Madras High Court
M. Abdul Hakkim vs M.K.M. Abdul Salam And Ors. on 27 July, 1990
Equivalent citations: (1990)2MLJ377
JUDGMENT Somasundaram, J.
1. The Second respondent in O.S. No. 441 of 1981, who failed before both the Courts below, is the appellant in this second appeal. For the sake of convenience the parties are referred to in this second appeal by their nomenclature given in the suit
2. The facts of the case necessary for the disposal of the second appeal are as follows:
The plaintiff filed the suit, O.S. No. 441 of 1981 on the file of the Sub Court, Tiruchi against the defendants for recovery of possession of the properties described in Schedules A, B and C and for other reliefs contending that the defendants 1 and 2 in the suit became lessees under the plaintiff in respect of A Schedule properties under a lease deed dt. 13-9-1975 for a period of six years on monthly rent of Rs.350/- and that the defendants had also executed a lease agreement dt. 22-9-1975 in respect of the machineries and "Thalavada Samans" described in B and C Schedules in the plaint, and that the said lease deeds were executed for the purpose of running a tannery. The further case of the plaintiff is that the lease of both the building and the machineries is for a fixed period of six years on and from 1-9-1975.
3. The defendants resisted the suit contending inter alia that though the period of lease was over, hey are statutory tenants entitled to the benefits of the Tamilnadu Buildings (Lease and Rent Control) Act 18 of 1960, hereinafter referred to as the Act and, therefore, the suit for recovery of possession of the suit properties as framed is not maintainable.
4. The trial Court, on a consideration of the entire evidence on record - both oral and documentary-found that the lease of the building under Ex.A1 and the lease of the machineries under Ex. A2 were granted to run the tannery business with the machineries belonging to the plaintiff and embedded in the building covered by the lease deed, Ex.A1 and, therefore, the defendants are not entitled to the benefits of the Act and the suit for recovery of possession of the suit properties as framed is maintainable and consequently decreed the suit. As against the judgment of the trial court the second defendant alone filed an appeal in A.S.No.209 of 1982 on the file of the District Court, Tiruchi. The appellate Court confirmed the findings of the trial Court and dismissed the appeal. Aggrieved by the Judgment of the Courts below the second defendant has filed the present second appeal.
5. The only point argued by Mr. V.K. Muthusamy, learned Counsel for the second defendant, is as follows: The lease of the building and the lease of the machineries were granted separately under two documents Exs.A1 and A2 respectively; Exs.A1 and A2 were not written on the same day; the building and the machineries were not leased out under Exs.A1 and A2 respectively as a going concern; The lease of the building and the machineries granted under Exs.A1 and A2 do not go to constitute a composite lease and, therefore, the second defendant is entitled to the benefit of the Act and the suit for recovery of possession as framed by the plaintiff is not maintainable. In support of his contention learned Counsel relied on the decision in Ramachandran v. Lakshminarayanaswami 1976 II M.LJ. 107 and another decision in R.K. RAO v. M.S. Meyyappan . Mr. M.R. Narayanaswami, learned senior counsel for the plaintiff would contend that both the leases viz., the lease of the building under Ex. Al and the lease of the machineries under Ex.A2 commenced on the same day and both are for a fixed period of six years from 1-9-1975; the machineries covered by Ex.A2 are situated in the building covered by the lease deed, Ex. A1; the object of the lease is for tannery and, therefore, the lease must be construed as a composite lease. Learned Counsel further contended that as the building and the machineries are leased out under Exs.A1 and A2 respectively to the defendants for carrying on the tannery business, Section 30(iii) of the Act is attracted and, therefore, the defendants are not entitled to the benefit of the Act and the suit for recovery of possession is maintainable.
6. Before proceeding to consider the controversy involved in this case viz., whether the provisions of the Act is applicable to the facts of the present case, let us examine certain facts and circumstances as disclosed by the evidence in this case. Ex. A1 is the lease deed dated 30-7-1975 with regard to the building and the lease of the building under Ex. A1 is for a fixed period commencing from 1-9-1975. Under Ex.A2 the machineries embedded in the building covered by the lease deed under Ex. A1 was leased out to the defendants under Ex.A2 dt. 22-9-1975. Under Ex. A2 the lease of the machineries are also for a fixed period of six years commencing from 1-9-1975. Ex.A2 further provides that the machineries embedded in the building, leased out under ExA1, should not be removed or altered by the lessees. The recitals in Exs. Al and A2 show that the building and the machineries were leased out to the defendants for the purpose of carrying on the tannery business. A perusal of the various recitals in Exs. A1 and A2 clearly shows that the lease of the building granted under Ex. A1 and the lease of the machineries granted under Ex.A2 constitute a composite lease of the building and machineries and such a composite lease of the building and machineries was granted to the defendants to enable them to carry on the tannery business in the building covered by Ex. A1 using the machineries covered by Ex.A2. Therefore, the present case squarely falls under Section 30(iii) of the Act and the defendants cannot claim the benefits of the Act.
7. Mr. V.K. Muthuswamy, learned Counsel for the second defendant contended that inasmuch as the parties have brought into existence two separate lease deed on two different dates, one regarding the building and the other regarding the machineries, the only right conclusion that could be drawn is, that the lease of the building under Ex. A1 is an independent transaction and, therefore, it would fall under the Act The said contention of the learned Counsel for the second defendant is without force. The fact, that two lease deeds, one for the building and the other for the machineries are executed, will not make any difference in the situation and alter the nature and character of the transaction of the agreement entered into between the parties. In Balaji Cine Enterprises through its partners and Ors. v. Sakthi Talkies through its Director N.K. Gurusami Naicker and Anr. reported in 88 Law Weekly 88 the Division Bench of this Court has held as follows:
The fact, that two lease deeds one a registered instrument in so far as the building is concerned, and the other unregistered one in as far as the machinery is concerned, were executed, cannot and will not make any difference in situation or alter the nature and character of the agreement entered into between the parties. The true nature and character of the transaction is not to be judged from external features or superficial factors, but must be gathered from the intention of the parties as reflected in the entirety of the situation and a conspectus of all the factors. It is not the form, but their content, it is not the semblance but the matter that must be taken note of in determining the true intention of the parties at the time they enter into an agreement as between themselves.
If the above principle is applied to the facts and circumstances of the present case, the only conclusion possible is, that the fact that the building and machineries are leased out under two different documents, it will not take away the character of the lease as a composite lease of the building and machinery for running the tannery business. The present case has to be viewed from another angle also. Ex.A2 contains a restriction that the machineries leased out under Ex. A2 which are installed in the building covered by Ex. A1 cannot be removed or altered by the lessees. Without the machineries the building leased out under Ex. A1 cannot be put to use. Similarly, the machineries covered by the lease deed, Ex.A2, cannot be worked without the building. The second defendant cannot be heard to say that after the lease period of six years, is over, the second defendant ought to be permitted to retain possession of the building on payment of rent for the building alone without paying any rent for the machinery which cannot be removed from the premises. If the contention of the learned Counsel for the second defendant is accepted, such anomalous consequences will flow and, therefore, the contention of the learned Counsel, that the lease of the building under Ex. Al must be treated as an independent transaction, cannot be accepted.
8. Learned Counsel for the second defendant further contended that for the applicability of Section 30(iii) of the Act or even the illustrations to the said section, it is necessary that the landlord should, be actually running the tannery business and under the lease deeds, Exs. Al and A2 the landlord must have transferred the building and machineries to the defendants as a going concern and in this case, there is no evidence that under Exs.A1 and A2 a running business was transferred to the defendants. There is no substance in this contention of the learned Counsel also. There is nothing in the language of Section 30(iii) of the Act or even in the illustrations thereunder that only a demise by a landlord who is actually carrying on a business, to the tenant for the purpose of enabling him either to continue or to carry on the same business is exempt from the provisions of the Act. To accept the construction of Section 30(iii) of the Act or the illustrations thereunder in the manner contended by learned Counsel for the second defendant would be to read into them, words and expressions which are not there. Dealing with an identical question in Narayanan v. Natesa Achari 1986 II M.LJ. 18, Ratnam, J. has held as follows:
In order to qualify for the exemption under Section 30(iii) of the Act, the following requirements have to be fulfilled: (1) There should be a lease of a building. (2) Under that lease, the object of the tenant is to run the business or industry, and (3) such a business or industry should be run with the fixtures, machinery, furniture or other articles, the ownership of which is in the landlord and which are situated in the building demised. It is not the requirement that the landlord should have been actually carrying on the business on the premises prior to the demise in favour of the tenant.
The decisions reported in (1976) II MLJ 107 Ramachandran v. Lakshmanarayana and A.I.R. 1974 Madras 57 R.K. Rao v. M.S. Meyyappan relied on by learned Counsel for the second defendant have no application to the facts of the present case. Learned Counsel for the second defendant has not made any other submission except the one dealt with, above.
9. Both the Courts below, on a consideration of the entire evidence on record and the relevant recitals in Exs.A1 and A2 have rightly found that the lease of the building and machineries granted to the defendants under Exs.A1 and A2 respectively constitute a composite lease granted for the purpose of the defendants' running the tannery business and, therefore, the provisions of the Act are not applicable to the facts of the present case in view of Section 30(iii) of the Act and that the suit for recovery of possession filed by the Plaintiff is maintainable.
10. There are no merits in the second appeal and the same is liable to be dismissed. Accordingly the second appeal is dismissed, but, in the circumstances, there is no-order as to costs.