Madras High Court
B.Venkatesan vs M.K.Selvaraj on 24 June, 2010
Author: G.Rajasuria
Bench: G.Rajasuria
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 24.06.2010 Coram: THE HONOURABLE MR.JUSTICE G.RAJASURIA C.R.P.(NPD).No.1834 of 2005 B.Venkatesan ... Petitioner vs. M.K.Selvaraj ... Respondent This civil revision petition is filed under Section 25 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 against the fair and decreetal order dated 21.03.2005 passed by the learned Subordinate Judge, Nagapattinam (Rent Control Appellate Authority) in RCA No.2 of 2005 confirming the order and decreetal order dated 25.11.2004 passed by the learned District Munsif, Nagapattinam (Rent Control Authority) in RCOP No.7 of 2002. For Petitioner : Mr.M.L.Ramesh For Respondent : Mr.M.Thamizhavel ORDER
Inveighing the order dated 21.03.2005 passed by the learned Subordinate Judge, Nagapattinam (Rent Control Appellate Authority) in RCA No.2 of 2005 confirming the order and decreetal dated 25.11.2004 passed by the learned District Munsif, Nagapattinam (Rent Control Authority) in RCOP No.7 of 2002, this civil revision petition is focussed.
2. Heard both sides.
3. Broadly but briefly, narratively but precisely, the relevant facts, which are absolutely necessary for the disposal of this civil revision petition would run thus:
The revision petitioner/landlord filed the RCOP for evicting the respondent/tenant on the ground of demolition of the building in the demised premises and for raising a new construction for putting the property into more beneficial use and also on the ground of wilful default in payment of rent. The Rent Controller after hearing both sides dismissed the application. Whereupon, RCA No.2 of 2005 was filed, which was also dismissed. Being aggrieved by and dissatisfied with the orders of both the courts below, this revision has been focussed on various grounds, the epitome and the long and short of them would run thus:
- Both the courts below failed to take into account the bona fide requirement of the landlord to get the building in the demised premises demolished and construct in his entire vacant site a double storied building so as to put it into more beneficial use. But both the courts below approached the matter wrongly and simply believed the version of the respondent as though the property was not required for a genuine purpose and that there emerged virtually between them an usufructuary mortgage transaction relating to the same property.
4. The learned counsel for the revision petitioner reiterating the grounds of revision and also inviting the attention of this court to the various portions of the typed set of papers would develop his argument that the landlord is an MBBS doctor by profession and he is having financial wherewithal to raise a new construction; but both the courts below misapplied the law as though clinching evidence was not available on the side of the landlord to prove his financial status and consequently, dismissed the application. Both the courts below also took the view as though the building was not proved to be an old one and accordingly dismissed it even though the dictum of the Hon'ble Apex Court in regard to this matter is entirely different. The inference on the part of the courts below as though there was an usufructuary mortgage like transaction between the petitioner and the respondent, is totally erroneous.
Accordingly, the learned counsel prays for setting aside the orders of both the courts below and for allowing this revision.
5. Whereas by way of torpedoing and pulverising the argument as put forth on the side of the learned counsel for the petitioner, the learned counsel for the respondent would develop his argument the gist and kernel of it would run thus:
The law envisages that before the Rent Controller the landlord should have filed an undertaking as contemplated under Section 14 of the Tamil Nadu Buildings (Lease and Rent control) Act, 1960. But that was not done so. Simply because, the landlord happened to be an MBBS Doctor by profession, there is no presumption that he would be having several lakhs of rupees to raise a new construction and as such, both the courts below correctly in the absence of evidence, held that the landlord did not prove his financial wherewithal to effect construction. The age of the building should have been proved by examining an Engineer but that was also not done. The landlord was not justified in accusing the tenant of wilful default when admittedly a huge amount of premium/advance given by the tenant to the petitioner was available with him.
Accordingly,he prayed for the dismissal of the revision.
6. The points for consideration are as to :-
1. Whether the requirement of the landlord as found set out in the RCOP for demolition and reconstruction is genuine or not?
2. Whether the tenant committed wilful default in paying the rent?
3. Whether both the courts below properly appreciated the evidence on record and arrived at the conclusion legally?
Point No.1:-
7. The petitioner would appropriately and convincingly by inviting the attention of this court to the averments in the RCOP petition as found incorporated in the order of the Rent controller, would submit that in the petition itself, the landlord clearly and categorically gave undertaking as envisaged in Section 14 of the Act.
8. I am of the considered view that there is no necessity on the part of the landlord to file a separate affidavit or a separate sheet of paper incorporating the undertaking as contemplated under Section 14 of the Act. As such, I could see there is substantial compliance with Section 14 of the Act by the landlord, in respect of giving of undertaking, is concerned.
9. Regarding the non adducing of evidence to prove the financial wherewithal of the petitioner, the learned counsel for the petitioner correctly cited the decision of the Hon'ble Apex Court reported in 2006 (2) CTC 615 (S.Venugopal vs. A.Karruppusami and another). An excerpt from it would run thus:
"11. In the instant case, we find that the property owned by the landlord, whatever may have been its value in the past, has acquired commercial value and, therefore, the landlord wishes to demolish the old single storey structure and to construct a multi-storied building, which may fetch him higher rent, apart from serving his own needs. The landlord had already applied to the competent authorities and got the plans approved. Taking into consideration all these reasons, we are convinced that the landlord bona fide intends to demolish the old building and to construct a new one. Raising funds for erecting a structure in a commercial centre is not at all difficult when a large number of builders, financiers as well as banks are willing to advance funds to erect new structures in commercial areas. This is apart from the fact that the landlord has himself indicated that he was willing to invest a sum of Rs.One and a half lakh of his own, and he owns properties and jewellery worth a few lakhs."
The Hon'ble Apex Court in their wisdom thought fit to observe that in days of this nature, where banks and financial institutions are willing to advance sufficient funds, the courts below were not justified in raising doubts about the capacity of the landlord to raise commercial structures.
10. Here, in this case, the landlord happened to be a Doctor by profession and he wants to raise a commercial structure and in such a case, expecting him to produce clinching evidence regarding his financial wherewithal with reference to his bank accounts and his past financial transactions etc., would not arise. As such on this count also, I am of the view that both the courts below were not justified in simply dismissing the application on the ground of lack of evidence having been adduced on the side of the landlord.
11. The expectation on the part of both the courts below that an engineer or some other competent person should have been examined to prove the age of the building, in my opinion is neither here nor there. The photo already marked in this case, would exemplify and demonstrate that there is also a tiled structure in a portion of the larger area belonging to the landlord and the demised premises is actually comprised of a less costlier structure. The learned counsel for the tenant would explain and expatiate that it is a cement sheet roofed building with thatches also over it and it is situated in a busy locality, namely, Nagapattinam market. So, if a new commercial building is put up there, certainly, the landlord would be able to earn good income, which would be several times over and above what he gets as income now.
12. In respect of the contention of the learned counsel for the tenant that the landlord should obtain proper permission for demolition and also for reconstruction, now the law is well settled that the landlord who wants to seek eviction of a tenant from a building on the ground of demolition and reconstruction should produce before the court the plan concerned. According to the learned counsel for the landlord Ex.P2 is the relevant plan.
13. Considering the pro et contra, I am of the view that both the courts below could have taken a positive view of the matter and ordered eviction; but by not ordering eviction certainly the landlord was put to discomfiture and he is not in a position to put the entire property into more beneficial use.
14. The contention on the side of the tenant that the tenant is occupying only a small area in that big site and that the remaining area could be developed is neither here nor there. It is for the landlord to take a decision as to how his property can be developed and put to utmost beneficial use. Here, the premises concerned is situated in a busy market place, where rental value of the buildings is more. The landlord cannot be compelled to not to demolish the structure and furthermore, the present demised structure itself is value wise insignificant and in such a case, ordering for demolition and reconstruction would be the appropriate relief that could be granted to the landlord by this court.
15. Accordingly, I am of the view that the order of both the courts below should be set aside and the RCOP should be allowed.
16. The learned counsel for the respondent/tenant would make an extempore submission that in the event of the landlord not complying with Section 14 (2) (b) of the Act, the tenant may be permitted to re-occupy the premises. I would like to make it clear that if there is non-adherence to the statutory provisions on the part of the landlord, the tenant is at liberty to apply to the court for re-occupation of the said premises.
17. The learned counsel for the tenant also make in his submission that in the event of the landlord complying with the condition and put up the new construction and let it out to third parties, the portion in commensurate with the defendant's present extent of occupation might be let out to him according to the then prevailing rate for which the learned counsel for the landlord would submit that, it all depends upon the wish and will of the landlord at that time and he cannot assure at this stage anything in that regard. It is for the tenant at the appropriate time to negotiate with the landlord and it is for them to arrive at a settlement and this court cannot compel the landlord to let out such property to the respondent/tenant at future date.
18. Accordingly, Point No.1 is decided in favour of the landlord.
19. On the ground of wilful default in paying the rent, the contention on the side of the landlord is that the tenant failed to pay the rents wilfully for considerable time and that alone made him to invoke the ground of wilful default in seeking eviction.
20. Whereas the learned counsel for the tenant would submit that the tenant paid a sum of Rs.2,50,000/- as premium/advance for the lease. However, the monthly rent was only Rs.1,000/- and as per the Act, the landlord was not expected to receive advance for more than one month's rent. As such, the landlord should only adjust the arrears of rent with the said advance and it cannot by any stretch of imagination be treated as arrears of rent.
21. However, the learned counsel for the revision petitioner would submit that initially there was a lease agreement emerged for a period of three years between the petitioner and the respondent and even before the commencement of such lease for three years, a sum of Rs.2,50,000/- was paid by the tenant to the landlord towards security for occupying the premises and it cannot be termed as premium/advance.
22. At this juncture, I would like to point out that even though on the tenant's side no argument was put forth as though it was a usufructuary mortgage transaction, both the courts below construed as though it was a usufructuary mortgage transaction and dismissed the RCOP as well as the appeal.
23. The learned counsel for the tenant also would reiterate that the tenant did not plead any usufructuary mortgage relationship involved in this case and that the tenant pleaded before the lower court that the aforesaid sum was paid as premium/advance.
24. At this juncture, it is just and necessary to point out that in order to come to the conclusion that there was a usufructuary mortgage, no clinching evidence was produced. Merely based on the averments in the counter, it appears both the courts below construed as though there was a usufructuary mortgage etc. In the meantime, I cannot also accept the contention of the landlord that the said amount was paid only as security. If any amount is paid in connection with the lease, it should only be construed as premium/advance and if it exceeds one month rent, certainly the tenant is entitled to get it adjusted towards the arrears of rent and in such an eventuality, it would not amount to wilful default in paying the arrears, even if rents have not been paid regularly. If viewed, accordingly, in this case, there is no wilful default in paying rent by the tenant. However on the ground of demolition and reconstruction the RCOP should be allowed. The landlord is at liberty to deduct the arrears of rent from the aforesaid advance amount and return back the remaining advance amount to the tenant.
25. Accordingly, Point No.2 is decided in favour of the landlord.
Point No.3:-
26. In view of the ratiocination adhered to in deciding the aforesaid points, the orders of both the courts below are to be set aside and accordingly set aside and the RCOP shall stand allowed.
27. With the above direction, this civil revision petition is disposed of. No costs.
To
1. The Subordinate Judge, Nagapattinam (Rent Control Appellate Authority)
2. The District Munsif, Nagapattinam (Rent Control Authority) vj2