rent could be Rs. 3,45,494.57 per mensem, and hence, it was to be fixed.
4. The first respondent herein namely fourth respondent in the RCOP, was the person who really contested the petition among others, stating that he was in management of the entire property; that there was a lease deed entered into between the parties; that originally J.H. Irani, the father of the first respondent, entered into a lease deed on 17.2.1943; that it was only in respect of the vacant site including the land in relation to the subject matter; that it was for a period of 21 years from 1940; that in 1961, it was extended for a further period of 10 years, and thus, it came to an end in 1971; that certain clauses were included in the lease deed, which were contrary to the actual state of affairs; that they were expropriatory in nature; that it was actually included only by way of undue influence and coercion in order to get the same executed by the lessee; that the lessee under threat of immediate eviction, had no other go but to subscribe to the lease deed; that in 1948, J.H.Irani died leaving behind him the legal heirs namely wife and three sons including the first respondent, and two daughters also; that now, it is under the management of the first respondent; that the petitioners called upon the heirs of the said Irani to surrender possession of the theatre in pursuance of the Clauses referred therein; but, the heirs have actually refused; that pursuant to the negotiations that took place between the parties, the landlord filed C.S. No. 69 of 1972 on the file of this Court, for recording a compromise for continuation of lease; that a consent order was also passed on 9.8.1974, wherein it is found that the Theatre is also included as a subject matter of the lease; but, this was actually done only for the purpose of continuation of the lease; that further, at no point of time, the possession of the property was surrendered; but, it continues to be with the lessee; that apart from that, pending the same, Section 12 of the Tamil Nadu City Tenants Protection Act was amended whereby the conditions stipulated in any lease deed with reference to the ownership of the building put up by the tenant, would be invalid, and the tenant will continue to be entitled to the benefits of the Act; that originally, the lease was in respect of the vacant site only; that as could be seen from the documents entered into between the parties, the construction was made by Irani and other respondents; that under the circumstances, no petition for fixation of fair rent could be entertained; that apart from that, in view of the factual position, the petition itself was not maintainable, and hence, it was to be dismissed.
5. The learned Rent Controller took the matter for enquiry and passed an order whereby the fair rent was fixed at Rs. 2,59,217/-. Aggrieved over the said order, the respondents took it on appeal in RCA referred to above. The appellate forum took the view that the petition could not be maintained since the property which was leased out, was only a vacant site, and hence, the Rent Controller has no jurisdiction to entertain the petition, and allowed the appeal dismissing the RCOP filed by the revision petitioners herein. Under the circumstances, this revision has arisen before this Court.
6. In support of the revision petition, the learned Counsel for the petitioners would submit that in the instant case, the Rent Controller on appreciation of the documentary evidence and the circumstances, has come to the correct conclusion that the property which was leased out, was not only a vacant site, but also the building and the premises as envisaged under the Tamil Nadu Buildings (Lease and Rent Control) Act; that under the circumstances, it is a fit case where the Rent Controller had got jurisdiction, and it has also fixed the fair rent after taking into consideration the relevant factors as required under the Act, and hence, the order should not have been reversed by the appellate forum; that the appellate forum while allowing the appeal, has not taken into consideration that even as per the documents entered into, it would be quite clear that what was originally leased out, was not only a vacant site, but also the English warehouse which was situated in the building, and this itself would suffice to conclude that it was the premises as one required under the provisions of the Act; that it is true that RCOP No. 2415/85 was filed; but, the same was dismissed along with the application to add the legal representatives of Irani; that it would be quite clear that the said main RCOP was not decided on the merits of the matter, and thus, it would not operate as a res-judicata; and that the appellate authority has not taken into consideration the legal position, but has been carried away as if it would operate as res-judicata.
7. Added further the learned Counsel that the Tamil Nadu City Tenants Protection Act is not applicable to the present facts of the case; that all the rulings were placed before the forum below; but, they have not been considered; that even R.W.1 has well admitted that the English warehouse together with the vacant site was given; that this has completely escaped the site of the appellate forum; that in the instant case, there was a suit filed in C.S. No. 69 of 1972 wherein a compromise was recorded between the parties; that the said compromise would clearly indicate that the property what was leased out, was the Theatre along with the buildings and all other structures there; that pursuant to the original lease deed, it was continued; that after the lease period was over, the instant petition has been brought forth; that added circumstance was that the tenants have also filed a suit in C.S. No. 1215 of 1995 for the purchase of the property which is now pending; that under the circumstances, neither the provisions of the Tamil Nadu City Tenants Protection Act would apply, nor they could claim that they are entitled to the benefits of the same; that on the contrary, the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act are applicable in view of the agreements entered into between the parties; and that under the circumstances, the appellate authority has miserably failed to consider the above aspects of the matter.
8.The learned Counsel would further add that in the instant case, the Rent Controller has jurisdiction to entertain the petition and hence, passed an order fixing the fair rent; that if this Court comes to the conclusion in the revision that the RCOP is maintainable, instead of sending the matter to the appellate forum by remand for the purpose of fixing the fair rent and also instead of driving the parties to agitate their case in future, it would be fit and proper that it can be decided by this Court, and orders could be passed since sufficient materials are available before this Court.
9. In support of his contentions, the learned Counsel relied on the following decisions:
(i) 1975-1-MLJ 16 (Adhu v. V.M. Palaniswamy Gounder);
(ii) (Haridas Girdharidas and Ors. v. M. Varadaraja Pillai and Anr.);
(iii) (Chelladurai and Anr. v. Paramanand Jindal);
(iv) (Kewal Singh v. Lajwanti);
(v) 100 L.W. 86 (Sivaperumal v. NLS Seethalakshmi Ammal (Died) and Two Ors.); and
(vi) (A. Rangaswamy Naidu v. B.V. Venkatalakshmi Ammal and Anr.).
10. Contrary to the above contentions, the learned Counsel for the respondents would submit that in the instant case, the Rent Control Appellate Authority has rightly rejected the claim of the revision petitioners; that as could be seen from the available materials, what was originally leased out was only a vacant site; that even the English warehouse which is mentioned in the lease deed of 1943, has been subsequently surrendered; and that it would be quite clear that the alleged warehouse was not available in the subsequent period. Added further the learned Counsel that even those Clauses were added in the lease deed of 1943 because of the circumstances, and thus, it could not be given effect to; that it is true that the revision petitioners have filed a suit in 1972, in which a compromise has been entered into; that all the documents entered into between the parties, and the compromise would also recite that what was leased out was only a vacant site; that either the Clauses found in the agreement, or the Clauses in the decree would not bind the party in view of Section 12 of the Tamil Nadu City Tenants Protection Act; that the respondents who are the lessees and not tenants, are entitled to have the benefits of the Act; that they have also filed a suit originally for purchase of the property; that the same is also pending; and that under the circumstances, the appellate authority was perfectly correct in taking into consideration the legal position and also by an elaborate and reasoned order, found that what was given was only a vacant site and nothing more.
11. Added further the learned Counsel that there was a clear admission by P.W.1 that all the constructions have been made by the respondents; that under the circumstances, it would be quite clear that the Rent Controller is ousted the jurisdiction; that in such circumstances, no question of allowing the petition for fixation of fair rent would arise; that the order of the Rent Controller was rightly set aside, and hence, the revision requires an order of dismissal in the hands of this Court.
12. The Court paid its anxious consideration on the submissions made.
13. As could be seen above, it was a petition for fixation of fair rent by the landlord, a private trust, against the respondents-tenants. The Rent Controller entertained the petition since she was of the view that she has got jurisdiction to proceed with the matter for the reason that what was leased out was the buildings and the premises as envisaged under the Act, and on the materials available, she fixed the fair rent. The appellate forum reversed the said decision and has taken the view that it was only a vacant site what was leased out; that there was no superstructure at all, and under such circumstances, the Rent Controller has no jurisdiction, and thus, the petition was not maintainable. In such circumstances, this revision has arisen before this Court.
14. Now, the main question that would revolve upon in this revision would be whether the property originally leased out, was the premises as put forth by the revision petitioners/landlords, or a vacant site as put forth by the respondents/tenants. After looking into the materials available including all the documents entered into between the parties, and also after careful consideration of the rival submissions made, this Court is of the considered opinion that the property in question is the buildings and the premises as described under the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act. The following circumstances are noticed by this Court in order to hold so.
15. It is not in controversy that a lease deed was entered into by one J.H. Irani, the father of the fourth respondent, and other respondents on the one part and the Trustees of the private trust on the other part, on 17.2.1943. Clauses 3(d), (e) and (m) of the said lease deed read thus:
3(d) The Lessee has at his own cost effected improvements to the buildings known as the "English Ware House" and has also erected a pucca first class Talkie House and buildings appurtenant thereto on the vacant plot hereby demised;
(e) All Theatre or other buildings that have been erected or constructed by the Lessee and any other buildings that may be erected hereafter shall be maintained at the Lessee's own cost in good and substantial repair and condition and shall at the conclusion of the Lease belong to and be delivered over to the Lessors and the Lessee shall not be entitled to claim any compensation in respect of such Theatre and other buildings;....
(m) On the expiry of the Lease period or sooner determination thereof, the Lessee shall deliver up to the Lessors the buildings now existing or hereafter to be erected by the Lessee together with the Lessors' fixtures, in the main buildings (other than the machinery, fixtures, fittings etc., mentioned in 3(f) supra and the furniture brought on the demised property) at the Lessee's own cost in such a state of repair and condition as shall be in accordance with the Lessee's covenants hereinbefore mentioned.
16. Originally, the lease was for 21 years from 1940 to 1961, and it was further extended for a period of 10 years, which ended in 1971. A reading of the above clauses would clearly indicate that what was originally leased out was not a vacant site, but along with a warehouse. R.W.1 has categorically admitted that the property what was originally leased out, would include a warehouse also in 1972. After the death of J.H. Irani in 1948, these respondents have come into picture. The first respondent herein was also a party to the proceedings thereafter initiated and pending between the parties. There was a suit filed by the landlord in C.S. No. 69/72 for recording a compromise for the continuation of the lease. It is not a fact in dispute that the contesting respondent was also a party therein. On 9.8.1974, a consent decree came to be passed by this Court in the said suit, pursuant to which a lease deed was entered into between the parties. It is clearly mentioned in Clauses 1, 3(a), (d), (e) and 4(e) as follows:
1. In consideration of the deposit herein mentioned and the rents hereinafter reserved and the conditions herein contained and to be observed and performed by the Lessees, the Lessors hereby demise unto the Lessees by way of lease, and the Lessees hereby accept the Lease of the Casino Theatre and the Buildings and the premises of the extent of 14 grounds and 1116 sq. ft. coloured yellow in the plan annexed hereto and more particularly described in the Schedule hereunder written and referred to hereinafter as "the demised Casino Theatre, Building and Premises" for a period of 15 years commencing from 1.1.1972 and terminating with 31.12.1986 on a rent of Rs. 3000/- per month....
3(a). The Lessees shall pay to the Lessor the monthly rent of Rs. 3000/- (Rupees Three Thousand only) for the entire period of Lease, each month's rent being payable on or before the 10th of the succeeding month.
(d). The lessees shall permit the Lessor and their agents at all reasonable times, after previous notice in writing, to enter and view the state and condition of the demised Casino Theatre Buildings and premises, except during working hours.
(e). The Lessees shall, at the conclusion of the Lease on the expiry of the period of lease, peacefully quit and deliver vacant possession of the demised Casino Theatre Buildings and premises to the Lessors.
4(e). The Lessors hereby grant the Lessees the option of extending the lease for a further period of 10 years from 1.1.1987 to 31.12.1996 on payment of rent of Rs. 3,500/- per month instead of Rs. 3,000/- per month and otherwise on the same term and conditions of lease as hereinbefore mentioned and the option shall be deemed to be exercised by the lessees giving a notice in writing of their intention to extend the lease at any time on or before 30.9.1996.
17. A reading of the above clauses would clearly indicate that what was taken on lease by the respondents herein as recorded in the consent decree, was the Casino Theatre and the buildings and the premises having an extent of 14 grounds and 1116 sq. ft. At this juncture, it remains to be stated that there is a Clause as found therein that the lessee shall permit the lessor and their agents at all reasonable times after a previous notice in writing, to enter and view the state and conditions of the demised Casino Theatre, buildings and premises except during working hours. This Clause specifically would indicate that the lessors, who are the landlords, were given a right to make inspection of the Theatre and also the buildings and the premises of Casino Theatre. It has been further agreed in the compromise that after the lease period was over, the lessee shall peacefully quit and deliver vacant possession of the demised Casino Theatre, buildings and premises to the lessor. It is not in controversy that the lease was extended for a further period of 10 years therefrom, and now, the rent was also raised from Rs. 3,000/- to Rs. 3,500/- on the same terms and conditions of lease. Thus, the contentions raised by the learned Counsel for the petitioners-landlords that what was leased out is actually the Casino Theatre with buildings and the premises is thoroughly fortified by the Clauses as found not only in the original documents of lease entered into between the parties, but also in the subsequent documents entered into which also culminated by way of a compromise decree in C.S. No. 69/72.
18. Now, the contention put forth by the respondents' side that all the Clauses which were made in 1943, referred to above, were actually included by use of the undue influence and coercion and also by compelled circumstances has got to be negatived for more reasons than one. In the lease deed of 1943, the present respondents were not parties, and one J.H. Irani and others were parties. The said J.H. Irani died in 1948. Till his life time, he never questioned that the lease deed was entered into by coercion, undue influence and threat and also by compelled circumstances, and thus, it was invalid by any one of the invalidating factors now stated by the respondents. The earlier lease period made in the lease deed of 1943 was extended in 1961, and the same Clauses have been reproduced. Had it been true that such invalidating factors were present even in 1943, the respondents herein would not have been parties for the extension of lease on the very same Clauses. That apart, the strong circumstance which stands in favour of the landlords and against the respondents-tenants is the compromise that was entered into between the parties in C.S. No. 69/72, wherein it has been clearly found that what was leased out was the Casino Theatre and the buildings and the premises thereon, which is situated in 14 grounds and 1116 sq. ft. Having been parties to such a compromise decree, now, the respondents are estopped from contending that the ownership of the property continues to be with them.
19. The learned Counsel for the respondents relying on the evidence of P.W.1 in the cross-examination that all the constructions were raised by the lessee during the pendency of the lease, would submit that now, the petitioners cannot come forward with the case that it belonged to them; that even the Clauses therein are not available to them, and further, the respondents are entitled to the benefits of the Tamil Nadu City Tenants Protection Act. Attractive though these contentions at the first instance, they do not stand the scrutiny of law. The first and foremost circumstance would be what was originally leased out was not only a vacant site, but also a warehouse which fact is admitted by R.W.1. Secondly, even those Clauses continued to be in the next lease deed whereby the period was extended from 1961 for 10 years. That apart, in the compromise decree referred to above in C.S. No. 69/72, it has been clearly found what was demised was the buildings and the premises what are found in the site. Added circumstance is the consideration for leasing out the property having an extent of 14 grounds and 1116 sq. ft. in a place like Mount Road, Madras, and the paltry rental of Rs. 3,000/- for a longer period would be only a consideration for the tenants and to leave the ownership of the property with the landlord irrespective of whatever being constructed therein. Taking into consideration that situation only, the tenants should have entered into a compromise as found in C.S. No. 69/72. Having been parties to such a compromise, now, they cannot question the same. What is evident is that they have divested their ownership, though they raised such buildings and premises even after taking the property into lease. Having divested the title, they cannot now come forward to claim that they are entitled to the buildings and premises, and the revision petitioners are only entitled to vacant site. This, in the considered opinion of this Court, cannot be countenanced.
20. The contention of the learned Counsel for the respondents that they continue to be in possession of the property is a fact not in dispute. It is true that P.W.1 has given evidence that all the superstructures have been raised by the respondents herein. It is not disputed by the revision petitioners that the buildings were erected by the opposite party, and it has also been assessed to tax thereafter. Now, the point for consideration would be whether what was leased out originally was a vacant site only and whether the title in respect of the buildings and the premises found in the site, continues to be with the tenants or divested thereafter. This has got to be found in negative in view of the reasons stated above.
21. The next contention by the learned Counsel for the respondents that they are entitled to have the benefits of Section 12 of the Tamil Nadu City Tenants Protection Act; that even if a Clause found in the decree or in the agreement would not be operative or in force, and hence, they should have the benefits of it; and that even those Clauses would be of no effect at all has got to be rejected since it will not stand the scrutiny of law. In order to have the benefits of the Tamil Nadu City Tenants Protection Act, it would not be sufficient to show that a tenant has erected the superstructures on the demised land, but he must show that he continued to be the owner thereof on the date of making the claim over the same. In the instant case, what was leased out at the earliest was only a warehouse along with the vacant site. That itself would be sufficient to record a finding that what was leased out was not only a vacant site, but also the premises. Even assuming that the possession of the English warehouse was subsequently surrendered, and the superstructures have been subsequently raised in the demised land by the tenants, and if they are to claim the benefits under the Tamil Nadu City Tenants Protection Act, the mere fact that they erected the constructions on the demised land would not be sufficient, but they must be able to show that they continued to have the ownership or continued to maintain the ownership over the property till they make the claim. In the instant case, it would be quite evident that when they entered into a compromise decree in 1972, they have clearly mentioned therein that what was demised or leased out was the buildings and the premises situated in 14 grounds and 1116 sq. ft. Thus, it would be quite evident that they have divested the ownership and title over the property. In such circumstances, it would be futile on the part of the respondents-tenants to contend that they are entitled to have the benefits of the Tamil Nadu City Tenants Protection Act, and the said contention requires rejection.
22. From the very commencement till the proceedings are pending, it would be quite evident that what was leased out originally was a warehouse, and subsequently constructions were made by the tenants; but, by entering into all the agreements and also the compromise decree, they have divested their ownership. Now, they cannot claim that they are entitled to have the benefits of the Tamil Nadu City Tenants Protection Act. Under the circumstances, no question of ouster of jurisdiction of the Rent Controller would arise. What is demised, as could be seen, is actually a building as envisaged under the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act. Hence, the Rent Controller has jurisdiction, and the appellate forum has taken an erroneous view. Accordingly, the order of the appellate authority has got to be set aside and the order of the Rent Controller be restored in that regard.
23. The next question would be whether fair rent could be fixed for the property as one done by the Rent Controller or whether the matter could be remitted back to the appellate forum since it has not decided that question, but has decided only the question of jurisdiction and found that the petition was not maintainable. The learned Counsel for the revision petitioners would submit that in the instant case, it has got to be done here itself, since the parties are litigating for a longtime, and sufficient materials are available before this Court. In answer to the above, it is contended by the learned Counsel for the respondents that if the Court comes to the conclusion that the Rent Controller has got jurisdiction, the matter could be well remitted to the appellate forum for the purpose of fixation of fair rent.
24. After hearing the Counsel on either side on this aspect, and looking into the materials available, this Court is of the considered opinion that it is a fit case where this Court can fix the fair rent for the reasons that originally, the RCOP was filed in the year 1997, and the matter is pending for a decade. Now, the test would be whether sufficient materials are available before this Court to fix the fair rent and not to make a remand therefor. It remains to be stated that before the appellate forum, no further materials were available. Even if it is remitted back to the appellate forum, it could fix the fair rent only on the materials available and nothing more. Under the circumstances, this Court is of the opinion that sufficient materials are available before this Court, and in order to avoid the avoidable delay and further litigation between the parties, it would be fit and proper to fix the fair rent here itself. While the petitioners filed the petition before the Rent Controller, they sought for fixation of fair rent at Rs. 3,45,494.57; but, the Rent Controller fixed it at Rs. 2,59,217/-. The appellate forum did not go into this question.
25. Admittedly, the property is situated in Mount Road, Madras, and it is a commercial locality where number of nationalised banks and commercial enterprises are situated around. The property has got an extent of 14 grounds and 1116 sq. ft. Under the circumstances, the Rent Controller has taken into consideration these facts along with the necessary factor in order to fix the fair rent at Rs. 2,59,217/-. Now, at this juncture, it is pertinent to point out that when this was fixed by the Rent Controller, the valuation of the property namely Rs. 35 lakhs per ground, was taken into consideration. After a period of 10 years, it comes for a decision. Needless to say that the property value would have raised number of times. However, there cannot be any impediment for fixing the original quantum what was fixed by the Rent Controller at Rs. 2,59,217/-. Under the circumstances, the order of the Rent Controller is restored. The quantum of fair rent as fixed by the Rent Controller is confirmed.
26. Accordingly, this civil revision petition is allowed. No costs.