Mariammal and Others vs Mymoon Bibi and Others

K. Govindarajan, J.—The tenants who suffered decree of eviction filed the above appeal.

The respondents/plaintiffs filed a suit in O.S.No.435/1977 against one Periannan for recovery of possession of ''A'' and ''B'' schedule properties

and for future mesne profits, etc. According to the plaintiffs, the suit theatre ""Prabhat Talkies"" was leased out to the defendant under the lease deed

dated 28.10.1964 for running cinema. Pursuant to the said lease deed, the defendant took possession of the theatre with the building, machinery,

fixtures, etc., and also the goodwill as a going concern. According to the plaintiffs, it is a composite lease.

The defendant contested the suit contending inter alia that the lease is not composite lease but it relates only to the building and so the Civil

Court has no jurisdiction to entertain the suit and Section 30 of the Tamil Nadu Buildings (Lease & Rent Control) Act, 1960, hereinafter called

''the Act'' has no application to the suit properties.

The trial Court found that the lease in question is a composite lease and it will come under exemption contemplated u/s 30 of the Act and so the

provisions of the Act has no application to the properties in question and hence the Civil Court has jurisdiction to deal with the suit. On the basis of

the above said findings and also considering the other oral and documentary evidence, the trial Court decreed the suit and granted two months time

to hand"" over possession of the suit properties. Aggrieved against the same, the legal representatives of the defendant filed an appeal in

A.S.No.39/1983 and the learned Judge in the judgment dated 1.8.2001 dismissed the appeal, concurring with the findings given by the trial Court.

Hence the above appeal.

Learned Senior Counsel appearing for the appellants submitted that the plaintiffs admittedly have not leased the properties along with the cinema

projector and other concerned equipments and in view of Second Illustration of Section 30 of the Act, unless the lease is of the land and building

together with fixtures, fittings, cinematograph talkie equipments, machinery and other articles, the exemption granted u/s 30 of the Act has no

application. According to him, in the present case, no cinematograph talkie equipments were handed over to the defendant and so the plaintiffs

cannot rely on Section 30 of the Act so as to enable them to approach the Civil Court for eviction.

Learned counsel for the respondents submitted that the illustration has to be read with the main provision and merely because one of the items

mentioned in the illustration was not handed over to the lessee, it cannot be said that the plaintiffs are not entitled to claim exemption u/s 30 of the

Act.

The point for determination in this appeal is:

Whether the suit filed by the plaintiffs on the ground that the lease in question is a composite lease and is exempted u/s 30 of the Act, is sustainable

in law ?

We are not framing any other points for determination since no other argument was advanced.

Ex.A6, dated 28.10.1964, the lease deed was executed by the parties in respect of ""Prabhat Talkies"" which is an immovable property. Under

Ex.A4, another lease deed was executed in respect of moveable properties on the same day, Subsequently, the same was renewed by way of two

identical documents for a further period of two years. Ultimately under Ex.A3, dated 9.9.1970, the lease deed was executed between the parties.

Similarly, lease deed was executed even with respect to movable properties. Under Ex.A3 it is specifically stated that the lease was with reference

to ""Prabhat Talkies"". From Clause 8 of the lease deed Ex.A3 it is clear that the said theatre was leased out only for the purpose of running the

cinema. Another document on the same day has been executed with respect to the movables, such as fixtures, electrical fittings, amplifiers, screen

and all other fittings required for cinema theatre except cinematograph projector. From Ex.B1 we are able to see that the defendant had purchased

projectors from the previous lessee Anantha Arunachalam Chettiar. So, as rightly found by the learned Judge, on perusal of the above said two

lease deeds, it is clear that the lease of the cinema theatre was given along with fixtures, fittings and equipments other than projector and the lease

was given ""as is or where is"" condition. The learned Judge also appreciated the recitals in clauses 8 and 9 of Ex.A6 in support of his finding that the

lease of the theatre was with the fittings, fixtures and furniture, etc. It is beneficial to extract the said Clauses, which read as follows:

The lessees hereby agrees and acknowledges that he has inspected the building, premises, ""PRABHAT TALKIES"" described in Schedule

hereunder and that he has satisfied himself that the building and all its doors, windows, fittings and fixtures are in sound repair and good condition.

The lessee hereby agrees to pay the electricity charges and water charges and all other rates, taxes, levies, licence fees, appertaining to the

business conducted in the premises himself without delay or default and it is expressly understood that except the property tax payable for the

Prabhat Talkies land and building, the lessor shall not be liable to pay any other levy or tax or charges.

It is agreed between the parties that the lessee shall have the right to sublet the property in whole or in part and at his risk and responsibility but

such right of subletting shall not in any way impair or affect the obligations of the lessee as herein defined and set out and such subtenants or

persons introduced by the lessee shall not have larger rights than the lessee himself and will be bound by all the covenants and conditions and

lessees obligations as defined and set out herein and liable to be removed by the lessor at their option as trespassers and illegal obstructors, on any

case the cinema licence should be in the name of the lessee N. Perianna.

The above said clauses under Ex.A6 clearly establish that ""Prabhat talkies"" was leased out not only with the fittings and fixtures but also for the

purpose of running the cinema.

On the basis of the above said facts, now we have to deal with the scope of Section 2(2)(b) of the Act. Section 2(2) of the Act deals with the

definition ""building"" which reads as follows:

Definitions:- in this Act, unless the context otherwise requires--

(1)..........

(2) ""building"" means any building or hut or part of a building or hut, let or to be let separately for residential or non-residential purposes and

includes -

(a) the garden, grounds and out-houses, if any, appurtenant to such building, hut or part of such building or hut and let or to be let along with such

building or hut.

(b) any furniture supplied by the landlord for use in such building or hut or part of a building or hut, but does not include a room in a hotel or

boarding house"".

Learned Senior Counsel appearing for the appellants relied on Section 2(2)(b) of the Act in support of his submission that even if the lease is

along with furniture it will go along with building and so it cannot be said as the lease is a composite lease merely furniture is also included in the

lease deed and so the provisions of the Act will apply to such lease. There cannot be any quarrel as suggested by the learned Senior Counsel with

respect to scope of Section 2(2) of the Act. But in this case the lease is not only the building but also fittings, equipments and screen, etc.

The only question now to be decided is the scope of Section 30 of the Act on the basis of the Illustration (2), as the learned Senior Counsel

appearing for the appellants had very much relied on the said provision in support of his submission that the exemption contemplated u/s 30 of the

Act has no application to the present case. As stated already, according to the learned Senior Counsel, if any one of the items mentioned in the

Illustration (2) to Section 30 of the Act was not given, the said provision cannot be enforced. But such a submission had already been rejected by

the learned single Judge in the decision in Bombay Burmah Trading Corporation Ltd. v. A. T. Narayanaswami Pillai, 1981 (94) L.W. 334. In the

said case also the argument similar to the argument of the learned Senior Counsel herein was made to the effect that unless the lease included the

full complement of cinematograph talkie equipment and other apparatus, the exemption would not apply. The learned Judge while rejecting the said

submission, held as follows:

I do not agree with the way of understanding the exemption provision. In my judgment Illustration (2) to Section 30(iii) cannot be read and

understood in isolation or as an operative provision in itself. Nor can it be read in a literal way. Illustration (2), no doubt, mentions a cinematograph

talkie equipment, among other items. But the mention of the equipment is only by way of illustration. It cannot be suggested that a fully equipped

cinema theatre, but equipped for showing only ''silent'' films, cannot come within the statutory exemption, for the one and only reason that lacks a

''talkie'' equipment mentioned in Illustration (2). In my judgment, this illustration does not call for an inventory of the equipment of cinema theatre to

find out if the inventory answers and tallies fully and in every respect with the items mentioned in the Illustration.

The learned Judge also construed the scope of Section 30(iii) of the Act and held as follows:

The idea behind this provision is simple. Leases of buildings, as a general rule, are covered by the Act. The Act applies even to leases of non-

residential buildings, as business premises. But the Legislature wished to make a distinction between lease of a building without more, and lease of

an Industrial or business complex in which building is only one of the items which figures. The later is not so much a lease of a building, as lease of a

commercial asset. The exemption is granted therefore to a lease which comprises not only a building, but includes certain fixtures, machinery,

furniture or other articles belonging to the landlord and which arc situated in the building, and which would aid the tenant in carrying on the

particular business or industry for the carrying on of which the tenancy has been entered into. The scope of this exemption is often described by the

phrase ''composite lease''. The phrase is only a shorthand expression to denote the requirements of Section 30(iii). Where the lease is a composite

lease in the sense that it is a composite of building as well as business assets, it is not necessary that the business part of the lease must be complete

in every respect leaving nothing to be desired and nothing to be supplemented by the tenant himself. Section 30(iii) does not say that the lease must

be of a business or industrial undertaking as a going concern. Nor does it require that the composite lease must be such that the business or

industry leased along with the building must be in a ready running condition as at the date of the lease, even if it is not actually a going concern. A

lease of a building cum industrial or business equipment, in ''as is or where is'' condition might still qualify for exemption, even though the equipment

will need something more to operate. In my judgment, the question in every case would be one of substance, and not one of literally applying either

of the provisions of Clause (iii) or of Illustration 2 appeared to that Section. This means that in the task of deciding whether the exemption applies

to any given case, the tribunals and Courts should avoid extreme positions one way or the other, and they must avoid the mistake of treating a

building lease as a composite lease merely because of the presence of certain trivial items of business equipment in the building. At the same time,

Courts should also avoid the mistake of refusing the exemption on the ground that the lease did not include some minor piece of machinery or

furniture or equipment, which may be regarded as a part of the equipment for the intended line of trade. As I observed earlier, the matter has to be

looked into as one of substance having regard to the facts and circumstances of each case, as established by the evidence on record.

In the present case, the landlords themselves admit that the lease was of a cinema theatre as such, together with the cinema equipments which

they had fitted the building with up to the date of the lease. The tenant might have had to supplement the existing fittings and cinema equipment

leased out to him, in order to make the theatre fully equipped for exhibition of films. But, that does not detract from the lease being a composite

lease as contemplated by Section 30(iii). I am, therefore, in entire agreement with the conclusion of the Appellate Authority that the lease in the

present case does not brook an application for fixation of fair rent, or any other proceeding for the matter under the Rent Control Act. The result

is, that this revision petition is dismissed. In the peculiar circumstances of the case, I do not make any order as to costs.

The above said decision of the learned single Judge had been approved by the Division Bench in the decision in Jaisingh, K.V. v.

Govindaswami Chetiar, C.R., and 8 others, 1995 (1) L.W. 154 . The said decision of the Division Bench was also confirmed by the Apex Court

in the decision in K.V. Jai Singh Vs. C.R. Govindaswamy Chettiar (died) and others, . In view of the above, it is clear that the submission made by

the learned Senior Counsel appearing for the appellants cannot be accepted.

Learned Senior Counsel appearing for the appellants sought to rely on the observation made in the judgment of the Apex Court in K.V. Jai

Singh Vs. C.R. Govindaswamy Chettiar (died) and others, that the defendant C. V. Rajagopal Chetty admitted that the three projectors and their

accessories kept in the cabin room belong to the plaintiffs Rukmani Bai and others; But the learned Senior Counsel failed to read the previous

sentence. The said factual statements were made on the basis of the inventory taken by the Commissioner on 22.10.1962 from which it can be

seen that all items required for running a cinema theatre were given to the lessee for effective running of the theatre, which includes furniture

provided, loudspeaker, double speaker, etc., and all other electrical items except projectors and their accessories. The same facts are available in

this case also. From the above it is clear that even if projectors and other accessories were not given to the lessee, as held by the Apex Court, it

cannot be said that the lease comes under the purview of the Act.

Though the learned Senior Counsel appearing for the appellants relied on the decision in Kumaravelu v. Kanakarathinam Chetty, :

[1996]1SCR42 , in support of his submission that merely because furniture and fittings have also been leased out along with the cinema theatre, it

cannot be said that it is a composite lease as the domain intention was not to let out fitting, furniture and equipments but it is only building and in the

absence of projectors, which are the major part of the equipments required for exhibition of theatre, it cannot be said that it is running cinema

business or fully equipped running cinema theatre. The above said judgment in : [1996]1SCR42 was delivered on 23.4.1994, but the judgment in

K.V. Jai Singh Vs. C.R. Govindaswamy Chettiar (died) and others, was delivered on 9.8.1996 by interpreting the same principles which involved

in the present case. In the earlier case, the apex Court had considered the scope of the provisions under the Karnataka Rent Control Act. The said

interpretation was given by the Apex Court on the basis of the expression ""premises"" and ''building'' as defined in Section 3(a) and ""premises"" as

defined in 3(n) of the Karnataka Rent Control Act. However, in view of the decision of the Apex Court in K.V. Jai Singh Vs. C.R.

Govindaswamy Chettiar (died) and others, , construing the provisions of the Tamil Nadu Buildings (Lease & Rent Control) Act, 1960, the learned

Senior Counsel cannot get any support from the above said decision in K.V. Jai Singh Vs. C.R. Govindaswamy Chettiar (died) and others, . In

view of the above, it cannot be construed that the lease given to the defendant is a building alone but it is a composite lease and so as held in the

above said decisions, the said lease falls outside the purview of the provisions of the Act. Merely because the cinema projector was not given to

the lessee and other equipments were given so as to run the cinema, the case of the plaintiffs that the lease in question is exempted as contemplated

u/s 30 of the Act cannot be rejected.

From the above, it is clear that the lease in question is a composite lease and both the Courts have found that the lease was given with an

object to run the cinema. Hence Section 30 of the Act will apply to the facts of the present case and in view of the exemption granted under the

provisions, the other provisions of the Act have no application and the suit for recovery of possession is sustainable in law.

For the above reasons we do not find any reason to interfere with the judgment of the learned Judge dated 1.8.2001, confirming the judgment

of the learned trial Judge dated 8.12.1982. Accordingly, the above appeal is dismissed. No costs. C.M.P.No.13736/2001 is also dismissed.