Madras High Court
Dr. C. Ranganthan vs S.A. Chinnadurai Nadar on 29 August, 1986
Equivalent citations: (1987)1MLJ138
ORDER M.N. Chandurkar, C.J.
1. This is a revision petition by the landlord challenging the order made by the trial court and confirmed by the appellate Court holding that the entire extent of 3.grounds and 2387 sq. ft. of land belonging to the petitioner was liable to be sold to the tenant-respondent under Section 9 of the Tamil Nadu City Tenants Protection Act, 1921 (hereinafter referred to as the Act). The respondent-tenant had admittedly taken 3 grounds and 2387 sq. ft. of open site on a monthly rent of RSection 25 for the purpose of carrying on his business in selling firewood. Before the landlord instituted the suit for possession, he had made an offer some time in 1976 to the tenant that he was willing to sell the entire land at the rate of RSection 50,000 per ground. The land is situated in Sait colony, Egmore. The tenant however did not accept that offer and therefore the landlord terminated the tenancy and offered to purchase the super which was then on the land at RSection 750. In reply to this notice, the Jenant offered to purchase the land at RSection 1,1,000 per ground. The landlord then filed a suit for ejectment and possession of the open site. In that suit, the tenant claimed a right to purchase the land under Section 9 of the Act by I.A. No. 17764 of 1977. The landlord did not agree that the entire extent of the land could be purchased by the tenant and he asked for the appointment of a Commissioner to determine the minimum extent of the land which the tenant was entitled to purchase as well as the value of the said land. The Commissioner made his report on 13th November, 1978. In his report, the Commissioner observed There is a small superstructure put up by the tenant'. He, however, restricted his report to ascertaining the value of the land. On the basis of documents produced before him, he found as follows-"Accordingly, for five years from. 1971 to 1975 that is for five years at Rs. 11,500, the total value will be Rs. 57,500. For 1976 it is Rs. 23,000 per ground. The total will be Rs. 80,500 for. 6 years. The average market value therefore will be Rs. 80,500 divided by 6,i.e., Rs. 13,400 or into round figure Rs. 14,000". With this finding, he returned the warrant. The. effect of the finding is that the price of the site in question was determined by the Commissioner at Rs. 14,000 per ground.
2. It however, appears that a fresh warrant was issued to the Commissioner for fixing the minimum extent of land that may be required for the convenient enjoyment of the tenant. The Commissioner then made a. second report on 30th August, 1982. Before the Commissioner, the landlord gave evidence to say that the minimum extent needed by the tenant would be half ground and he would be willing to give a site 45 ft. X 30 ft, on the south western side. The tenant however, took a stand before the Commissioner that he required the entire extent of the land for his business. This claim of the tenant was accepted by the Commissioner Inter alia for the reason that the landlord had by notice dated 22nd June, 1972 expressed his willingness to grant the whole extent of the land as per the value fixed by the court. Thus, according to the Commissioner, the tenant could not carry on his entire business in the area of 30 ft. X 45ft., which was offered by the landlord and that the tenant's evidence that for his business he required the whole extent of the land had to be accepted.
3. The landlord's case before the Commissioner was that the two superstructures EFGHD and MNOP which had zinc sheet roofing were constructed later on after the report of the first Commissioner and that the office room JFLK was the only structure at the site initially. The other structure which was in the nature of a bathroom was also claimed to have been constructed much later. The Commissioner, however, stated that the structures were there originally itself and he observed that since the original warrant was merely for valuing the land he did not attach much importance to the details about the superstructures. He used his personal knowledge to the effect that he had found servant quarters earlier. The Commissioner then went on to observe that having regard to the extent of> the business and the coming of the lorries at night, servants were required to be on the site for unloading purposes and therefore the whole area was necessary for the tenant.
4. Objections to this report were filed by the landlord laying stress on the fact that the previous report referred only to a small structure and that the Commissioner was not right ' in observing that the other structures were also constructed much earlier.
5. The trial court accepted the report of the Commissioner that the entire land was absolutely necessary for the convenient enjoyment of the property by the tenant who was running a firewood depot. He then went on to observe with reference to the superstructure on the southern side that the entire land immediately east of it will be necessary as appurtenance to the suit superstructure and similarly in respect of superstructure on the northern side, the entire site on the eastern, western and southern sides will be considered as appurtenances to the superstructure. He made a reference to the report of the Commissioner in which it was stated that the vacant site is used for splitting up firewood. In addition, the Rent Controller held that the landlord having consented to sell the entire vacant site he was estopped from contending that the whole extent of the land is not necessary for the tenant's business. The Rent Controller then went on to observe that the firewood business was being conducted by the tenant in the suit land on a large scale and so the entire vacant land of four grounds was absolutely necessary for such business and for convenient enjoyment of the property by the tenant. Thus, he directed the entire area of 3 grounds and 2387 sq.ft. to be sold.
6. The landlord then appealed against this order. The Appellate Court also accepted the report of the Commissioner in toto and took the view that the entire land was necessary for the convenient enjoyment of the tenant because he was actually using the same for his business. He therefore declined to disturb the finding recorded by the trial court.
7. This revision petition is filed by the landlord. The contention raised on behalf of the landlord is that both the trial court and the appellate Court have misapprehended the scope of the provisions of Section 9 of the Act and that the authorities were in error in holding that because the tenant was carrying on business on the entire site, he was entitled to purchase the entire site under Section 9 of the Act. It is argued that the first report of the Commissioner referred to only one small office premises and that report conclusively proved that the present structures have been constructed much later. It is also argued that there was no question of estoppel in so far as the landlord was concerned because the offer made prior to the litigation did not bind him and that the right under Section 9 of the Act would have to be determined in accordance with the require me. .s of law. On behalf of the tenant, it is contended that this Court should not interfere with the concurrent findings recorded by both the courts below since this Court is exercising only revisional jurisdiction and as there was material, according to the Learned Counsel for the tenant, for facing a finding, this Court was not entitled to reappraise the evidence afresh. The Learned Counsel contended that estoppel was not the only ground on which the tenant's claim has been accepted and it is argued that the very fact that the landlord was willing to sell the entire site showed that even according to the landlord the tenant required the entire land. Reliance was also placed on the fact that this offer was reiterated in the plaint.
8. Now it is obvious from a reading of the orders of the trial Court and the Appellate court that they have failed to appreciate the real nature of the right of the tenant under Section 9 of the Act. The relevant provisions Section 9(1)(a)(i) provides as follows -
Any tenant who is entitled to compensation under Section 3 and against whom a suit in ejectment has been instituted... may-apply to the court for an order that the landlord shall be directed to sell, for a price to be fixed by the court, the whole or part of extent of land specified in the application.
Section 9(1)(a)(i) therefore provides for a right of a tenant to purchase such land as he may specify in the application. But in order to ascertain which tenant is entitled to make such an application, we must refer to Section 3 of the Act, because only a tenant who is entitled to compensation under Section 3 is entitled to apply to the Court for an order directing the landlord to sell the land to which reference is made in his application when a suit for ejectment has been instituted against him. Section 3 of the Act reads as follows:
Every tenant shall on ejectment be entitled to be paid as compensation the value of any building, which may have been erected by him, by any of his predecessors-in-interest or by any person not in occupation at the time of the ejectment who derived title from either of them, and for which compensation has not already been paid. A tenant who is entitled to compensation for the value of any building shall also be paid the value of trees which may have been planted by him on the land and of any improvements which may have been made by him.
Section 3 thus refers to a right of a tenant to claim compensation. This compensation can be claimed by him in respect of any building which may have been erected by him or by any of the persons specified in Section 3. It is therefore clear that only such tenant who has erected a building in the land from which he is sought to be evicted is entitled to compensation and it is such a tenant who is entitled to apply under Section 9(1)(a)(i). Section 9(1)(b) prescribes what has to be done on such an application being made. Section 9 (1)(b) reads as follows:
On such application the court shall first decide the minimum extent of the land which may be necessary for the convenient enjoyment of the tenant. The Court shall, then fix the price on the minimum extent of the land decided as aforesaid or of the extent of the land specified in the application under Clause (a) whichever is less. The price aforesaid shall be the average market value of the three years immediately preceding the date of the order. The court shall order that within a period to be determined by the court not being less than three months and not more than three years from the date of the order the tenant shall pay into court or otherwise as directed the price so fixed in one or more instalments with or without interest.
Section 9(1)(b) therefore gives a mandate that the court shall first decide the minimum extent of the land which may be necessary for the convenient enjoyment by the tenant. Now. it is obvious that the rights to purchase land being vested only in a person who has constructed a structure on the land and, therefore when Section 9(1)(b) refers to land which may be necessary for convenient enjoyment by the tenant, it is obvious that the enjoyment contemplated is in respect of the structure. Therefore, the first thing which the Court 'has to do under Section 9(1)(b), is to find out having regard to the structure for which compensation is payable under Section 3, what is convenient enjoyment of the structure by the tenant. Once this finding is recorded, then if the land specified in the application under Section 9 (1)(i) is less than the land so determined, the court is required to fix the price in respect of the land specified in the application. If the land spcified in the application is more, then the price is to be fixed in respect of the minimum land which is determined under Section 9(1)(b). Section 9(1)(b) also provides as to how the price is to be determined; The price is determi-, ned on the basis of the average market value of the three years immediately preceding the date of the order. The provisions of Section 9(1)(a)(i) and Section 9(1)(b), therefore make it clear that what the court is required to find out is the minimum land required for the convenient enjoyment of the structure. If the tenant does not pay the price as directed by the court, which payment in a given case may be directed to be paid in instalments, the application of the tenant under Section 9(1)(a)(i), stands dismissed. Though power is given to the court, if sufficient cause is shown, to extend the time for payment, such extension cannot be beyond three years. If the application under Section 9(1)(a)(i) is dismissed and if any payments are already made, the amount paid is to be returned by the landlord to the tenant. If, however, the price is deposited as required, then the Court has to make an order directing the conveyance by the landlord to the tenant of the extent of the land for which the price was fixed. At the same time, the court has also to direct the tenant to put the landlord into possession of the remaining extent of the land. The scheme of Section 9 is thus very clear. If there is a large extent of land which is taken on lease as open site and if he has constructed a structure thereon, then only such land as is necessary for the convenient enjoyment of the structure can be directed to be sold to the tenant.
9. If we now construe the orders of both the Courts in the light of this construction of Section 9, it is obvious that both the Courts directed their attention not at what was the extent of the land necessary for the convenient enjoyment of the structures, but what was the land necessary for the business of the tenant. This will be clear from the following observations made by the trial Court in his order As stated already, the firewood business is being conducted by the respondent in the suit land on a large scale and so the entire vacant land of four grounds is absolutely necessary for such business and for convenient enjoyment of the property by the respondent.
The Appellate Court has made the following observation:
On a consideration of the report of the Commissioner and the plan it would appear to me that the finding of the Commissioner that the entire land is required by the respondent for the purpose of his business cannot be disputed.
Then we go to the report of the Commissioner, wherein he observed at the end of paragraph k as follows:
On the other hand, we have uncontradicted evidence of the defendant who is in such a firewood business for a number of years to show that his business requires the whole extent of land.
Both the authorities were therefore not justified in proceeding to decide the claim of the tenant on the footing that what had to be ascertained was the requirement of the tenant for his business. What they had to ascertain was what was the minimum extent of the land which was necessary for the convenient enjoyment of the superstructure which was constructed by him and in respect of which compensation was payable to him under Section 3 of the Act. Therefore, the finding of both the Courts that the tenant was entitled to purchase the entire' site leased to him as it was necessary for the purpose of his business was clearly vitiated.
10. The trial Court was also not justified in holding that the landlord was estopped from contending that the whole extent of land is not necessary for the tenant's business. It is true that prior to the filing of the suit for eviction the landlord had made an offer to the tenant that he was prepared to sell the entire land at the prevalent market rate, which according to the landlord was Rs. 50,000 per ground. This offer had nothing to do with the statutory right which the tenant was entitled to exercise only if a stit (or eviction is filed under Section 9 of the Act. There is nothing wrong in an owner of property volunteering to sell the 'land in the possession of the tenant to the' tenant if the tenant is willing to pay the market price of the property. A suit for eviction would have to be filed if a tenant declines to accept the offer of the land and only on the filing of such a suit for eviction that a right which is specifically given by the statute could be exercised by the tenant. When such a right is to be adjudicated upon the adjudication is to be only in accordance with the provisions of the statute. The statute requires that only the minimum extent of the land is to be sold to the tenant. The court cannot abdicate its function of determining the minimum extent of the land which in a given set of circumstances, a tenant will be entitled to purchase. While exercising powers under Section 9(1)(b) of the Act, the Court cannot rely on an offer made prior to the suit by the landlord with the object of disposing of his property and estop the landlord from claiming back the property from the tenant. When a claim is made by the tenant in a suit for eviction that he is entitled to purchase land under Section 9(1)(a)(i), that claim has to be adjudicated upon on its own merits The offer of the landlord cannot be used against him at all. Either the tenant adcepts the landlord's offer to sell at the price quoted by the landlord or he enforces his statutory right in accordance with the provisions of the statute. In any case, there is nothing in the offer which can be read as conceding by him the fact that the entire land is required by the tenant for his business, which circumstance as already pointed out is irrelevant for determining a claim under Section 9(1)(a)(i), of the Act because what is required to be determined is not requirement for the convenient enjoyment of the premises which have been constructed and for which compensation was payable under Section 3 of the Act. The trial court and the appellate court were therefore in error' in holding that the landlord was estopped from challenging the claim of the tenant.
11. The question which then arises is which of the structures can properly be taken into account for the purposes of the claim under Section 9(1)(a)(i) of the Act. The crucial date for determining the structure for the purposes of Section 3 of the Act is clearly the date of the application. Whatever may be the structure on the date of the application, that is the structure with reference to which the claim under Section 9(1)(a)(i) and Section 9(1)(b) can be made. In the instant case, the application was made some time in the year 1977. The Commissioner when he was first appointed completed his inspection on 21st March, 1978. Thereafter, he proceeded to hear the parties with regard to the price. Paragraph 2 of the Commissioner's report dated 13th November, 1978 unambiguously states that on the land there is a small structure. Paragraph 2 reads as follows:
The suit land is a vacant site situated on the 1st street, Sait colony, Egmore, Madras. There is a small superstructure put up by the petitioner There is no reference whatever to any other superstructure and on the basis of this report the landlord would be justified in contending that only a small office which is about 12 ft.x 11 ft. was on the premises. When the Commissioner made his second report, when he was appointed to ascertain the minimum extent of land that may be required for the convenient enjoyment by the tenant, the Commissioner found that there were some more structures on the land. The Commissioner, however, in his report has tried to explain away the presence of new structures by statting that he had not taken notice of the servant's 'quarters and that he had merely mentioned the office room casually. According to him he did not take the measurements of the structures' because there were no such instructions. The Commissioner's Report with reference to large structure EFGHIJ which is a shed itself indicates that within this structure there is a small enclosure with brick walls used as office room. The very fact that over the office room zinc sheets have been put up indicates that the office room was the only structure originally and that later on new sheds have come into being. The Commissioner was not entitled to explain away the absence of mention of any other structure in his first report. If the first repot mentions only one structure which was in the nature of an office room, it was obvious that the other structures were put up after the first inspection made by the Commissioner with a view to claim more land by the itenant. In view of the first report of the Commissioner, the tenant was entitled to only such land as is necessary for the convenient enjoyment of the structure. Strictly speaking the office room itself is of no use if there was no business. The site itself was taken for the business and the use of the site was predominantly for the purpose of the business and not for the purpose of putting up a structure. However, as the provisions of Section 9 of the Act stand, what has to be determined is the extent of the land necessary for the enjoyment of the structure and on the terms of the section therefore the tenant will be entitled only to the minimum extent. of land necessary 'for the convenient enjoyment of the structure. The structure is situated at the south western side of the plot. It is situated at some-distance from the front side and though strictly speaking the tenant will not be entitled to land more than what is occupied by the structure plus some surrounding land, it appears to me that the landlord in his evidence before the Commissioner having offered land 45 ft. x 51 ft. 3 inches on the south western side, interests of justice would be met and the requirements of law would also be satisfied, if this land 45ft.x 351 ft. inches is allowed to be purchased by the tenant. This extent of land also takes in the bath room as well as the structure with zinc shed roofing. This land is not really the minimum which the tenant is entitled to purchase, but the benefits from a statement made by the landlord before the Commissioner. Accordingly, it is necessary to set aside the finding given by both the courts below that the tenant is entitled to purchase the entire site leased out to him and in its place record a finding that the tenant will be entitled to purchase an area of 45 ft.x 51 ft.3 inches admeasuring 2306 sq.ft.of land on the south western side.
12. The Learned Counsel appearing on behalf of the tenant has referred to a decision of the Kerala High Court in SouriFrancis v. Parameswaran . That decision does not appear to be of any assistance in so far as the claim under Section 9 of the Act, is concerned. That was a claim made by the landlord under Section 75(2) of the Kerala Land Reforms Act, 1964. The Kerala High Court in that case held that when once it is established that land is required for building purposes, the extent of the land required as stated by the landlord should be given due consideration and unless his claim is found to' be unreasonable as to spell lack of bona fides, should be allowed. The landlord in that case was an advocate and having regard to that fact as well as to the fact the land was situate in a Panchayat area which was not densely populated and where people were accustomed to live in buildings with extensive appurtenant premises an extent of 59 cents was not held to be excessive or unreasonable for the construction of a residential building. In the instant case, the extent of the land to which the tenant will be entitled is specifically required to be determined having regard to the, provisions of Section 9(1)(b) of the Act. The decision relied upon does not, therefore, help the tenant.
13. So far as the price is concerned, the date with reference to which the price is to be determined is, in accordance with the decision of a Division Bench of this Court in Arasan Chettiar v. Narasimhalu Naidu's Estate Trust A.I.R (1980) 3 Mad. 13 : 93 L.W.392 : (1980) 2 M.L.3.303 : AIR 1980 Madras 305. the date of the order of the appellate or revisional court. This proposition is stated as proposition No. 3 in paragraph 12 of the judgment by the Division Bench in the following words:
For the purpose of disposing of this application the court must first decide upon the minimum extent of the land which may be necessary for the convenient enjoyment by the tenant. Any such decision of the court, from the very nature of the case can only be by means of an order and the date of that order will be the relavent date for the purpose of fixing the price mentioned in the third sentence in Section 9(1)(b). If the decision of the court on the minimum extent is taken up further by way of appeal or revision and that decision is either affirmed or modified and if there has been a stay of further proceedings, during the pendency of such appeal or revision, naturally, the date of the order contemplated in the third sentence in Section 9(1)(b) will be the date of the order of the appellate or revisional court.
14. In view of this, the original report of the Commissioner in 1978 will have to be completely ignored. Accordingly, this revision petition is allowed. The tenant is held entitled to purchase only 2306 sq.ft. of land. The area of 2306 sq. ft. (45 ftx 51 ft.3 inches) is delineated in a plan which is filed by the Learned Counsel for the revision petitioner. This plan will be treated as part of the order. The trial court shall now proceed to determine the price of the land at which the tenant is entitled to purchase in accordance with law. The petitioner will get the costs of this revision petition. Costs/Rs. 500.