Bharat Insurance Co. Ltd. vs Bivathu and Others

Govinda Pillai, J.—The Defendant is the Bharat Insurance Company, Ltd., represented by its Secretary of the Ernakulam branch. The plaint schedule building was given on rent to the Bharat Insurance Company Ltd., by one Shri Marath Achutha Menon, who was then having possession of the building as a trustee of the trust to which the building belonged. The rent agreed was Rs. 50/- per mensem from 1-4-1943. Shri Achutha Menon, subsequently sold the property to one Ismail Sait on 12-11-1120 under Ex. A sale deed. Even before the sale of the house, Shri Achutha Menon had issued a notice for surrender of the building. But the Defendant sent a reply demanding an extension of tenancy for seven months from 25-2-1945 under the provisions of the Non-residential Building Rent Control Order of 1118. Shri Achutha Menon moved the Rent Controller for an order to disallow the extension claimed. But his petition was dismissed and the appeal filed by him against that order was also dismissed. Thus the Defendant-Company was entitled to retain possession of the building till 25-9-1945.

After obtaining the sale deed Ismail Sait who is now dead and whose legal representatives are the Plaintiffs had demanded of the Defendant to surrender possession of the building as they wanted the same for their personal use. This notice was sent on 21-9-1945. It is Ex. XII. The Defendant straightaway sent a cheque for Rs. 50/- to cover the rent for September 1945; but it was returned unaccepted since the landlord was unwilling to continue the tenancy any longer after the date of the termination of the extended period. The tenancy had terminated on 25-9-1945 and so the Plaintiffs claimed immediate possession by the suit. They claimed rent at Rs. 50/- per mensem from the first September till 25th September 1945. Thereafter they claimed compensation at the rate of Rs. 150/-a month for use and occupation. Interest on the amounts was also claimed.

The Defendant contended that the building was rented not exclusively for office use, but partly for office use and partly for the residence of the Secretary, that only four rooms on the ground floor were used as office and the remaining portion of the building and the premises were used for residential purposes, that the term of tenancy was therefore governed by the provisions of the Cochin House Rent Control Order of 1117, that the building was occupied only from 10-4-1943, that in the petition filed by Shri Achutha Menon, the Rent Controller and the appellate authority had found that this was not a building falling under the purview of the House Rent Control Order, that this finding was incorrect, that the Company had claimed extension of the period of their tenancy under the Non-residential Building Rent Control Order by notices Exs. VII and VIII, that the period mentioned therein would expire only on 25-11-1946, that the suit was premature, that there was no valid notice issued at any time to determine the tenancy, that the Plaintiffs were not entitled to any interest as the rent happened to be in arrears because of the refusal of the Plaintiffs to receive the same and that the compensation claimed for use and occupation was in any event excessive.

The trial Court found that the case was governed by the Non-residential Rent Control Order of 1118, that the Defendant was entitled to retain possession of the property only till 25-9-1945, that the Plaintiffs could therefore claim for eviction from 26-9-1945, that the suit for eviction was maintainable, that the Defendant was entitled only to exercise his right for renewal only once, that from 26-9-1946 the Plaintiffs were entitled to compensation for use and occupation at Rs. 150/- a month and that the interest claimed was allowable. The suit was therefore decreed as prayed for with costs to the Plaintiffs. On appeal against this decree, the learned Temporary District Judge of Anjikaimal confirmed the trial Court decree.

In appeal before this Court it was first argued that this suit for eviction and compensation was not maintainable as the civil Courts had no jurisdiction to entertain such a suit after the Proclamation 4 of 1122 (C). This is not made the subject matter of an issue because the proclamation itself was passed with effect from 11-2-1122,. that is, after the present Suit was filed. But this objection was taken as ground No. 6 in the memorandum of appeal.

The argument was based on Clause 2 of Section 7 of the Proclamation which directed the landlord who sought to evict his tenant to apply before the Rent Controller for a direction in that behalf. Nowhere in the Proclamation is there any indication to show that the jurisdiction of the civil Courts is taken away by the Proclamation. The Courts would be entitled to entertain suits for eviction, determine the rights between the parties and then pass a decree for eviction; but in execution, it would be open to the Defendant to contend that the decree for that purpose could not be executed as the circumstances under which eviction could be allowed were given in the Proclamation. That does not mean that the jurisdiction of the civil Courts to entertain suits of this nature and pass appropriate decrees is ousted.

The Rent Controller could give only an order for eviction. He is not entitled to determine other rights of the parties such as the amount of the arrears of rent which the tenant has to pay. The jurisdiction of the Rent Controller is limited to the enquiry of the conditions mentioned in Section 7 of the Proclamation 4 of 1122 (C).

This has been the subject matter of three decisions of the Cochin High Court, the earliest of which is - Varunni v. Ouseph 1122 Cochin LR 252(A). It clearly says that the House Rent Control Order only regulates the method of relief and does not oust the jurisdiction of the civil Courts from entertaining a suit for eviction from a house. This dictum is followed in two other decisions, - Eastern Trading Co. Ltd. v. Abdul Wahab and Co. 1122 Cochin LR 436(B) and - Abdul Kadir Yosuff v. Abdul Karim Mohammad 1122 Cochin LR 477 (C). It was further pointed out in - 1122 Cochin LR 477 (C)'', that the House Rent Control Order or the Proclamation 4 of 1122 (C) only controlled the actual eviction of the tenant and did not in any way oust the jurisdiction of civil Courts from passing decrees for eviction.

In - Muhammad Unny v. M. Unniri AIR 1949 Mad 765 (D) it was laid down that the eviction of a tenant could only be in accordance with the provisions of the Rent Control Order, and that there was nothing in that clause or in any of the other clauses of the order, expression prohibiting the institution of a suit for possession, or prohibiting a civil Court, from passing a decree for possession. A contrary view had been expressed by a single Judge of that Court in - Mahmood H.Y. Vs. The Kerala Corporation Ltd., . This latter decision by the Single Judge now Stands overruled. Their Lordships who wrote the judgments in the three . Cochin cases mentioned above had also declined to follow the ruling in - Mahmood H.Y. Vs. The Kerala Corporation Ltd.,

In interpreting an analogous provision, the decision reported in - '' AIR 1949 Mad 765 '' (D) was also followed in a subsequent decision of a single Judge in - Captain S. Sunkavally Vs. Singaraju Malaparaju, In - Chandrasekharan Nair v. Rowther 1947 Tray LR 813(G), the Travancore High Court also had held that the jurisdiction of the civil Courts to pass a decree for evicting a tenant was not taken away by any of the provisions of the Rent Control Order. Thus the contention that the suit was not maintainable in the Civil Court has to be repelled. The actual eviction of the tenant arises only in execution. It will then be open to the Defendant who is sought to be dispossessed to take shelter under the provisions of the Rent Control Order and put forward this plea, because, for securing actual possession of the buildings governed by the Rent Control Order, the procedure prescribed in that order has invariably to be followed.

The Proclamation 4 of 1122 (C) had its operation only for a limited period. The Building (Lease and Rent Control) Order of 1950 is the one passed by the Travancore-Cochin Government under the Public Safety Measures Act 5 of 1950. For purposes of this appeal, it is not necessary for us to consider the steps that are to be taken by the Plaintiffs to Secure actual possession of the building. It is enough to hold that the suit as framed is maintainable and that the jurisdiction of civil Courts to pass decrees of this nature is not taken away by the provisions of the Rent Control orders in force from time to time.

It was also argued that the tenancy originally created had not been terminated by a proper and valid notice. For this it was assumed that the tenant was in possession on a monthly tenancy as contemplated by Section 103, Cochin T.P. Act, corresponding to Section 106 of the Indian Act. That section provides that leases in such a case can be terminated either by the lessor or lessee by 15 days'' notice expiring with the end of a month of the tenancy. It was contended that there was no such notice. No doubt, when the tenancy commenced it was a monthly tenancy. But subsequently it lost that characteristic. The Non-residential Rent Control Order of 1118 (C) had made a provision in Rule 9 that a tenant in possession, on the termination of the tenancy, could, by a notice, extend the period by not less than six months and not more than twelve months.

On 27-11-1944, the landlord had demanded of the tenant to vacate the house within three months from 25-11-1944. A reply Ex. O was sent the same day acknowledging receipt of the notice and stating that immediately the company got a suitable building for office the plaint building would be vacated. This was again confirmed by Anr. letter Ex. S dated 9-1-1945. Subsequently, on 19-1-1945, the Company sent Ex. I letter giving notice of their intention to get the tenancy of the house extended for a period of seven months with effect from 25-2-1945. This date was mentioned to be the last date on which the house was to be vacated as per Shri Achutha Menon''s letter of 27-11-1944.

It is now admitted that the extension claimed by the company under Rule 9 of the Rent Control Rules of 1118 was not agreed to by the landlord. He had, as provided for in that order, applied to the Rent Controller to veto the extension claimed. The Rent Controller, as well as the appellate authority, admittedly disallowed the landlord''s petition. Thus the Defendant became a tenant as per the provisions of the Statute for a definite period. The tenancy thus expired by efflux of time and such a tenancy is not governed by the provisions of Section 103, Cochin T.P. Act. Thus a second notice terminating the tenancy was unnecessary.

It was then contended on behalf of the Appellant that the company had further exercised its option to extend the period of tenancy by two letters Exs. VII and VIII. The Courts below had repelled this contention of the company for it was held that the option for extension could be exercised only once. That appears to be correct, for, if the option is allowed to be exercised recurringly, the landlord could never get possession of the property. There would also be no meaning in the maximum period of twelve months mentioned in R. 9. It is therefore clear that the tenant is entitled to exercise the option only once. Thus the tenancy had terminated by 25-9-1945. It was after the termination of such tenancy that the present suit was filed. It may be, that the promulgation of Proclamation 4 of 1122, while this suit was pending complicated matters. But the suit, in its inception was perfectly maintainable as the tenancy had terminated by efflux of time. There is therefore no substance in the contention that the tenancy had not been terminated when the suit was filed.

The next argument related to the rate of compensation allowed for use and occupation of the building. The Plaintiffs had claimed from 26-9-1945 compensation at the rate of Rs. 150/- a month. It had now been concurrently found by the Courts below on the evidence recorded in the case that Rs. 150/- claimed was only a reasonable and" fair amount. But by virtue of the provisions in Proclamation 4 of 1122, followed by subsequent enactments on the subject, the tenant or the landlord would be entitled to apply to the Rent Controller to fix the fair rent, & when once that was fixed, the landlord would not be entitled to claim anything more than that from the tenant. It was seen that the landlord had on 28-4-1122 applied to the Rent Controller to fix the fair rent. A copy of that petition was filed here, and with the consent of both sides, it was marked as Ex. XXII. The order passed thereon by the Rent Controller was also marked as Ex. XXIII. Exhibit XXIII was on 12-10-1122 corresponding to 26-5-1947. That order fixed the fair rent at Rs. 106-10-8 per month and it was to take effect from the date of the petition.

Thus the landlord would not be entitled to claim anything more than the said amount from 28-4-1122. As already found, the tenancy had terminated on 25-9-1945 corresponding to 9-2-1121. As the decrees stand, the compensation on account of use and occupation from 9-2-1121 till 28-4-1122 is allowed at Rs. 150 a month. Due to various reasons the rent of the buildings in Ernakulam had gone high and the Defendant-company itself was prepared, as could be seen from some of their letters like Ex. XVIII dated 21-3-1946, to pay Rs. 100/- a month. Since it is seen that the lair rent is only Rs. 106-10-8, it is proper to allow compensation at that rate from 26-9-1945 also. The decrees of the Courts below have to be modified to this extent.

Another objection taken in appeal related to the interest allowed. The interest was allowed at 6 per cent per annum on the arrears, as and when they fell due. The Defendants'' claim was based on the refusal of the Plaintiffs to receive the rent. Even from 26-9-1945, the Defendant offered the rent only at the rate of Rs. 50/- a month. The Plaintiffs, who claimed that the tenancy had terminated, and that on justifiable grounds, naturally declined to receive the rent thus offered. It has been held by us that the compensation has to be paid at the rate of Rs. 106-10-8 from 26-9-1945. But even after the institution of the suit, the Defendant had not deposited in Court the admitted amount. The Defendant had therefore the use of the money belonging to the Plaintiffs and as such it is only fair that the Plaintiffs are allowed interest as decreed by the Courts below. It was mentioned that some amount had been deposited by the Defendant in 1123 and 1125 and that they were drawn by the Plaintiffs. The accounts between the parties will be settled on the dates on which the deposits were made, and the balance, if any, alone will carry future interest.

The only other question for consideration relates to costs. The Plaintiffs were within their rights in instituting the suit in 1121. Nothing stood in their way of getting possession of the building as the law stood then. It was the passing of the Proclamation 4 of 1122 that gave the Defendant the status of a tenant even after the termination of the tenancy, with a right to retain possession of the building. The contention of the Defendants that the tenancy had not terminated, when the suit had been filed, and even if he could so claim for recurring renewals, was without substance. The Plaintiffs had claimed compensation for use and occupation at Rs. 150/- a month. Neither party had brought to the notice of the Courts below the order of the Rent Controller fixing the fair rent as early as in 1946. If that had been done, the Courts below would not have allowed compensation at Rs. 150/- a month. For this both parties are equally to be blamed. The Defendant had in appeal in both the Courts contended that the suit for eviction was not maintainable. That had been repelled.

The Defendant is to be blamed more for the suit and the subsequent proceedings. There was also omission on the part of the Plaintiffs in not having produced copy of Ex. XXIII earlier. It therefore appears to us that the proper order would be to allow the Plaintiffs three-fourths of their costs in all the three Courts. They will bear the remaining costs. The Defendant will bear the costs throughout.

Thus the decrees of the Courts below are modified by allowing compensation for use and occupation at the rate of Rs. 106-10-8 from 26-9-1945. In other respects, except in regard to costs, the decrees are confirmed with costs as provided for in the preceding paragraph.