Balaji Cine Enterprises and Others vs Sakthi Talkies and Another

Natarajan, J.—Defendants 1 to 3 in Original Suit No. 266 of 1970 on the file of the Court of the Subordinate Judge of Dindigul are the Appellants.

The material point that arises for determination in this appeal filed by the Defendants (the first Defendant being a firm of which Defendants 2 and 3 are the partners), is whether the building in the suit property which the Appellants took on lease under a registered lease deed dated 26th July 1965, a registration copy of which has been marked as exhibit A-10 is a building within the meaning of the Madras Buildings (Lease and Rent Control) Act, XVIII of 1960 (hereinafter referred to as the Act) so as to entitle the Appellants to claim the protection afforded to tenants by the provisions of the said Act. The suit property consists of a cinema exhibition theatre with all its furniture, fittings, fixtures, cinematograph projects with all accessories and other appliances, known as Sakthi Talkies in Dindigul town. The theatre is owned by the Plaintiff who is a public limited company incorporated under the Indian Companies Act and originally, the Plaintiff was running the cinema exhibition business in the theatre through its authorised representatives. In the year 1960, the Board of Directors as well as the shareholders of the Plaintiff company decided to lease out the theatre consisting of the building, fixtures, furniture, machinery, cinema equipment and all accessories by calling for tenders by public advertisement. When, for the said purpose, tenders were called for, the first Appellant who was one of the tenderers gave the highest offer and his tender of Rs. 1,750 per month for the theatre was accepted by the Plaintiff company. Thereafter, a registered document of lease, exhibit B-1, dated 19th August 1960 was entered into between the Plaintiff and the first Appellant for a period of five years. Among other stipulations contained in the document, it was also provided that the first Appellant should pay a rent of Rs. 750 per month for the building and a rent of Rs. 1,000 should be paid for the fixtures, furniture, equipment, machinery, etc., and two separate schedules were drawn up, one containing the descriptive particulars of the building and the other containing the particulars of the machinery, equipment, etc. According to the Plaintiff, the lease under exhibit B-1 was a composite lease, even though the building and the machinery had been described in two schedules and the rent offered to be paid by the first Appellant was split up into two categories to make it notionally appear that a sum of Rs. 750 was to represent the rent for the building and a sum of Rs. 1,000 was to represent the rent for the machinery. After the expiry of the period of five years provided for under exhibit B-1 in 1965, the Plaintiff company again resolved to lease out the theatre for a further period of five years and consequently, tenders were once again called for. On this occasion also, the first Appellant responded to the call for tenders with the highest bid of Rs. 3.000 per mensem for the theatre and, very naturally, the Plaintiff accepted the tender of the first Appellant. Thereafter, as a result of the consensus arrived at between the parties, instead of the lease transaction being covered by a single deed as in exhibit B-1, two separate deeds were entered into the first one being a registered deed of lease relating to the building portion of the cinema theatre and the second one being an unregistered agreement relating to the machinery, equipment, furniture and fittings part of the theatre. Exhibit A-10 is a registration copy of the lease deed that was so entered into between the parties on 26th July 1965 and exhibit A-11 is the unregistered agreement which was contemporaneously executed by the parties on the same day. As before, a sum of Rs. 750 out of the tender of Rs. 3,000 made by the first Appellant for the theatre was apportioned towards the rent of the building under exhibit A-10 and the balance amount of Rs. 2,250 was included in Exhibit A-11 and treated as rent for the machinery and equipment. The Plaintiff would have it that, though the parties to the lease arrangement created two documents, one relating to the lease of the building and the other relating to the lease of the equipment, machinery, etc., the lease was a composite one and it was so understood by the parties when they brought into existence the two lease deeds. As the lease of the theatre granted to the first Appellant was to expire on 18th August 1970, the Plaintiff, even prior to the expiry of the lease period, decided to lease out the theatre again for a further period of five years and to call for tenders from the public for taking the theatre on lease. I he fourth Defendant, who was originally arranged as the second Defendant in the suit, came forward with an offer to take the theatre on lease on a rent of Rs. 4,000 per month. The first Appellant wanted a continuance of the lease, but when directed by the Plaintiff to canalise his offer in the form of a tender, failed to act accordingly, and it later transpired that it was with a design the first Appellant failed to submit his tender. After considering the tenders received by the Plaintiff in response to its advertisement, the Plaintiff accepted the tender of the fourth Defendant and in order to put the fourth Defendant in possession of the theatre, called upon the first Appellant, by means of a notice, dated 16th June 1970 under the original of exhibit A-14, to surrender possession of the cinema theatre on 18th August 1970. The first Appellant sent a reply, exhibit A-15, contending therein that the lease of the theatre building in his favour would be covered by the provisions of the Madras Buildings (Lease and Rent Control) Act, that as such, he was entitled to be in possession of the building on and with effect from 19th August 1970 as a statutory tenant and that he was not bound to act upto the terms of the demand made by the Plaintiff in its notice, exhibit A-14. The first Appellant followed his reply notice by instituting a suit in Original Suit No. 1122 of 1970 on the file of the District Munsif''s Court, Dindigul, praying therein for a declaration that he is entitled to the benefits of the Act and for an order of injunction in his favour from being evicted from the building. An interim order of injunction was also sought to be obtained by the first Appellant in the said suit and this led to certain incidental proceedings between the parties, but it is not necessary to make reference to them in this appeal. It was thereafter, the Plaintiff company came forward with the present suit, Original Suit No. 266 of 1970 praying that a decree for possession should be passed in its favour and further more, the first Appellant should be called upon to pay damages or profits of Rs. 12,000 for a period of two months from 18th August 1970 and future mesne profits or damages for use and occupation at such rate as may be fixed by the Court under Order XX, Rule 12 of the Code of Civil Procedure.

Resisting the action of the Plaintiff, the first Appellant contended in its written statement that though the theatre as well as the machinery, furniture, fittings, etc., belonged to the Plaintiff, the building and the machinery were never treated as a composite entity by the parties when they entered into the lease arrangement. The first Appellant contended that the rights of the parties to the action had to be determined with reference to the lease arrangement effected on 19th August 1965, and specifically pleaded that, with a view to avail to the tenant the benefits of the Act as amended in 1964, a separate and independent lease was created over the building of the cinema theatre under the original of exhibit A-10 and as a consequence of the consensus forged between the parties at the relevant time and the execution of a separate lease deed for the building alone, the first Appellant had, undoubtedly become entitled to invoke the provisions of the Act to his aid and maintain his possession of the building uninterruptedly as a statutory tenant. The first Appellant explained away exhibit A-11, the unregistered lease deed relating to the machinery, equipment, furniture, etc., as an independent transaction, dissociated, in content and context, from the lease of the building and refuted the Plaintiff''s contention that the two documents were inseparable and formed part and parcel of the same transaction so as to make the lease of the building and the equipment as components of a composite arrangement. It was expressly pleaded by the first Appellant that it did not take the building and the machinery as a going concern and further added that the Plaintiff had no right to let out the building to third parties so long as it was entitled TO be in occupation of the building as a statutory tenant. The first Appellant justified the filing of the suit, Original Suit No. 1122 of 1970 on the plea that as it apprehended forcible dispossession at the hands of the Plaintiff, it had to safeguard its rights by seeking the protection of the Court. Various other please were also projected by the first Appellant relating to inter se monetary payments and adjustments between the parties, but they do not require mention as they are not germane to the issue involved in the appeal. The claim of the Plaintiff for past mesne profits at Rs. 12,000 was attacked by the first Appellant as an unjust and unconscionable claim and with regard to future mesne profits or damages, the first Appellant�s case was that it was not bound to pay anything more than Rs. 3,000 per month.

The fourth Defendant, who was originally arrayed as the second Defendant in the suit and who was subsequently arrayed as fourth Defendant consequent on the present second and third Defendants being made parties to the suit as the partners of the first Defendant on account of the death of one C.T. Ramanathan, the managing partner of the first Defendant, filed a separate written statement and raised the plea that it was an unnecessary party to the suit and that, as it has been deprived the opportunity of running the cinema theatre from 19th August 1970 though its tender had been accepted by the Plaintiff as the highest bid, it was reserving its right to proceed against the Plaintiff by instituting separate action for recovering the loss and damages caused to it by the Plaintiff''s failure to deliver possession of the cinema theatre to it.

5 The following issues were framed for trial by the learned Subordinate judge:

(1) Whether the Plaintiff is entitled to possession prayed for?

(2) Whether the Plaintiff is entitled to the damages for use and occupation and if so, at what rate?

(3) Whether the Plaintiff is entitled to the future profits; and if so, at what rate?

(4) Whether the first Defendant is a tenant entitled to the benefits of the Madras Buildings (Lease and Rent Control) Act as contended by the first Defendant?

(5) Whether the first Defendant is entitled to any amount as claimed in paragraph 15 of the written statement and is he entitled to claim such amounts without payment of Court-fee?

(6) To what relief, if any, is the Plaintiff entitled?

The suit, Original Suit No. 1122 of 1970 which had been filed by the first Appellant in the District Munsif''s Court for declaration and injunction was also brought over to the file of the Subordinate Judge''s Court and re-numbered as Original Suit No. 258 of 1971. The Plaintiff resisted the said suit of the first Appellant and contended that the first Appellant was not entitled to be in possession of the cinema theatre after the expiry of the lease; on 18th August 1970 and that the rights and obligations of the parties had to be determined with reference to the composite lease entered into between them and not with reference to the provisions of the Madras Buildings (Lease and Rent Control) Act.

The learned Subordinate Judge framed the following issues in the said suit:

(1) Whether the Plaintiff is entitled to the declaration and injunction prayed for?

(2) Whether the third Defendant is a necessary and proper party to the suit? and

(3) To what relief is the Plaintiff entitled ?

Both the suits were jointly tried and common evidence was recorded in Original Suit No. 266 of 1970 After considering elaborately the rival contentions of the parties and the evidence relied on by the parties, the learned Subordinate Judge, held, under issues 1 and 4 in Original Suit No. 266 of 1970, that the lease in favour of the first Appellant was a composite lease, that the first Appellant was not a tenant entitled to the benefits of the Act and that, therefore, the Plaintiff was entitled to possession of the suit property. Under issues 2 and 3, the learned Subordinate Judge rendered his decision that the Plaintiff was entitled to damages and future profits at the rate of Rs. 4,000 per given on issue No. 5 as the first Appellant, when called upon had agreed to take the theatre on lease. No finding was given on Issue No. 5 as the first Appellant, when ailed upon to pay the requisite court-fee, withdrew his counter-claim with liberty to file an independent suit for the amount claimed by him. With regard to Original Suit No. 258 of 1971, the learned Subordinate Judge found all the issues against the first Appellant who was Plaintiff therein. After giving six months'' time to the first Appellant to deliver possession of the cinema theatre, the learned Subordinate Judge, by his judgment and decree, dated 10th November 1972, decreed Original Suit No. 266 of 1970 and dismissed Original Suit No. 258 of 1971. It is in these circumstances, Defendants 1 to 3 have preferred this appeal which is directed against the judgment and decree in Original Suit No. 266 of 1970.

As has been pointed out by us at the very outset of this judgment, the matter for consideration in this appeal is whether the lease of the building and the machinery, equipment, etc., by the Plaintiff in favour of the first Appellant on 26th July 1965 under the deeds, exhibit A-11 and the original of exhibit A-10, is a composite lease in respect of a going concern and thereby a transaction to which the provisions of the Act will not apply or whether the two lease deeds are disjunctive in chacter and the lease of the building effected under the original of exhibit A-10, an independent transaction which has the effect of attracting the provisions of the Act as to entitle the first Appellant to sustain his possession of the building even after the expiry of the lease period in his role as a statutory tenant. Mr. K. Parasaran, learned Counsel for the Appellants, sought to prevail upon us the stand-point of the Appellants and make us agree that the lease deeds were not composite in character and that what was taken on lease by the first Appellant under exhibit A-10 was only the building portion of the theatre and not the cinema business which was till then carried on by the Plaintiff, as a going concern. The bed-rock on which Mr. Parasaran placed reliance to raise the edifice of the Appellants'' case is that inasmuch as the parties to the agreement had expressly deviated from the pattern of the lease adopted in exhibit B-1 and brought into existence two separate lease deeds, one as regards the building and the other as regards the projector, equipment, machinery, etc. and as the rent for each item of leased property had been separately estimated and quantified, the only logical conclusion that could be drawn from such act of the parties is that the consensus arrived at by the parties was that lease of the building was to be an independent and disjointed transaction and would, therefore, squarely fall under the provisions of the Act and constitute the property leased under exhibit A-10 a building as defined in the Act. We are clearly of opinion that the contention of Mr. Parasaran in this behalf cannot be accepted. The lease agreements entered into between the parties under exhibits A-10 and A-11, whether construed in conjunction with the earlier lease under exhibit B-1 or construed independently after blacking out the backdrop afforded by exhibit B-1, will, undoubtedly, amount to a composite lease and the taking over of a going concern as such. For a clear understanding of the situation, it becomes necessary to make reference to the three lease deeds, exhibits B-1, A-10 and A-11. We have already stated that the Plaintiff company was carrying on the business of exhibiting cinema pictures in Sakthi Talkies and in the year 1960, the Directors of the Plaintiff company desired to lease out the cinema theatre and to call for tenders from intending bidders in that behalf. On such tenders being called for, the first Appellant gave the highest bid of Rs. 1,750 and, pursuant to the bid being accepted, the parties entered into a lease deed under exhibit B-1. Though the total rent of Rs. 1,750 that was offered by the first Appellant was split up into two amounts of Rs. 750 and Rs. 1,000 as representing the rent for the building and the rent for the machinery, the lease deed makes it very clear that what was leased out to the first Appellant was only the going concern of the cinema as such and that the symbolical severance of the total rent into two categories so as to make it appear that a portion of the rent amounting to Rs. 750 will go towards the rent for the building and the balance of the amount of Rs. 1,000 will go towards the rent for the machinery, was only a fictional arrangement for certain motivated reason which had nothing to do with the composite character of the transaction or the lease of the cinema theatre as a going concern. Such an arrangement which was the outcome of the consensus forged in the minds of the parties at the time they entered into exhibit B-1 had not in our opinion, been disturbed in any manner and on the other hand, had been adopted and implemented by the parties five years later also when the first Appellant was granted a further lease of the going concern for another term of five years. The only conceivable and perceptible difference between the earlier lease and the subsequent lease is that as against a total rent of Rs. 1,750 which the first Appellant had undertaken to give for the going concern under the original lease, the first Appellant agreed to give a higher rent at Rs. 3,000 per month in order to exercise his rights as before over the going concern for a further period of five years. The fact that two lease deeds, one a registered instrument in so far as the building is concerned and the other, an unregistered one in so far as the machinery is concerned, were executed, cannot and will not make any difference in the situation or alter the nature and character of the agreement entered into between the parties. The true nature and character of a 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 the 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. Viewed in this perspective, we find a multitude of circumstances which unmistakably prove the composite nature of the lease entered into between the parties, though apparently there is a splitting up so as to project an image of severalty of transactions and that the composite lease itself was in respect of a going concern. At this juncture, we may usefully refer to the pronouncement of the Supreme Court as to the test that is to be applied to find out whether lease transactions, entered into by parties under two or more lease deeds are to be treated as inseparable components of a single transaction or separate transactions having no community of interest with each other. In Sultan Brothers (P) Ltd. Vs. Commissioner of Income Tax, , the Supreme Court had to consider whether the lease of a hotel on a monthly rent of Rs. 5,950 for the building and a hire of Rs. 5,000 for the furniture and fixtures was part and parcel of a single transaction so as to attract Section 12 of the Income Tax Act for assessing the income derived by the lessor, or a transaction capable of severance in respect of the building and the furniture so as to attract Section 9 of the income tax Act for assessing the income derived by the building and Section 12 for assessing the income derived from the furniture. Dealing with the matter, their Lordships of the Supreme Court held thus:

It seems to us that the inseparability referred to in Sub-section (4) is an inseparability arising from the intention of the parties. That intention may be ascertained by framing the following questions: Was it the intention in making the lease and it matters not whether there is one lease or two, that is, separate leases in respect of the furniture and the building that the two should be enjoyed together? Was it the intention to make the letting of the two practically one letting? Would one have been let alone and a lease of it accepted without the other? If the answers to the first two questions are in the affirmative and the last in the negative then, in our view, it has to be held that it was intended that the lettings would be inseparable.

(Italics ours).

Applying such a test, we are very clear in our minds that though the Plaintiff and the first Appellant entered into two lease deeds, one relating to the building and the other relating to the machinery, the irrefragable intention of the parties was that the building and the machinery should be enjoyed together and that neither party would have even dreamt of the building alone being let out without the machinery and equipment and vice-versa the machinery alone being hired without the building being rented. We will immediately proceed to make a reference to several facts and features in the lease agreement entered into between the parties which have made us reach the conclusion that the lease was a composite one and related to the running of a cinema theatre as a going concern.

Exhibit A-6 is the letter of tender sent by the first Appellant in response to the advertisement made by the Plaintiff calling for tenders for the lease of the cinema theatre for a period of five years from 19th August 1965. The letter reads as follows:

With reference to the advertisement...quotation for the lease of the theatre, we shall be glad to take on lease the theatre, "Sakthi Talkies" along with the projector and equipments, furniture, etc., on a monthly rental of Rs. 3,000 (rupees three thousand only) with a deposit of Rs. 35,000 (rupees thirty-five thousand only) for a further period of five years from 19th August 1965 with option to extend the same for a further period of two years...It may thus be seen that what was advertised for by the Plaintiff was the lease of the theatre as a going concern and what was agreed to be taken by the first Appellant was the taking over of the theatre as such on a monthly rental of Rs. 3,000 and with option to renew the lease for a further period of two years. Apart from this, the recitals in exhibits A-10 and A-l 1 also clearly manifest that the lease of the building under the former and the hire of the machinery under the latter are inseparable components of a unitary transaction and neither agreement will have viability without reference to the other. Though exhibit A-10 apparently relates to the lease of the building, it refers to the lessors being the owners of the property, viz., the ground, cinema theatre thereon and the premises known as Sakthi Talkies. Exhibit A-10 also maker reference to the lessors having carried on the business of cinematograph exhibition under the name of Sakthi Talkies at the aforesaid theatre by themselves. It is further stated that the directors of the company had resolved to let out on lease or hire the said properties of the lessors, viz., the Sakthi Talkies theatre and premises for a period of five years. It makes reference to the compamy:

Calling for tenders to take on lease or hire the Sakthi Talkies theatre with its vacant site, building, machinery, furniture and all other fittings for a period of five years.

If the intention of the Plaintiff was to lease out the building separately and treat the hiring out of the machinery as an independent transaction, there was no need to make reference to the lease of the machinery, furniture, fitting, etc., in the advertisement affected by the Plaintiff. Under Clause (1) of the lease deed exhibit A-10, after providing that a sum of Rs. 750 should be paid on the 7th of every succeeding month as rent for the building, a further stipulation in the following terms is found:

To pay the monthly rent of Rs. 750...irrespective of the fact whether the lessees carry on their business or suspend it or altogether stop it for any reason whatsoever....

Clause (3) provides that the lessee should:

Comply with all statutory provisions relating to the cinematograph exhibition, to apply for and do all necessary acts, deeds and things for obtaining and renewing all licences required for the running of the cinema on the demised premises during the term of the lease and to comply with all notices, orders and requisitions of the Licensing Authorities in respect of the said licences for the demised premises save and except any requisition requiring any permanent alteration to the theatre as may be required by any rule under the Cinematograph Act or by any public or municipal body....

Clause (4) provides that the lessee should not use the property for any purpose other than cinematograph exhibition and incidental and allied business. Clause (6) enjoins the lessee.

not to remove any fixture or other fittings from the demised premises except for the purpose of necessary repairs.

In Clause (8) the lessee is prohibited from assigning, subletting, under letting, etc., the leased premises, but however, safeguard is made for the lessee allowing screening of pictures at the theatre on the basis of payment of rent for the premises for the period of such screening besides the usual screening on percentage basis. In another portion of exhibit A-10, it is provided that the lessors undertake to get the transfer of the licence issued by the Collector to the lessors in favour of the lessees, it may thus be seen that what was leased out to the lust Appellant under exhibit A-10 was not the mere building or the premises in which all the requisite equipment necessary for running a cinema were housed, but that a cinema house as a going concern was leased out. No other construction is possible in the circumstances of the case. If it was not the intention of the parties that the first Appellant was to run a cinema house in the demised building, it is incomprehensible as to why the lessor should enjoin the lessee, and the lessee should undertake to abide by such enjoyments, that the lessee will comply with all statutory provisions relating to cinematograph exhibition, that the lessee will do all acts necessary for obtaining or renewing cinematograph licences for the screening of pictures in the demised premises, that the lessee should not put the property to any other use except that of cinematograph exhibition and that the lessee should pay the rent of Rs. 750 to the lessor irrespective of the fact whether he carries on the business of exhibiting cinematograph films in the demised premises or not. Even so, there was no necessity for the lessor to undertake to get the cinematograph licence transferred to the name of the lessee unless the intent and purpose of the lease was to grant leasehold rights of a going cinema concern to the first Appellant. Similar tell-tale features to prove the composition nature of the transaction are to be found in exhibit A-11 as well. Exhibit A-11 makes reference to the Plaintiff company being the owners of the machinery, equipment, furniture, etc. fitted in Sakthi Talkies and the Plaintiff having carried on the business of cinematograph exhibit in the premises of Sakthi Talkies. There is also a reference in exhibit A-11 to the lessor and the lessee having contemporaneously entered into a registered lease deed of even date relating to the ground and theatre premises with the superstructure for a period of five years from 19ih August 1965. It also makes reference to the hiring of the machinery being in continuance of the lease relating to the building. The machinery which is dealt with under exhibit A-11 refers to the sound-projector equipment, furniture, etc., fixed inside the auditorium and such reference clearly shows that the machinery was not independently hired out to the lessee. The lessee is enjoined under Clause (4) to keep ail the articles of furniture and other materials at the premises in a state of good repair and further directed not to remove any item of machinery or part thereof from the premises of the theatre without the prior written consent of the lesser. Even so, exhibit A-10 also contains a clause that the lessee shall not remove any fixtures or other fittings from the leased premises except for the purpose of necessary repairs. The recitals, conditions and stipulations in the two documents are so closely inter-woven and intertwined that it is impossible to extricate the purport and effect of one document from the other and propound a theary that the transaction under each of the two documents has a viable status recognisable in law. We are, therefore, unable to agree with the contention of Mr. Parasaran that the execution of two lease deeds under exhibit A-10 and A-11 as contra-distinguished from the execution of a single lease deed under exhibit B-l in respect of the building portion and the equipment portion of the cinematograph concern, clearly reveals that the parties deliberately made a departure from the earlier agreement as reflected in exhibit B-l and that such deviation from the wanted practice is not capable of any other explanation than that the parties intended to mutilate the lease transaction into two disjunctive parts devoid of any inter se impact on each other.

From an entirely different perspective also, we are also able to notice the fallacy in the contention of the Appellants about the lease of the building being independent of the hiring of the equipment, machinery, etc. From the relevant provisions in exhibit A-10, to which we have already made reference, it can be seen that the first Appellant is obliged to use the building only for the purpose of cinematograph exhibition and further enjoined not to remove the fixtures, fittings, etc., from the leased premises except for the purpose of necessary repairs. Exhibit A-11 also contains similar restriction as to the manner in which the first Appellant is to make use of the furniture, equipment, machinery, etc., during the lease period of five years. If the Appellants were to be allowed to remain in possession of the building alone as statutory tenants, what is to become of the machinery, equipment and furniture? The first Appellant has clearly obligated itself by the contract not to remove the machinery, equipment, etc., from the premises. Can the Appellants be heard to say that irrespective of the stipulation the first Appellant will be entitled to retain the building alone as a statutory tenant and remove the fittings and furniture? Or, in the alternative, can the Appellants be heard to say that after the lease period of five years is over, the Appellants ought to be permitted to retain possession of the theatre on payment of Rs. 750 for the building alone without paying any rent for the machinery which, as we have already stated above, cannot be removed from the premises except for the purpose of repairs. If such anomalous or absurd consequences were to flow as a sequel to the contention projected by the Appellants, it is futile for the Appellants to contend that the first Appellant had requested, and the Plaintiff had conceded, that as and with effect from 19th August 1965, the lease transaction was to be severed into two and a separate lease created over the building alone so as to enable the first Appellant to bring the lease within the purview and operation of the Act.

The splitting up of the total rent of Rs. 3,000 offered by the first Appellant under exhibit A-6 into a sum of Rs. 750 as rent for the building and a sum of Rs. 2,250 as rent for the machinery and incorporating such rent particulars in exhibits A-10 and A-11 can have no significance at all. It must be remembered that under exhibit B-1 also, the rent for the building was only Rs. 750 and the rent that was allocated for the machinery was Rs. 1,000. Under exhibit A-10 the rent reserved for the building is the same sum as reserved in exhibit B-l, but the rent allocated towards the hire of the machinery is the enhanced amount of Rs. 2,250. An ambulatory glance of the reply notice, exhibit A-15, issued by the first Appellant and the averments in the written statement serves the useful purpose of exposing the fallacy of the contentions of the Appellants. Though, in exhibit A-15 and the written statement, the first Appellant has contended that the lease of the building had nothing to do with the lease of the machinery, this is what the first Appellant has stated as regards the condition of the machinery and its utilitarian value. In exhibit A-15 he has stated as follows:

The projector, furniture, equipment and fittings in the theatre are as old and useless that my client had to spend large amounts in repairing them...The frequent break-down of the machinery has cost considerable loss and inconvenience to my clients and strictly speaking, the company has no legal or moral right to claim any hire charges for the useless junk which were already old and which have become scrap over the years.

In its written statement, this is what the first Appellant has stated:

This Defendant also submits that the machinery and furniture were furnished when the theatre was erected in 1947 and the machinery and furniture considerably deteriorated and the machinery is also damaging the films of the producers...This Defendant further submits that better machinery and furniture, etc., are available at half the hire cost mentioned in the agreement of 1965....This Defendant has used very many articles of his own like generator, motor pump and other furniture, etc., as will be revealed by the Commissioner''s report.

Thus, on his own admissions, the first Appellant has characterised the machinery as junk and of scrap value. Yet, strangely enough, the first Appellant has offered a hire charge of Rs. 2,250 for this junk and scrap as against the hire charge of Rs. 1,000 given by it under exhibit B-1. It cannot be contended by the Appellants that between 1965 and 1970 the machinery which was worth paying a hire of Rs. 2,250 per month had suddenly became junk and scrap, especially when the first Appellant had also set forth in exhibit A-15 and the written statement that it had been periodically spending amounts for repair and maintenance of the machinery and the furniture and that by such acts, the first Appellant has been keeping the furniture, fittings and equipment in the best condition possible. If the lease arrangement was not a composite one but was a double-phased one, one phase relating to the building and the other phase relating to the machinery, the first Appellant would not have committed the folly of entering into a ludicrous transaction of paying enhanced rent of Rs. 2,250 for the junk and scrap that went in the name of equipment, machinery and furniture fitted in the theatre. It is therefore, clearly perceptible that the increased rent of Rs. 3,000 which the first Appellant offered as against the rent of Rs. 1,750 under exhibit B-1, was intended to cover the lease of the theatre as a going concern for a further period of five years, and not as representing a turn of Rs. 2,250 for the machinery alone and a sum of Rs. 750 for the theatre. This is yet another circumstance which makes the case of the Appellants a hopelessly untenable and unsustainable one.

Having adverted to the salient features which are germane for consideration in deciding the controversy, we may, with advantage, refer to a decision of the Supreme Court and two judgments rendered by this Court itself, of which one was rendered by one of us. Uttamchand Vs. S.M. Lalwani, was a case where the nature of the lease of a dal mill building with fixed machinery in sound working order and accessories had to be determined in order to find out whether the dal mill was an accommodation within the meaning of Section 3(a) of the Madhya Pradesh Accommodation Control Act, 1955 and whether the Rent Control Authority had jurisdiction to determine the standard rent Rejecting the contention that the lease was essentially concerned with a lease in respect of the dat mill building and that what was really leased out was the mill as such, the Supreme Court held that the dominent intention of the parties when they entered into a transaction was the primordial factor for consideration to decide a question as to whether a lease agreement between the parties in respect of a building fitted with machinery, etc., was to be deemed a lease of the building portion alone or the building and the machinery as a going concern. Dealing with the case, the Supreme Court held as follows:

It is not a case where the subject-matter of the lease is the building and along with the leased building Incidentally passes the fixture of the machinery in regard to the mill; in truth, it is the mill which is the subject-matter of the lease, and it was because the mill was intended to be let out that the building had inevitably to be let out along with the mill....This is not a lease under which the Appellant entered into possession for the purpose of residing in the building at all; this is a case where the Appellant entered into the lease for the purpose of running the dal mill which was located in the building....The fixtures described in the schedule to the lease are in no sense intended for the more beneficial enjoyment of the building. The fixtures are the primary object which the lease was intended to cover and the building in which the fixtures are located comes in incidentally.

The same line of reasoning can be adopted in the instant case also. Of necessity, the projector, sound equipment, furniture, etc., are essential pre-requisites for the purpose of running a cinema house, and it is while taking such Items for the purpose of running the cinema that the first Appellant had also to take a lease of the building in which the machinery, equipment and furniture were located. The apportionment of a higher rent for the machinery than for the building would also justify the inference that what was really sought to be taken on lease by the first Appellant was not the building as such, but the cinema house itself as a going concern.

Abdul Gaffoor Sahib v. Pals Theatre 84 L.W. 294, which was decided by one of us is a case where the lessee of a cinema theatre held over the property under the pretext of being a statutory tenant under the provisions of the Madras Buildings (Lease and Rent Control) Act and the lessor of the cinema house objected to the Board of Revenue granting renewal of C Form licence in favour of the lessee alleging that he had terminated the lease and as such, the possession of the quondam lessee was unlawful and therefore, the order of the Board of Revenue granting the C Form licence should be quashed by the High Court in its exercise of jurisdiction under Article 226 of the Constitution of India. To decide the controversy, the question had also to be gone into, as to whether the lessee of a cinema house and the equipment therein compositely leased out to him by the owner of the cinema house was entitled to claim that such portion of the lease as related to the building was severable from the other clauses in the lease deed relating to the equipment and afforded ground to the lessee to contend that the lease of the building ought to be governed by the provisions of the Madras Buildings (Lease and Rent Control Act of 1960. Repelling the contention, it was held that if the lease is a composite one, in the sense that the lease comprised of both the cinema house and the equipment, the lease is outside the purview of the Madras Buildings (Lease and Rent Control) Act XVIII of 1960. We have already indicated that though the lease of the building and the machinery were apparently sought to be effected by the Plaintiff in favour of the first Appellant under two lease deeds in the instant case, nevertheless, the two lease deeds are part and parcel of a single transaction and are, therefore, as much composite in character as the transaction would be if it had been reduced to writing in a single deed.

Another Bench of this Court consisting of Ismail and Palaniswamy JJ., had also to consider in Pals Theatres v. Abdul Gaffar Sahib 86 L.W. 68, the very same controversy as is referred to above, in the appeal which was preferred by the tenant to assail the finding of the trial Court that a composite lease of a cinema house together with machinery, fittings, furniture, etc., created a tenancy which fell outside the purview of the Madras Buildings ''Lease and Rent Control) Act. After elaborately considering the case law on the subject, the Bench held that a lease of a cinema house together with fixtures, equipment, furniture, projector, amplifier, speaker, monitor, screen, etc., was unmistakably a lease of a composite character and as such, the lessee was not entitled to contend that the lease comprised a plurality of transactions and, therefore, he was entitled to remain in possession of the building even after the expiry of the lease period by invoking to his aid the protection offered to statutory tenants by the Madras Buildings (Lease and Control) Act. The decisions rendered in these judgment are in pari materia to the conclusion reached by us in the instant case and indeed they afford reinforcement to our decision in the case. We have, therefore, no hesitation in rejecting the contention of the Appellants that the lease of the building under exhibit A-10 was independent of the lease of the machinery under exhibit A-11 and that as such, the Appellants are entitled to remain in possession of the building after the expiry of the lease period, and justify such possession of theirs on the pretext that the property demised under exhibit A-10 is a building as defined under the Act and thereby confers the rights of a statutory tenant on the first Appellant The learned trial Judge hat come to the right conclusion on this aspect of the matter and we, therefore, affirm his findings on issues 1 and 4.

Having failed to convince us on the main ground of defence taken by the Appellants in the case, Mr. Parasaran would, hesitantly contend that in any event, the learned Subordinate Judge ought not to have awarded as damages and future mesne profits to the Plaintiff at the rate of Rs. 4,000 per month. This contention is also equally devoid of merit Admittedly, the fourth Defendant was one of the persons who came forward with a tender to take the cinema house on lease for a period of five years with effect from 19th August 1965. It is common ground that in the said tender, the fourth Defendant offered to pay a consolidated sum of Rs. 4,000 for the cinema theatre together with its machinery, equipment, furniture etc., and such offer being the highest that was received by the Plaintiff, was accepted by the directors of the Plaintiff. Had it not been for the cantankerous stand of the first Appellant the Plaintiff would have put the fourth Defendant in possession of the cinema concern and derived from him the lease amount of Rs. 4,000 every month in those circumstance there is no grace at all in the Appellants trying to contend that the learned trial Judge ought not to have fixed the damages for the period of two months prior to the filing of the suit and the future mesne profits or damages at the rate of Rs. 4,000 per month till date of delivery of possession. The Appellants themselves had not adduced any evidence to show that the offer of the fourth Defendant was a bogus ore and that the Plaintiff could not have derived a rent of Rs. 4.000 per month by leasing out the theatre and the equipment. As a matter of fact Mr. Parasaran frankly concedes that he is unable to place his hands on any portion of the evidence in the case to contend that the award of Rs. 4,000 per month as damages and future mesne profits h in any manner excessive or unjustified. We see no justification, therefore, to interfere with the finding of the learned trial Judge on the quantum of damages that is to be awarded to the Plaintiff for the period beyond the expiry of the lease and till such time the Plaintiff is able to obtain delivery of possession of the demised property.

In the result, we find no merit in the appeal and consequently, the appeal is dismissed with costs 10 the Plaintiffs. The Appellants are granted three months'' time from this date to vacate the premises.