M/s Sudharma Metropolis Health Services Private Limited vs R.Mani Kumar

Sophy Thomas, J.

The tenant is the revision petitioner challenging the concurrent orders of eviction under Sections 11(4)(iii) and 11(4)(v) of the Kerala Buildings (Lease and Rent Control) Act, 1965 (hereinafter referred to as 'the Act').

The landlord filed RCP No.18 of 2015 before the Rent Control Court, Alappuzha, for evicting the tenant under Sections 11(3), 11 (4)(iii) and 11(4)(v) of the Act. The Rent Control Court, though found the bonafide need of the landlord, for the petition schedule building for starting a scan centre, it was also found that the landlord was in possession of other rooms in the very same building conducive for staring a scan centre, and no special reasons were shown for getting possession of the petition schedule room after evicting the tenant. So, giving the benefit of the first proviso to Section 11(3) of the Act, the Rent Control Court rejected the prayer of the landlord for eviction under Section 11(3). Regarding the prayer under Sections 11(4)(iii) and 11(4)(v) of the Act, the Rent Control Court found that the tenant acquired a suitable building reasonably sufficient for their requirement, very near to the petition schedule building and moreover, the tenant ceased to occupy the building for more than six months without any reasonable cause. So, the eviction prayed for under Sections 11(4)(iii) and 11(4)(v) was allowed by the Rent control Court.

The tenant, aggrieved by the order of eviction under Sections 11(4)(iii) and 11(4)(v) of the Act, preferred RCA No.25 of 2017 before the Rent Control Appellate Authority, Alappuzha. The landlord, aggrieved by the dismissal of his prayer for eviction under Section 11(3) of the Act, preferred a cross objection in that appeal. The Rent Control Appellate Authority, on analysing the facts and evidence and also on hearing the rival contentions raised from either side, dismissed the appeal of the tenant as well as the cross objection of the landlord, upholding the order of eviction under Sections 11(4)(iii) and 11(4)(v) of the Act. Against the dismissal of the appeal, the tenant has come up with this revision.

The landlord is not challenging the dismissal of the cross objection, and hence the order of the Rent Control Court denying eviction under Section 11(3) of the Act, has become final.

In this revision, we are called upon to find out, whether there is any illegality, irregularity or impropriety in the judgment of the Rent Control Appellate Authority in RCA No.25 of 2017, upholding the order of eviction under Sections 11(4)(iii) and 11(4)(v) of the Act.

Heard Smt.Sreekala Krishnadas, learned counsel appearing for the revision petitioner/tenant, and Sri.R.Azad Babu, learned counsel appearing for the respondent/landlord.

Before the Rent Control Court, the parties went on trial by examining PWs 1 to 4, DWs 1 and 2 and marking Exts.B1 to B16 and Ext.C1.

The tenant, a Private Limited Company, took the petition schedule building on lease for a period of five years, as per lease agreement dated 01.04.2010. Even after the period of tenancy, the tenant continued there as a statutory tenant. The tenant was conducting a Diagnostic Centre in the schedule building in the name and style “Sankers Lab Metropolis”. They invested huge amounts to start their business in the tenanted premises. There was a business agreement between the landlord and the tenant for transferring the business of the landlord, a pathological lab named Dr.Shanker’s Lab at Alleppey to the tenant including the machineries, goodwill etc. of that business. As per the agreement, the landlord agreed that, he will not use the name Dr.Sanker’s Lab any more as it was assigned to the tenant as per the agreement. In violation of the business agreement, the landlord started a laboratory named 'Sanker’s Health Care Diagnostic' which is similar to the business run by the tenant in the name and style 'Sanker’s Metropolis'. So, the tenant filed two suits against the landlord as O.S No.1 of 2013 and O.S No.1 of 2014 before the District Court, Alappuzha, invoking the provisions of Trademarks and Copyrights Act and both the cases are pending trial. Because of that vengeance, the landlord initiated eviction proceedings against the tenant, without any bonafides.

According to the tenant, the need projected by the landlord was not bonafide and it was only a ruse to evict them. Moreover, the case of the landlord that the tenant had acquired other buildings reasonably sufficient for their requirement is not correct. They never ceased to occupy the tenanted premises. So, the order of eviction passed by the Rent Control Court under Sections 11(4)(iii) and 11(4)(v), which was confirmed in appeal by the Rent Control Appellate Authority, is liable to be set aside.

As far as the eviction ordered under Section 11(4)(iii) of the Act, the tenant is admitting the fact that just 50 meters away from the petition schedule rooms and opposite to the Excise Office, Alappuzha, they had acquired another building. But, according to them, the acquisition of new building was for expansion of their business, as they are having more branches for their business, and it was not intended for shifting their existing business in the petition schedule rooms. So, according to the tenant, acquisition of another convenient building in the same locality could not be a ground for evicting them under Section 11(4)(iii), as it was meant for starting a new branch of their business, and not for shifting their existing business in the petition schedule rooms. If such an argument is accepted, the landlord will be deprived of his valuable right of eviction envisaged under Section 11(4)(iii) of the Act, as any subsequent acquisition of building by the tenant can be said to be for starting a new branch for expanding his existing business. In the case on hand, there is clear evidence to show that, the tenant acquired a building just 50 meters away from the petition schedule rooms having more plinth area than the petition schedule rooms. DW2, an employee of the tenant, categorically deposed before the Rent Control Court, that the new building taken on lease by the tenant is more spacious than the petition schedule rooms. PW2, the owner of that building, also deposed that, the area leased out to the tenant is 1980 sq.feet, and it was leased out in the year 2012. He further stated that, the laboratory which was functioning in the petition schedule rooms was shifted by the tenant to the new building owned by PW2.

The evidence given by PW4-the Commissioner, coupled with Ext.C1 commission report, is sufficient to show that, the lab which was functioning in the petition schedule rooms was shifted to the new building, and a flex board was exhibited in the petition schedule rooms informing the public, regarding the shifting of the lab to the newly acquired building, which was just 50 meters away from the petition schedule rooms. DW2-the staff of the tenant, also corroborated that fact. The tenant also categorically admitted acquisition of the building owned by PW2 on lease, in the year 2012. But, according to them, it was for expansion of their business by opening a new branch. If that be so, there was no necessity to exhibit a flex board in the petition schedule building indicating shifting of business from the petition schedule building to the newly acquired building. The tenant is not disowning the flex board exhibited by them in the petition schedule building. The testimony of the witnesses coupled with Ext.C1 commission report, amply prove that the tenant acquired the building owned by PW2 on lease in the year 2012, and the business in the petition schedule rooms was shifted to the new building, which was reasonably sufficient for their requirement. So, the trial court as well as the appellate court rightly found that the tenant acquired another building in the same locality, just 50 meters away from the petition schedule rooms, reasonably sufficient for their requirement so as to order eviction under Section 11(4)(iii) of the Act.

Regarding cessation of occupation, the tenant contended that, they never ceased to occupy the petition schedule rooms, and still they are using those rooms as a store for their business. They are relying on clause 6 of Ext.B16 lease agreement which says that, the lessee agrees to use the place for the purpose of keeping dry materials/reagents with necessary permit and licence from the authorities wherever required and not for any manufacturing activities. So, according to the tenant, the shifting of the lab from the petition schedule rooms will not mean that they ceased to occupy the rooms, as still they are using the petition schedule rooms for the storage of dry materials/reagents.

The tenant has no case that they never conducted 'Sankers Lab Metropolis' in the schedule building and they were simply using that premises for storage only. But, there is clear evidence to show that, the tenant was conducting Sanker’s Lab Metropolis in the schedule building, and after acquiring the building owned by PW2, they shifted the lab into that building. When the Commissioner inspected the petition schedule rooms, he could not see any symptoms of uses of that building, either as a lab, or as a storage place of dry materials/reagents for the purpose of conducting the lab. The Commissioner has clearly reported in Ext.C1 that, the building was seen in an unused condition, and it was full of dust, trash, unused tables, old microscopes and X-ray machines etc. with a wet floor and a leaking roof. Most of the electric bulbs were not seen functioning. If dry materials/reagents to be used in laboratory was kept in the petition schedule rooms, it would have been kept neat and tidy. But, the Commissioner could not find out any such storage in the petition schedule rooms. Moreover, if the lab was not functioning there, there was no possibility for keeping dry materials/reagents necessary for the lab, in that building. Clause 6 of Ext.B16 lease agreement shows that, the dry materials and reagents should have been kept with necessary permit. The tenant could not produce the permit necessary for keeping materials and reagents in the petition schedule rooms, after 2012. So, the evidence given by PW4 coupled with Ext.C1 commission report was sufficient to hold that, the tenant ceased to occupy the petition schedule rooms since long, and that is why the building was seen in an unused condition with full of dust and trash with a wet floor and leaking roof. Though the period of cessation of occupation could not be definitely answered by the Commissioner, there is testimony of PW2 that the tenant acquired his building on lease in the year 2012.

The landlord filed the RCP on 09.04.2015. The Commissioner inspected the petition schedule building on 10.04.2015. On going through the facts reported by the Commissioner regarding the appearance of the petition schedule rooms, in all probability, the tenant might have shifted the lab from the petition schedule rooms to the newly acquired building immediately after its acquisition on lease in the year 2012. The case of the tenant that the newly acquired building was for expanding their business by starting a new branch, is not tenable in the light of the admission from the part of PW2 and DW2 that, the lab which was functioning in the petition schedule rooms was shifted to the newly acquired building and a flex board was also exhibited in the petition schedule rooms, announcing shifting of the lab to the new building which was just 50 meters away. So, the trial court as well as the appellate court rightly found that, the tenant ceased to occupy the petition schedule rooms and so, they were liable to be evicted under Section 11(4)(v) of the Act.

Learned counsel for the tenant argued that, there was business competition between the tenant and the landlord, and when the landlord, in violation of the business agreement, started a Laboratory by name ‘Sanker’s Health Care Diagnostic’ similar to the name of their business concern ‘Sanker’s Metropolis’, they filed OS No.1 of 2013 and O.S No.1 of 2014 before the District court, Alappuzha, under the Trademarks and Copyrights Act and those cases are pending trial. According to them, the trial court as well as the appellate court failed to notice the business competition between the landlord and the tenant, and the pendency of trademark and copyrights cases between them, and ordered eviction without application of mind.

The dispute with respect to trademarks and copyrights has nothing to do with the landlord-tenant relationship between them and it may take its own course till its logical conclusion. Here the question is, whether pendency of those cases prompted the landlord to file RCP against the tenant without any bonafides. The bonafide need projected by the landlord to get vacant possession of the building for starting a scan centre was answered in his favour by the trial court as well as the appellate court. That finding was never challenged by the tenant. Since the landlord was found in possession of other suitable rooms in the very same building, and no special reasons were shown by him, for getting possession of the petition schedule rooms itself for starting the scan centre, giving the benefit of the first proviso to Section 11(3), the eviction sought for on the ground of bonafide need was declined by the Rent Control Court. That does not mean that the need projected by the landlord was not bonafide.

Learned counsel Smt.Sreekala Krishnadas, appearing for the tenant further argued that, for granting eviction under Section 11(4), the Rent Control Court shall satisfy that the claim of the landlord was bonafide. According to her, the relief sought under Section 11(3) was declined, as there was no bonafides in claiming vacant possession of the petition schedule rooms, suppressing his possession of other vacant rooms in the very same building and it will have a say on the bonafides to be satisfied under Section 11(10) of the Act.

As we have seen, the bonafide need of the landlord for starting a scan centre in the petition schedule rooms was answered in his favour. But, by giving protection of the first proviso to Section 11(3), eviction was not allowed on that ground. The tenant is admitting that they acquired another building on lease from PW2 in the year 2012, and shifted the lab which was functioning in the petition schedule rooms to that building. The landlord filed the eviction petition in the year 2015, after shifting of the lab from the petition schedule rooms. Moreover, Ext.C1 commission report and the testimony of PW4 were sufficient to show that, the petition schedule rooms were not being used for long, from the symptoms he could see there. So, we could not say that there was no bonafides from the part of the landlord while making a claim for eviction under Sections 11(4)(iii) and 11(4)(v) of the Act.

The argument put forward by the learned counsel for the tenant that, declining the prayer for eviction on the ground of bonafide need will eclipse the bonafides of the claim under Section 11(4), envisaged under Section 11(10) of the Act, is not a legally sustainable one. When there is clear and cogent materials to show that, the tenant acquired another building and shifted the business which they were conducting in the petition schedule rooms into the newly acquired building, and ceased to occupy the petition schedule premises thereafter, we cannot say that, the claim of the landlord was not bonafide, even if there were pending litigations between them on trademarks and copyright. If the landlord starts a scan unit in the petition schedule rooms, the tenant cannot prevent him saying that, they would be put to a disadvantageous situation due to the business competition. The argument that the landlord may start a business of similar nature to that of the tenant in the petition schedule rooms, may not be a ground to find that the claim of eviction was not bonafide. The tenant cannot dictate terms on the landlord and it is the landlord who has to decide how he has to make use of his building.

On going through the entire facts and materials, we find no illegality, irregularity or impropriety in the judgment of the Rent Control Appellate Authority, upholding the order of eviction under Sections 11(4)(iii) and 11(4)(v) of the Act. So, the revision is liable to be dismissed.

Considering the facts and circumstances of the case, we deem it appropriate to grant six months time to the tenant to surrender vacant possession of the premises, on condition that the tenant shall file an affidavit before the Rent Control Court within 15 days from the date of receipt of copy of this order, unconditionally undertaking to vacate the tenanted premises within six months, and agreeing to pay the arrears of rent, if any, within one month and to continue payment of the monthly rent before the due date, till they vacate the premises.

With these directions, the Rent Control Revision stands dismissed.

The pending interlocutory applications, if any, shall stand closed.