Balak Ram vs B.N. Gupta

T.U. Mehta, J.—By order dated 26-4-1976 the Hon''ble the Chief Justice sitting as a Single Judge of this Court has referred this matter to a larger Bench as, without expressing any opinion in the matter, he has accepted the contention of the learned Advocate of the Petitioner to make this reference with a view to further consider the single Judge decision given by this Court in Civil Revision No. 54 of 1974 Prem Chand v. Beni Madhav now reported in ILR (1975) H.P. 670. The Hon''ble the Chief Justice sitting as a single Judge has held in that case that it is only if the building governed by the provisions of the East Punjab Urban Rent Restriction Act, 1949, is used exclusively for the purpose of business or trade that it can be described as a "non-residential building". It is further observed in that decision that this is apparent from Section 2(d) of the Act. The said decision further proceeds to say that if the building is used partly for a residential purpose and partly for the purpose of business or trade, it cannot be classed as a non-residential building and must, therefore, be treated as a residential building within the meaning of Section 2(g) of the said Act. Further it is held therein that the contention that the entire building was let out to the Petitioner for the purpose of bakery and it is the purpose for which the building was let out which determines whether it is residential building or non-residential, is not agreeable because the definitions set out in Section 2(d) and Section 2(g) of the said Act Cleary point to the materiality of the nature of the user. This decision now comes up before us for re-consideration in this revision petition.

At the outset it would be proper to make a brief reference to the facts of this particular case. The Petitioner of this petition is a tenant of the opponent Shri B.N. Gupta who is the landlord. This landlord preferred a petition for eviction before the Rent Controller under the Himachal Pradesh Urban Rent Control Act, 1971 (Act 23 of 1971) which is hereinafter referred to as "the Act". The grounds for eviction were, inter alia, that the disputed premises were required bona fide by the landlord for his own occupation, that these premises were originally leased out to the tenant for business purpose only and he is rendered liable for eviction because after the commencement of the Act he has used the premises for a residential purpose, that is, a purpose other than that for which they were originally leased, that the tenant has carried out some alterations and additions in the premises materially affecting their value and utility, that the premises require repairs in form of substantial additions and alterations which could not be carried out without eviction of the tenant and that the tenant has defaulted in making the payment of the rent of the premises.

The Rent Controller granted the landlord''s petition and ordered eviction on proof of some of these grounds with the result that the tenant approached the Court of the District Judge at Simla who has come to the conclusion that the landlord requires the premises for his own bona fide occupation, that the tenant has committed such acts in form of alteration and addition which would materially impair the value and utility of the premises in dispute, that the premises have been used by the tenant for a purpose other than that for which they were let out, and that the premises require repairs, which cannot be carried out without eviction. Thus the order of eviction, which is passed by the Rent Controller, has been confirmed by the District Judge with the result that the tenant has preferred this revision petition.

Since the whole of this revision petition is referred to a larger Bench, we propose to decide all the contentions which are raised by the parties in this petition.

The first contention of law which goes to the root of the question, and which involves the reconsideration of the decision given by the learned single Judge in Prem Chand v. Beni Madhav (supra), is that the disputed premises are not non-residential premises as defined by Section 2(d) of the Act because the character of these premises can be determined, not by reference to the actual use to which they are put by the tenant, but by reference to the original purpose for which they were initially let out. This being the most important question of law involved in this petition we propose to take it up first for our consideration.

It may be noted here that the provisions of the Act which are relevant to this petition are peri materia with the relevant provisions contained in the East Punjab Urban Rent Restriction Act, 1949, which are considered in the case of Prem Chand v. Beni Madhav (supra).

It is the finding of the learned District Judge that the disputed premises were taken on lease by the tenant much before the present landlord became the owner thereof. The premises consist of one set in a building, which is of about four floors, and contains many other sets. The learned District Judge has further found that when the original landlord rented the disputed premises to the tenant, they were rented only for the purpose of business. The learned District Judge has further found that some time after taking the premises on lease, the tenant converted the use of these premises for a mixed purpose that is, for the purpose of carrying on his business as well as for the purpose of his residence. For doing this the tenant constructed some wooden partition in the premises, and began to reside along with his family in the back portion of the premises. Evidence reveals and the same is also not in dispute, that the tenant was married when he was in occupation of the premises and he continued to reside in the premises along with his family upto the date of the institution of the original petition before the Rent Controller. A portion of the premises is used by him for his kitchen. The alterations which are carried out by the tenant in the premises for the purpose of this residence are, in the words of the learned District Judge as under:

From aforesaid evidence it is clear that there is no kitchen in the premises in question and the verandah on the back side is being used as kitchen. Shri Surjeet Singh R.W.5 has stated in cross-examination that the partitions in the ground floor are made by putting vertical studs from floor to ceiling and placing ply-wood and packing cases planks upto the height of 6 1/2 ft. He has further stated that by keeping aside the wooden partition, it would look like a shop. He has unequivocally stated that by putting the wooden partition, in the premises, the value of the premises has been impaired.

The evidence referred in the above quoted portion has been accepted by the learned District Judge and, therefore, he has come to the conclusion that the tenant has materially altered the premises in question and has also put it to a use for a purpose other than that for which they were originally leased out.

The learned Advocate of the tenant, who is the Petitioner in this revision, contended that for the purpose of deciding whether the premises are covered by the definition of "residential building" or "non-residential building" the court has to look to the original purpose for which they were let out and not to the subsequent use to which the premises are put in contravention of the original contract of lease and, therefore, if the original contract of lease is taken into account for determining the character of these premises they should be held as covered by the definition of "non-residential building" as given in Section 2(d) of the Act. It was further pointed out that so far as non-residential building is concerned, the provisions of Section 14 of the Act clearly show that eviction therefrom cannot be ordered on the ground of personal requirements of the landlord.

It is true that if the disputed premises are held to be a "non-residential building" then the landlord is not entitled to claim eviction on the ground of personal requirements because Sub-section (3) of Section 14 contemplates eviction on the ground of personal requirements only in case of a "residential building". It is, therefore, pertinent to consider the definitions of a "nonresidential building" and "residential building" as given in the Act.

Section 2 of the Act gives certain statutory definitions. Clause (d) of this section defines a "non-residential building" as under:

(d) ''non-residential building'' means a building being used solely for the purpose of business or trade:

Provided that residence in a building only for the purpose of guarding it shall not be deemed to convert a ''non-residential building'' to a residential building.

Clause (g) of Section 2 defines a "residential building" as under:

''residential building'' means any building which is not a non-residential building.

From these two definitions it is evident that all buildings which are not "non-residential" should be classified as "residential building". This is so because the definition of the expression "residential building" is couched in a negative language and the definition of the expression "non-residential building" is couched in a positive language going to show that only that building which is being used solely for the purpose of business or trade is a. non-residential building. Therefore, what is material to see is whether the disputed premises fall within the definition of "non-residential building". If it does not fall within that definition then it must be held to be a "residential building".

Now the definition of non-residential building which is given in Clause (d) obviously puts emphasis not on the original purpose for which it was leased out but on the actual user to which it is currently put. The use of the continuous present tense for the purpose of user employed in the grammatical construction of the definition contained in Clause (d) makes this point beyond any doubt. The expression "building being used" clearly evidences the intention of the legislature that if a building is found to be in use for the purpose of business or trade then irrespective of the original purpose for which it was initially let out. it must be classified as a "non-residential building". The definition thus makes a distinction between the original purpose of the lease and the actual user of the building in question. This distinction has been kept in mind by the legislature throughout the scheme of the Act. This is evident by the definition of the word "building" which is given in Clause (a) of Section 2. This definition is as under:

(a) ''building'' means any building or part of a building let for any purpose whether being actually used for that purpose or not, including any land, godowns, out-houses, or furniture let therewith but does not include a room in a hotel or boarding house;.

In this definition the legislature has shown by using the clause "for any purpose whether being actually used for that purpose or not" that it was very lively to the distinction between the original purpose for which the building was let and the actual use to which it has been put. This distinction is throughout kept in mind by the legislature because the provisions of Section 14 also make distinction in case of eviction from a "non-residential building" and from a "residential building". This distinction was in the mind of the legislature even at the time of enacting Section 12 which says that no person shall convert a residential building into a non-residential building except with the permission in writing of the Rent Controller. Thus in our opinion when this Court observed in Prem Chand v. Beni Madhav (supra) that the definitions set out in Section 2(d) and Section 2(g) of the Act clearly point out to the materiality of the nature of the user, the said observation was quite correct.

The learned Advocate of the Petitioner tenant contended that when Clause (d) of Section 2 of the Act refers to the use of the building in question it refers to that use which was originally contracted for at the time when the building was initially given on lease. It was pointed out that the use contemplated by Clause (d) cannot be construed as the use in contravention of the original contract. However this argument is not acceptable in view of the continuing present tense which is employed in the grammatical structure of the language contained in Clause (d). This continuous present tense employed with reference to the user of the building negatives the idea of original contract, and stresses only the present use to which the building is put irrespective of the original contract. It is evident by reference to the provisions contained in Clause (ii)(b) of Section 12(2), which makes a tenant who uses the building for the purpose other than that for which it was leased liable to be evicted, that the legislature did not want to allow a tenant to make use of a building for any purpose other than that for which it was originally leased. This intention of the legislature, therefore, lends further support to the view that while giving definition of a non-residential building in Clause (d) of Section 2 the legislature wanted to put emphasis only on the current actual user and not on the original purpose for which the building was rented.

Reliance was placed on behalf of the Petitioner tenant on the Full Bench decision given by the High Court of Madras in Dakshinamoorthy v. Thulja Bai A.I.R 1952 Mad. 413, The said High Court has held in this case that for the purpose of determining whether a building is residential or non-residential one has to bear in mind the following salient considerations:

Where there is an instrument of tenancy specifically and explicitly declaring the purpose of the letting as residential or non-residential, no difficulty generally arises.

Where there is no such instrument of tenancy the question will have to be considered on the basis of direct evidence aliunde concerning the purpose of the letting, which may be adduced in a case.

If no such evidence too is forthcoming, the Court can only look at the evidence concerning the user of the premises by the tenant down to the date of the application for eviction as acquiesced in by the landlord. For such user and such acquiescence afford a safe basis for an inference of agreement between the parties as to the purpose of the letting.

Where there is evidence of such user, but there is no evidence of such acquiescence, the structural design, the antecedent user of the building by the landlord as known to the tenant and other surrounding circumstances, if any, will also have to enter into the determination of the question whether the building is or is not residential.

Difficulty may sometimes still remain, i.e. after applying the tests above indicated, if the building is found let for both kinds of purposes, residential and non-residential, no distinction being made between one part as let for one purpose and the other for the other purpose. In such a case what has to be determined as a question of fact is, what was the real, main and substantial purpose of the letting?

That Court has further observed that what is at the inception a residential building may well become a non-residential one by force of the terms of a letting, and any conversion, after the letting, of a residential building into a non-residential building may well take place within and only within the limits which the statute prescribes. The Court further went on to add that if prior to a letting a building happens to have been of one character it must for ever keep that character irrespective of what the effect of the letting or of the acts of the parties subsequent to the letting may be, is difficult, if not impossible position. The original design of the structure may have been one suitable to residence, but if by letting it becomes non-residential in character there is no reason why one may not take it as such for the purpose of Section 7 Sub-section (3) of the Madras Buildings (Lease and Rent Control) Act (XV of 1946). It is finally stated in that case that if a landlord had let out a building for residential or non-residential purpose, as the case may be, it is only fair that when he seeks an order directing the tenant to put him in possession of the property, he has to show that he fulfils the requirements of Sub-Clause (i) or (ii) of Clause (a) of Sub-section (3) of the Section 7.

In our opinion this decision does not apply to the facts of the present case because it is evident by reference to the provisions of the Madras Building (Lease and Rent Control) Act as discussed in the decision that these provisions were quite different from the provisions which are found in our Act. The Madras Act did not contain a definition of residential building. It, however, defined the word "building" as meaning "any building or hut or part of a building or but, let or to be let separately for residential or non-residential purposes". It was in view of this want of statutory definition of the expressions "non-residential building" and "residential building" that the Madras High Court was required to evolve certain formula for the purpose of deciding whether a building governed by the Madras Act could be construed as a residential building or a nonresidential building. So far as our Act is concerned, there is no such difficulty because the Legislature has provided us with clear cut definitions of these two expressions and since these definitions are in our opinion very clear in emphasising the actual current use of the building and not the original purpose for which they were let out, we are of the opinion that this Madras decision is of no help to us in construing the relevant provisions of the Act.

We are supported in the view which we are taking by several decisions to which we shall now make a reference. In Sewa Singh v. Ranbir Kaur and Anr. reported in 1970 R.C.R. 423 the facts show that the Appellant tenant Dr. Sewa Singh was a medical practitioner and his landlords had brought ejectment proceedings against him, inter alia, on the ground of personal requirements. The Rent Controller held that the landlords required the premises for personal use but since the building was a Scheduled building within the meaning of the East Punjab Urban Rent Restriction Act, 1949, no order of ejectment could be passed. This order of the Rent Controller was confirmed by the Appellate Authority but when the matter went to the High Court the High Court held that the premises which were originally let out for residential purposes could not at the option of the tenant be converted into a Scheduled building. The High Court further opined that even though a part of the premises was used for business-CM/H-residence purposes it was a casual user. The High Court accordingly allowed the petition and ordered eviction. The matter then went to the Supreme Court and Shah, J. speaking for the Court, observed that the definition of the expression "scheduled building" as given in Section 2(h) of the Punjab Act was "a residential building which is being used by a person engaged in one or more of the professions specified in the Schedule to this Act, partly for his business and partly for his residence". Interpretting this definition the Court observed as under:

It is impossible to hold on the language of the definition that the original purpose of the tenancy is decisive of the question whether it is a Scheduled building. In terms it is enacted that a residential building will be deemed to be a Scheduled building if it is used by a person engaged in one or more of the professions, partly for his business and partly for his residence. The building in the occupation of the tenant is undoubtedly residential and on the evidence it is partly used for his business.

These observations fully apply to the facts of the case under our consideration and clearly show that even on the interpretation of the language used in Clause (d) of Section 2 of the Act the original purpose of the tenancy cannot be decisive of the question whether the premises in question are residential or non-residential. The same view is taken by a Himachal Bench of the Delhi High Court in John Tinson and Co. Ltd. Simla v. Amar Chand Sud and Anr. reported in 1971 R.C.R. 33 and a Division Bench of Haryana and Punjab in Niranjan Kaur v. Dr. Siri Ram 1968 P.L.R. 973, The following observations which are made therein after considering the definitions given in Clauses (d) and (g) of Section 2 of the East Punjab Act are found to be quite opposite to the contentions raised on behalf of the tenant-

It is evident from the definition of these two expressions that non-residential buildings are those that are used solely for the purposes of business or trade, and the remaining, for the purposes of the Act, are residential buildings. It is further clear from the definition of the expression ''non-residential building'', read along with the proviso in Clause (d) of Section 2, that such a building is solely to be used for the purposes of trade or business and the only residence that is permitted by this provision in such a building to save it from being converted in to a ''residential building'' is residence ''only for the purpose of guarding it''. So that residence in a ''non-residential building'' not for the purposes of guarding it, would not save it from being converted into a ''residential building''. The meaning of Section 2(d), with the definition of the expression ''non-residential building'' read with the proviso under it, is that such a building remains ''non-residential building'' when two conditions are fulfilled (a) it is solely used for the purpose of business or trade, and (b) if any part of it is to be used for residence, it can only be used for the purpose of guarding it otherwise it, changes its character from a ''nonresidential building'' to a ''residential building''. This is the obvious meaning of the definition of the expression ''non-residential building'' in Section 2(d) of the Act.

In view of the above, we conclude that the character of the suit premises should be determined with reference to the actual user found on the date of eviction petition and that therefore we confirm the view taken by this Court in Prem Chand v. Beni Madhav (supra).

Since in view of what is stated above the character of the disputed premises is found to be residential, the question which next arises to be considered is whether in such cases the landlord would be required to prove that he needs these premises for his bona fide personal use as contemplated by Sub-section (3) of Section 14. In our opinion if the premises which were originally leased solely for the purpose of trade and business are subsequently found to be under use for a mixed purpose, namely, business as well as residence, and are, therefore, held to be "residential building" as defined by Section 2(g) of the Act on the footing that the tenant has, subsequent to the commencement of the Act used them for the purpose other than that for which the premises were leased, it is not necessary for the landlord to prove bona fide personal requirements for the purpose of securing eviction under Sub-section (3) of Section 14 because in that case the matter would be governed by Clause (ii)(b) of Section 14(2) of the Act which provides totally an independent ground for eviction. However, in this case the landlord has according to the finding recorded by the learned District Judge, proved his bona fide personal requirements of the disputed premises. This being a pure finding of fact which fact both the authorities have concurrently recorded and there being nothing illegal or improper in this finding, it would not be open to this Court to interfere with the same sitting in revision u/s 21(5) of the Act. In our opinion, therefore, the Petitioner tenant would be liable to be evicted even on the ground of bona fide personal requirements of the landlord.

The learned District Judge has held that since the tenant has used the suit premises for a purpose other than that for which they were originally leased he has become liable to be evicted even under Clause (ii)(b) of Section 14(2) of the Act. In this connection it was contended on behalf of the tenant that liability to be evicted under Clause (ii)(b) of Section 14(2) would arise only if the changed user contemplated by that clause is made after the commencement of the Act. According to the learned Advocate of the tenant, this changed user is made by the tenant soon after the lease was created and much before the Act came into force. According to him, therefore, Clause (ii)(b) of Section 14(2) has no application to the facts of the present case. This argument is totally devoid of merits, because even after the application of the Act the tenant is found to have continued the changed user because it is an admitted fact that upto the date of the petition he has continued to use the premises for his business as well as for his residence. It is, therefore, evident that even after the commencement of the Act he has used the premises for a purpose other than that for which they were leased to him. In this connection it should be noted that it is not merely the commencement of the changed user but the changed user itself which is contemplated by Clause (ii)(b) of Section 14(2) of the Act.

As already stated above the landlord has also claimed eviction on the ground that the tenant has made such alterations and additions in the disputed premises as are likely to impair materially the value and utility thereof. The learned District Judge has accepted this contention of the landlord by observing as under:

The tenant has without the permission of the landlord converted a verandah in the premises into a closed room and thus he has made material alteration of the premises in contravention of the terms of the lease i.e. the premises in question were let out for the purpose of running a shop only as admitted by the parties. The tenant has converted verandah into kitchen and converted room into cabins being used as store room and living room and thus has materially altered the premises in question. The learned Rent Controller has correctly decided issue No. 2 in favour of the Petitioner.

We find that this approach of the learned District Judge is not correct. It is obvious from the above referred quotation taken from his judgment that the learned District Judge is of the opinion that material alterations in contravention of the terms of the lease and conversion of certain portion of the disputed premises into cabins and living rooms would be per se sufficient for coming to the conclusion that the value and utility of the premises are materially impaired. This is not what Clause (iii) of Section 14(2) contemplates. This clause says that a landlord can claim eviction if "the tenant has committed such acts as are likely to impair materially the value or utility of the building or rented land." What is required to be proved under this clause is that the act alleged to have been committed by the tenant was such as was "likely to impair materially" the value or utility of the premises. This clause therefore, clearly suggests that the Court should come to a specific finding that by reasons of the acts committed by the tenant the value or utility of the premises has been materially impaired. From the mere fact that a portion of the premises is converted into cabins or living rooms by making alterations one cannot jump to the conclusion that thereby the value or utility of the premises has been materially impaired. So far as the facts of this case are concerned, we have already noted above the nature of the alterations made by the tenant in the premises. There is nothing in evidence to show that these alterations have materially impaired the value and/or utility of the premises. In our opinion, therefore, the landlord could not have claimed any eviction decree on the ground contemplated by Clause (iii) of Section 12(2) of the Act.

The other ground on which the eviction is granted by the learned District Judge is the one contemplated by Clause (iii) of Section 14(3)(a) which stipulates eviction on the ground of bona fide requirements of the premises for the purpose of making substantial additions and alterations which cannot be carried out without the premises being vacated. On this question the learned District Judge has, after summarising the evidence produced by the parties, made only the following observations:

The learned Rent Controller has, to my mind, come to correct conclusion that the Petitioner requires the premises in dispute for carrying out repairs which cannot be done without getting premises vacated. He has correctly decided issue No. 5.

Evidence shows that the back wall of the building in which the suit premises are situated, require some strengthening. The evidence also reveals that this wall could be strengthened even without pulling it down and reconstructing the same. If the back wall was "required" to be pulled down for the purpose of reconstruction, the landlord would have sought the eviction of all the tenants residing in the building. But he has obviously not done so. Therefore, it follows that it was not necessary to pull down the back wall for the purpose of reconstruction and the required strength to the back wall could have been supplied even without getting eviction of all the tenants. Under these circumstances, we are of the opinion that the repair work which was required to be carried out to the back wall of the disputed premises is not proved to be such which could not have been carried out without obtaining the eviction of the Petitioner. In our opinion, therefore, the landlord cannot claim eviction on the ground contemplated by Clause (iii) of Section 14(3) (a) of the Act.

The learned Advocate of the opponent landlord contended that the tender of the rent made by the tenant was not proper inasmuch as he tendered the rent even for the period subsequent to the petition. We do not find any substance in this contention.

The result, therefore, is that the opponent landlord is found entitled to the decree of eviction on his bona fide personal requirements as well as on the ground of change of user after the coming into operation of the Act, and therefore, the decree for eviction on these two grounds must be confirmed. This revision application, therefore, fails and the rule is discharged with costs.