Union of India vs Narain Singh and others

Jaswant Singh, C.J.—This Civil first appeal is directed against the judgment dated November 30, 1972, of the learned Addl. District Judge,

Jammu, decreeing the respondents' suit for ejectment of the appellant from the respondents' house called 'Tigers Den' situate near the Dogra Hall,

Jammu.

It appears that the Union of India, appellant herein, through its Divisional Engineer, Telegraphs, Jammu, got on lease the aforesaid house of the

respondents on April 10, 1967, at a monthly rental of Rs. 950/- which was to enure upto December 31, 1970. The rental value of the property

having shot up during the currency of the lease, the respondents called upon the appellant to have the rent re-assessed. Failing to get a favourable

response, the respondents served a notice u/s 80 of the Civil P.C. on the appellant intimating to it that the tenancy would stand terminated by efflux

of time on December 31, 1970 and its possession beyond that date would be treated as unauthorised and it would be liable to pay Rs. 2460/- per

month for the use and occupation of the premises beyond December 31, 1970, as per schedule of the CPWD rates. After the expiry of the

aforesaid period of lease on the failure of the appellant to vacate the house, the respondents instituted a suit for ejectment of the appellant from the

aforesaid house on April 29, 1971.

The suit was contested by the appellant averring, inter aha, that the lease deed gave it an option to extend the tenancy for a period of one year

beyond December 31, 1970, and that it had given due notice for extension of the tenancy to the respondents, as was clear from letter No.

ASP/39/70 dated March 28, 1970, addressed by Maj. Gen, A.S. Pathania, father of the respondents to the Divisional Engineer, Jammu. The

appellant also averred that the Jammu and Kashmir Houses and Shops Rent Control Act, 1966 (hereinafter referred to as the 'Act') applied to the

tenancy and it was fully protected from ejectment under the provisions of the Act. It was also contended by the appellant that the notice u/s 80

given by the respondents was not valid.

On the pleadings of the parties, the following issues were framed:-

Whether the tenancy between the parties stood extended upto 31-12-1971? OPD

Whether the Houses and Shops Rent Control Act is not applicable to the premises in dispute? OPP

Whether the notice u/s 80 CPC is not according to law? OPD

Relief. OPP

After a regular trial, the learned Addl. District Judge, Jammu on a consideration of the material on the record, came to the conclusion that the

appellant had not been able to discharge the burden of proof of issue No. 1, that the Act did not apply to the case and that it had been conceded

by the appellant that the notice under S. 80 of the Civil P.C. given by the respondents was valid. On these findings the learned Addl. District Judge

decreed the respondents' suit, vide his judgment dated November 30, 1972. It is against this judgment that the present appeal is directed.

Appearing in support of the appeal, Mr. V.S. Malhotra has canvassed two points. He has firstly contended that it is amply proved from the

aforesaid letter of Maj. Gen. A.S. Pathania that the notice as required by the lease deed in question was given to the appellant and it had exercised

its option for extension of the tenancy for one year. He has next contended that the provisions of the Act apply to the tenancy and that the

appellant was fully protected thereunder from eviction.

We have given our careful consideration to both these contentions of the learned counsel for the appellant but find ourselves unable to accede to

the same. It is true that the lease deed contained a covenant which gave an option of renewing the lease of the premises to the appellant for a

further term of one year, but the same was subject to the condition that the appellant would give notice of its intention of renewing the lease to the

lessor at least six months before the expiry of the stipulated period. It would be advantageous in this connection to reproduce the relevant portion

of the lease deed which runs as under:-

And farther that the lessee shall have the option of renewing the lease of the said premises for a further term of....on giving notice of such intention

to the lessor at least six months before the expiration of the lease hereby granted and the lessor shall forthwith execute and deliver to the lessee a

renewed and duly registered lease of the said premises for such further term of years at (sic) and under the same conditions as are herein contained

excepting only this condition as to renewal. Provided that the notice for the renewal of the lease as aforesaid shall be deemed sufficient if signed by

the Post Master General-the Director of Posts and Telegraphs-the Divisional Engineer Telegraphs-the Sub Divisional Officer of Telegraphs-the

Superintendent of Post Offices-the Postmaster or Sub-Post Master-the Officer-in-Charge of the Telegraph Office.

A careful perusal of the lease deed would show that for the exercise of the option of renewing the lease for a period of one year, it was necessary

for the appellant to serve a notice in writing on the respondents signed by the Post Master General, or the Director of Posts and Telegraphs, or the

Divisional Engineer Telegraphs, or the Sub-Divisional Officer Telegraphs, or the Superintendent of Post Offices or the Post Master or the Sub-

Post Master or the Officer-in-charge of the Telegraphs Office. In the instant case no such notice was given, Mr. Nagarajan, the only witness

produced on behalf of the appellant, has admitted in cross-examination that for the renewal of the tenancy it was necessary for any of the aforesaid

functionaries of the appellant to have served the respondents with a notice, and that no such notice was given by the department. The letter

addressed by Maj. Gen. Pathania, alluded to above, does not show that any notice as contemplated by the aforesaid covenant was given by the

appellant to the respondents. It is now well-settled that when the covenant of renewal is subject to the conditions precedent the right of renewal

only arises when notice is given to the lessor in terms of the renewal clause and the lessee has performed all the conditions precedent as mentioned

in the renewal clause, Reference in this connection may usefully be made to a Division Bench decision of the Patna High Court in (1959) ILR 38

Pat 1160 at p. 1187. As the notice contemplated by the aforesaid convenant for renewed was not given by the appellant to the respondents, the

tenancy stood terminated on December 31, 1970. The first contention of Mr. Malhotra is therefore overruled.

For a proper decision of the second contention it is necessary to refer to the relevant portion of Section 1(3) of the Act which is to the following

effect:

Notwithstanding anything contained in Sub-section (2), nothing in this Act shall apply to-

(i) any house or premises belonging to, taken on lease or requisitioned by the Government.

(ii) any house or shop which has been constructed on or after last day of the year 1965.

(iii) any tenancy in respect of any house or shop wherein the income of the tenant, whether accruing within or outside the State exceeds Rs.

20.000/- per annum.

We have now to see whether the appellant is protected under cls. (i) or (iii) of Section 1(3) of the Act. It is not disputed that the expression 'the

Government' occurring in cl. (i) (Supra) is not defined in the General Clauses Act. It is well-known that in a federal set up like ours, the

governmental functions are shared by the State Government and the Central Government. So far as the affairs of the Union are concerned, they are

administered by the Union of India and in relation to those affairs the expression 'the Government' occurring in the aforesaid cl. (i) of Section 1(3)

cannot but mean the Central Government. The appellant is not therefore entitled to the protection of clause (i).

It remains now to be seen as to whether the Union of India can invoke cl. (iii) of Section 1(3) of the Act. It is well-settled that the net income as

contemplated by the aforesaid cl. (iii) of Section 1(3) of the Act means the income that remains with a tenant after compulsory deduction, say, for

instance, by way of tax, or the income which remains after deducting from the total receipts the capital invested and the expenses incurred to

secure the total receipts, depending on whether the tenant belongs to a fixed income group as in the former case or to a business community as in

the latter case. No material has been placed before us to show that the net income of the Union of India does not exceed Rs. 20,000/-. In this

view of the matter, the appellant cannot take advantage of cl. (iii) of Section 1(3) of the Act. We are fortified in this view by an unreported decision

of a Division Bench of this Court in Civil first appeal No. 3 of 1973 entitled Rawel Singh v. Union of India, decided on May 2, 1974.

In the result the appeal fails and is hereby dismissed, but without any order as to costs.

Mufti, J.

I agree.