G. Krishna Rao vs Lalit Kumar Mehta

Y.N. Narayana, J.—This revision is directed against the reversing judgment of the Rent Control Appellate Authority-cum-Additional Chief Judge, City Civil Court, Hyderabad, in R.C.A. No. 121 of 1994. The landlord is the revision petitioner. He filed R.C. No 94/1991 before the Additional Rent Controller, Secunderabad, seeking eviction of the tenant u/s 12 (1) (b) and Section 12 (2) of the A.P. Buildings (Lease, Rent & Eviction) Control Act, 1960 (for short, ''A.P. Act 15 of 1960'') on the ground of bona fide requirement for the purpose of reconstructing a new building in the petition schedule premises, i.e., shed bearing No. 8577/B, Distillery Road, Secunderabad, with a plinth area of 3500 square feet. Originally, the father of the landlord let out the petition schedule premises and two office rooms to the tenant for the purpose of carrying on business in the name and style of ''Hari Side Lace Works''. The tenant is using the shed for manufacturing purposes by erecting machinery in the said shed and the two rooms as office rooms. The premises, which was constructed in the year 1940, subsequently fell to the share of the revision petitioner-landlord and since then the respondent-tenant has been paying rents to the petitioner. While so, in the year 1980, with a view to have a pucca building on the petition schedule premises, the petitioner entertained an idea of reconstructing a new building in place of the existing shed after demolishing the same. He, therefore, issued a notice to the tenant to hand over vacant possession of the building to him. He had, however, assured the tenant that he would redeliver possession of the petition schedule premises with newly constructed building. The tenant did not give any reply to the said notice. Subsequently, the landlord filed the petition for eviction u/s 12 (1) (b) and Section 12 (2) of the A.P. Act, on the ground of bona fide requirement of the petition schedule premises for the purpose of carrying reconstructions on the same.

The tenant put forth his defence contending that the petition schedule premises is not in a dilapidating condition and therefore it need not require any reconstruction and that the idea of reconstructing a new building in place of the existing shed was entertained only with an oblique motive to dislodge the tenant unceremoniously from the petition schedule premises. It was, therefore, pleaded that the landlord''s requirement is not a bona fide and genuine one. It is further contended that the area available for use after reconstruction will also get reduced into 1271 square feet from the existing plinth area of 3500 square feet in view of the proposal to construct 4 shop rooms in the existing space, which would be very much insufficient for the tenant to erect his machinery. Therefore, it is submitted that the premises after reconstruction will virtually become unsuitable for the tenant and the tenant in such a case has to search for another accommodation and that in this city of Hyderabad it would be an uphill task for him to secure alternate accommodation and that by the time he could secure alternate accommodation, he would certainly suffer great hardship and irreparable loss personally and also to his company''s goodwill. It was submitted that all these efforts by the landlord were done only with a view to evict the tenant from the petition schedule premises and, therefore, the requirement of the landlord cannot be said to be a genuine requirement.

On the above pleadings, evidence was let in before the trial Court. The learned Rent Controller held that the landlord bonafide requires the petition Schedule premises for reconstruction and thus passed an order of eviction and further directed the landlord to put the tenant into possession of the premises after reconstruction. Aggrieved by the said order of eviction, the tenant filed appeal before the learned Rent Control Appellate Authority, who, under the impugned order, reversed the findings of the learned Rent Controller by solely placing reliance upon a decision of the Supreme Court reported in P.ORR and Sons (P) Ltd. Vs. Associated Publishers (Madras) Limited[OVERRULED], in which Section 14(2) of the Tamil Nadu Buildings (Lease, Rent & Eviction) Control Act, 1960 (for short, ''T.N. Act'') fell for consideration. Hence, the revision by the landlord.

It is contended by the learned Counsel for the petitioner that the lower appellate authority has grossly erred in reversing the well considered order of eviction passed by the learned Rent Controller by wrongly placing reliance upon the decision of the Supreme Court in P. On & Sons case. It is further contended that the lower appellate Court had failed to notice the difference between A.P. Act and the T.N. Act. u/s 14(2) of the T.N. Act, once the eviction is ordered for demolition, the landlord is not under an obligation to furnish an undertaking to offer the premises to the tenant after construction of the new premises/whereas under the A.P. Act, eviction is ordered only for the purpose of demolition and reconstruction and the landlord is bound to furnish an undertaking that he would, after the reconstruction of the premises, deliver back the premises to the tenant. It is, therefore, contended that the order under revision is vitiated.

On a perusal of the judgment under revision, I have no hesitation to observe that the Court below had grossly failed to notice the distinction between Section 12 of the A.P. Act No. 15 of 1960 and Section 14(1)(b) of the T.N. Act and thus placed wrong reliance upon a decision of the Supreme Court which has no bearing to the facts of the case on hand. I am of the view that there is a shaping difference between Section 12 of A.P. Act and Section 14 of T.N. Act and in view of the difference in the very structure of the provisions, the tests for determining the requirement of the landlord under those two provisions will also vary. I shall now proceed to deal with the ingredients of both the provisions and the tests that are applicable for establishing the requirement under the respective provisions. For the sake of convenience, Section 12 of A.P. Act and Section 14 of T.N. Act are extracted hereunder in a tabular form:

A.P. Act 15 of 1960 Tamil Nadu Buildings (Lease. Rent & Eviction) Control Act. 1960

Section 12 Recovery of possession by Section 14 Recovery of possession by Landlord for Repairs, alterations or Landlord for repairs or for additions or for reconstruction:- reconstruction:- 1. Notwithstanding anything in 1. Notwithstanding anything this Act on an application made by a contained in this Act, but subject to the landlord, the Controller, if he is provisions of Sections 12 and 13 on an satisfied: application made by a landlord the Controller shall, if he is satisfied. (a) that the building is reasonably (a) that the building is bona fide and bona fide required by the required by the landlord for landlord for carrying out carrying out repairs which repairs, alterations or additions cannot be carried out without which cannot be carried out the building being vacated, or without the building vacated, or (b) that the building consists of not (b) that the building is bona fide more than two floors and is required by the landlord for the reasonably and bona fide immediate purpose of required by the landlord for the demolishing it and such immediate purpose of demolition is to be made for the demolishing it and such purpose of erecting a new demolition is to be made for the building on the site of the purpose of erecting a new building sought to be building on the site of the demolished pass an order building sought to be directing the tenant to deliver demolished, pass an order possession of the building to the directing the tenant to deliver landlord before a specified possession of the building to the date. landlord before a specified date. 2. No order for recovery of 2. No order directing the tenant to possession under this section shall be deliver possession of the building passed unless the landlord gives an under this section shall be passed - undertaking that the building on (a) on the ground specified in completion of the repair, alterations or Clause (a) of Sub-section (1) additions or the new building on its unless the landlord gives an completion will be offered to the undertaking that the building tenant, who delivered possession in shall on completion of the pursuance of an order under sub- repairs, be offered to the tenant section (l),for his occupation before who delivered possession in the expiry of such period as may be pursuance of an order under specified by the Controller in this Sub-section (1)for his re- behalf, occupation before the expiry of three months from the date of recovery, of possession by the landlord or before the expiry of such further period as the Controller may for reasons to be recorded in writing allow; or 3. In case the tenant, to whom the (b) on the ground specified in building or the new building, as the Clause (b) of Sub-section(l) case may be, is offered under Sub- unless the landlord gives an section (2) by the landlord does not undertaking that any material want to occupy it the landlord shall portion of the building shall be give notice of vacancy in writing to the him not later than one month authorised officer under Sub-section (1) and shall be completed before of Section 3. the expiry of three months from the date he recovers possession of the entire building or before the expiry of such further period as the Controller may for reasons to be recorded in writing allow" Clause (a) of Sub-section (1) of Section 12 of the A.P. Act stipulatess that the Controller may, if satisfied that the building in question which is in occupation of the tenant is bona fide required by the landlord for carrying out repairs, alterations or additions, order eviction of the building. As per Clause (b) of Sub-section (1) of Section 12, if the Controller is satisfied that the building which consists of not more than two floors is required by the landlord for the immediate purpose of demolishing it and such demolition is for the purpose of erecting a new building at the site of the old building, he can order eviction. Sub-section (2) of Section 12 further stipulates that no order for recovery of possession under this section shall be passed in favour of the landlord unless he gives an undertaking that the building on completion of the repair alteration or additions or the new building on its completion will be redelivered to the tenant for his occupation before the expiry of a certain period which would be specified by the Controller. Sub-section (3) of Section 12 is not relevant for our purpose. In the case on hand, the building in question which is in occupation of the tenant is sought to be taken by the landlord for the purpose of reconstructing a new building after demolishing the existing building. Thus, the provisions, that are relevant for our present purpose are Sections 12 (1) (b) and 12 (2) of the A.P. Act

I shall now proceed to deal with Section 14(2) of the T.N. Act, which, according to the learned Rent Control Appellate Authority, is identical in all respects to Section 12 of the A.P. Act. Clause (a) of Sub-section (1) of Section 14(2) of the T.N. Act entitles the Controller to order eviction of the tenant if he is satisfied that the landlord bona fide requires the building for carrying out repairs. He can also pass an order of eviction under Clause (b) of Sub-section (1) of Section 14(2), if he is satisfied that the landlord bona fide requires the building for the immediate purpose of demolishing it and such demolition is to be made for the purpose of erecting a new building on the said site. As per Clause (a) of Sub-section (2) of Section 14(2), the Controller shall not pass any order on the ground specified in Clause (a) of Sub-section (1) (viz., the requirement of the premises for carrying out repairs) unless the landlord gives an undertaking to the effect that he would redeliver possession of the building in question to the tenant after effecting such repairs before the expiry of the period of 3 months or before the expiry of the period which the Controller may specify. On a comparison of Clause (b) of Sub-section (1) of Section 12 & Sub-section (2) of Section 12 of the A.P. Act and Clause (b) of Sub-section (1) of Section 14(2) of the T.N. Act, one can notice a clear distinction between the two provisions. Under Sections 12 (1) (b) and 12 (2) of the A.P. Act, the landlord who claims possession of premises in occupation of the tenant on the ground of either repairs or alterations or additions or reconstruction must give an undertaking to the effect that he would redeliver possession to the tenant after such repairs/alterations/additions/reconstruction, as the case may be,are over; whereas a landlord who claims possession of the premises in occupation of the tenant on the ground of carrying out new constructions u/s 14(1)(b) of the T.N. Act, is not obliged to give any such undertaking for redelivery of possession to the tenant after such new construction. Thus, to say in one word, under the T.N. Act, there exists a provision for redelivery of the building, u/s 14(2)(a), only in case the landlord claims possession on the ground of repairs but there is no such stipulation in the said Act for redelivery of the building in case the landlord claims possession of the building occupied by tenant on the ground of reconstruction u/s 14(2). Thus, under the T.N. Act, only such of those landlords who seek possession on the ground of repairs are duty bound to deliver back possession to the tenant and in all other cases, they need not redeliver possession to the tenants. When coming to Section 12 (2) of the A.P.Act, it is different. As already noticed, the landlord seeking possession of the building either on the ground of repairs or alterations or reconstructions, must invariably redeliver possession to the tenant after the completion of the work for which eviction was ordered. Thus, the element of redelivery after reconstruction is to be seen in the A.P. Act, whereas the same is missing in T.N. Act. In view of the above difference in the two provisions, the tenant who is evicted u/s 14(2) of the T.N. Act on the ground of reconstruction, will suffer permanent dislocation and there is no question of reinduction of the tenant into the premises after the work of reconstruction is over whereas the tenant who is evicted u/s 12 (1) (b) and section 12(2) of the A.P. Act, will suffer only temporary dislocation and hardship during the period of reconstruction and after the reconstruction is over, the landlord is bound to put the tenant in possession of the newly constructed building. Thus, it must be held that there is striking difference between the two provisions. Further, in view of the difference in the two provisions, the standard of tests for determining the requirement of the landlords under these two provisions must also vary. Since the hardship that may be caused to the tenant, who is evicted u/s 12 (1) (b) and Section 12 (2) of the A.P. Act on the ground of reconstruction, is only temporary, it is sufficient if the Court considers the aspect whether the landlord bonafide intends to carry out the reconstruction or not. The question whether he filed the petition with any oblique motive or not, need not be so seriously gone into in view of the temporary dispossession of the tenant under this Act. But, when it comes to the T.N. Act, the standard of test is absolute since dispossession of the tenant, in case of an order of eviction u/s 14(1)(b) of the Act, is permanent. The above discussion will clearly establish that there is striking difference between the provisions of Section 12 (1) (b) & Section 12 (2) of the A.P. Act and Section 14(1)(a) of the T.N. Act. Therefore, I am of the view that the learned appellate authority went wrong in placing reliance upon the decision of the Supreme Court in which Section 14(1)(b) of T.N Act fell for consideration. Consequently, it must be held that the entire approach of the learned appellate authority in dealing with the case is wrong.

Further, the learned appellate authority also went wrong in reversing the finding of the learned Rent Controller holding that the landlord''s requirement is not genuine and bonafide. There is ample evidence on record which establishes beyond doubt that the landlord had a genuine intention to construct a building in place of the petition schedule building after demolishing it and for that purpose, he had already obtained sanction from the Municipality and also got approved the plan for construction. Further, since it has come on record that the landlord is owner of as many as 24 shop rooms in the locality, it cannot be said that he may not be having the required financial capacity to construct just 4 rooms in the premises in question. All these factors clinchingly prove that the landlord genuinely entertained an idea of constructing a pucca building in the petition schedule premises. The objection of the tenant to the said proposed reconstruction is that in case of his eviction, he has to incur heavy expenditure for removing the existing lace machinery which is fixed to the ground in a length of 60 feet; that the plinth area that would be available after reconstruction also gets reduced to 1271 square feet from the existing 3500 square feet and that in such a case he may not be in a position to re-erect the machinery that is going to be removed in the limited space of 1271 square feet. It is, therefore, contended that the position after the reconstruction would become virtually impossible for him to re-enter into the petition schedule premises. No doubt, the Rent Control Act is enacted only with a view to safeguard the rights and interests of the tenants from the hands of unscrupulous landlords, but at the same time one should not forget the fact that the landlord also has a right to improve his property. Therefore, it cannot be said that the idea of constructing a pucca house by the landlord is an unreasonable idea and is entertained only with a view to harass the tenant. No doubt, the eviction of the tenant would temporarily cause hardship to the tenant, but such temporary hardship must not outweigh the permanent advantage/benefit which the landlord would be getting in future by virtue of such reconstruction. In this case, the premises in question was constructed in the year 1940 i.e., nearly 57 years ago and there is an ordinary shed in it without any R.C.C. roofing, which would naturally fetch meagre rents. In fact, it has come on record that the tenant is at present paying a paltry sum of Rs. 54/- per month towards rent for the vast extent of 3500 square feet of land situated in a well developed locality of Secunderabad. Under those circumstances, the landlord intended to undertake construction with R.C.C. roofing by demolishing the old shed. It cannot be said that such an intention is with any evil motives. All these circumstances would clinchingly prove that the landlord genuinely and bona fide requires the petition schedule premises for reconstruction.

There is no merit in the contention of the learned Counsel for the tenant that the premises must be in a dilapidating condition so as to seek eviction on the ground of reconstruction, in view of the Judgment of a Division Bench of this Court in New Peking Chinese Hotel v. Hindustan Builders, 1989 (3) ALT 138 wherein it was held thus:

&"Under Section 12 what is to be established is bona fide requirement of the landlord and not whether the building needs demolition. What is a bona fide requirement is a question of fact which has to be determined in the circumstances of each case. In considering the bona fide requirement the totality of the circumstances must be taken into account viz., the genuineness of his claim, the landlord being possessed of sufficient means to undertake the project, the existing condition of the building, its age and situation and possibility or otherwise of being put to profitable use after reconstruction and a host of other factors. Even if the building does not require immediate demolition on account of its condition and age, still if the landlord wishes to demolish it and make a reconstruction which would be more profitable and if that claim is genuine and there is no ulterior motive of evicting the tenant like for getting more rent etc., the relief cannot be refused."

The other contention of the learned Counsel for the tenant that the plinth area available after the proposed reconstruction would be very much insufficient for him to re-erect his machinery, is to be mentioned only for its rejection in view of his own admission in the cross-examination which is to the following effect: "It is possible to run the workshop if the machinery is installed in four rooms with separate motors and shaft." For all these reasons, I am of the view that the findings of the lower appellate authority must be held to be perverse and they are liable to be set aside.

In the result, the C.R.P. is allowed and the order under revision is set aside. The landlord''s petition for eviction is consequently allowed. Six months'' time for eviction is granted to the tenant to vacate the premises. The landlord is directed to construct four rooms having roof of more than seven feet height within six months and re-deliver possession of the reconstructed building to the tenant within six months from the date of delivery of possession by tenant to landlord. There shall be no order as to costs.