A.V.M. Limited vs Dr. Sunil P. Shenoy and Another

K.S. Radhakrishnan, J.—When the tenant is a limited company, can it claim the protection envisaged under the second proviso to Section 11(3) of the Kerala Buildings (Lease and Rent Control) Act, 1965 (for short the "Act"). That is the question mainly involved in this revision; The Respondents-landlords filed a petition u/s 11(2)(b) and 11(3),of the Act for eviction on the ground of arrears of rent and bona fide need for own occupation

It is the case of the 1 and lords-petitioned before, the Rent Controller that the petition schedule building, bearing door No. 37/1943 of the Cochin Corporation. was jointly owned by them and that the tenant-Respondent took it on lease for a period of three years from 1st June 1984, and agreed to pay a monthly rent of Rs. 850. In a partition effected between the Petitioners and others on 4th January 1987 the petition schedule building was set apart to the share of the first Petitioner and this, fact was intimated to the tenant-company at Madras. At the time of letting out the building first Petitioner was doing his Master''s Degree in Surgery at Chandigarh, and it is his case that the first Petitioner wanted to set up his practice at Einakulam after the completion of the course in January 1987. For the said purpose the period of lease was stipulated as three years in the rent deed. This fact was intimated to the tenant by the father of the Petitioners. The first Petitioner has completed his studies and intended to settle down at Ernakulam with his wife and mother, who are depending upon him for their accommodation. It was stated by the Petitioners that there was no building in the city in the name of the first Petitioner, his wife and mother. In fact, the Respondent-tenant failed to pay rent from 1st June 1987 and that a lawyer notice was issued demanding vacant possession.

The tenant filed objections mainly contending that the need set up by the Petitioners is not bona fide. It was stated that the first Petitioner is a qualified poison and he is permanently employed at Manipal and there is not even a remote chance of his coming over to Ernakulam. It was further stated that the Petitioners'' mother is staying with her daughter, and the wife of the first Petitioner is staying sit Manipal, It was further stated that there was no other alternative accommodation available in the locality to which the businessman be shifted. It was further contended "by the tenant that this was the sole source of livelihood of the tenant. It was further stated that there were no arrears of rent and there was no basis for the petition for eviction. In order to establish their case, the Petitioners relied on Exts. A-1 to A-7 documents, and contended that the tenant was in default in payment of rent in respect of the building arid also that the building is required for their own use.

The Rent Controller, after considering the entire matter, allowed the petition under Sections 11(2)(b) and 11(3) of the Act. Aggrieved by the same, the tenant filed an appeal before the Appellate Authority, who confirmed the order of the Rent Controller.

The main contention raised by learned Counsel for the revision Petitioner-tenant is that the tenant is a limited company and there is no other alternative accommodation available in the locality to which its business can be shifted, and also that the tenant is depending for its livelihood mainly on the income derived from the business carried on in this building. Learned Counsel for the revision Petitioner relied on the second proviso to Section 11(3) to establish his case, which reads as follows:

Provided further that the Rent Control Court shall not give any direction to a tenant to put the landlord in possession, if such, tenant is depending for his livelihood mainly on the income derived from any trade or business carried on in such building and there is no other suitable building available in the locality for such person to carry on such trade or business.

It is clear from the above proviso that even if a landlord establishes that the bona fide needs the building for his own occupation the Rent Control Court shall not give any direction to put the landlord in possession, if the tenant is depending for his livelihood mainly on the income derived from any trade or business carried on in such building, and there is No. suitable building available in the locality for such person to carry on such trade or business. The aforesaid second proviso can apply only in the case of a tenant who is depending for his livelihood mainly on the income derived from his trade or business.

In the instant case, the tenant is a limited company. The company is an artificial entity, having separate existence from that of the shareholders. A limited company is an incorporated body of persons. It is constituted into a distinct and independent person in law. It is not like a partnership firm, or a family, It is on point of law a person distinct from its shareholder. It is intangible. It exists only in contemplation of law, and has no physical body. Even if the trade or business of the company is affected, or it indirectly affects its shareholders, it cannot be said that those shareholders are depending for their livelihood mainly on the income derived from that trade or business. The second proviso to Section 11(3) has specifically used the words ''for his livelihood''. Therefore, it is not the livelihood of the shareholders or directors. Therefore the second proviso to Section 11(3) cannot be made applicable in the case of companies.

The legislature has specifically used the words ''depending for his livelihood''. The said words can be made applicable only to individuals who are depending for their livelihood mainly on the income derived from their trade or business, but not to a company which is an artificial entity. In the above circumstances, it cannot be contended that the tenant being a limited company is entitled to the protection under the second proviso to Section 11(3) of Act 2 of 1965.

In the instant case, the landlord-first Petitioner has proved that he bona fide needs the building for his own occupation. It is admitted that the first Petitioner has got his M.C.H. degree from the All India Institute of Medical Sciences, and that he was temporarily engaged as Assistant Professor in the Kasturba Medical College, Manipal. In fact in the letter Ext. A-2 written by the father of the first Petitioner in the year 1984 it was pointed out that the request of the tenant for five years'' extension from 1st May 1984 cannot be accepted to, in view of the fact that the first Petitioner who was then doing his post-graduate course at Chandigarh is expected to complete his course in January 1987, and to start his practice in Ernakulam. In the above circumstances, the father of the first Petitioner allowed extension of lease only for a period of 3 years, so that it voted terminate in the year 1987.

Considering the entire matter, we are of the view that as the landlord has established his bona fide requirement of the building for his own occupation, the second proviso to Section 11(3) is not applicable, since the tenant is not a natural person but only a limited company. Civil Revision Petition is hence dismissed without costs.