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PETITIONER: GANTUSA H.  BADDI (DEAD) BY LRS.

       Vs.

RESPONDENT: MEERABAI G.  PAI & ORS.

DATE OF JUDGMENT:       24/04/2000

BENCH: S.V.Patil, R.P.Sethi, G.B.Pattanaik

JUDGMENT:

     PATTANAIK,J.

     This  appeal is directed against the revisional  Order of  a  learned  Single  Judge   of  Karnataka  High   Court, dismissing  the Revision Petition and affirming the order of eviction  passed  by  the District Judge in  his  Revisional Jurisdiction  under the provisions of Karnataka Rent Control Act.   The legal representatives of the deceased tenant  are the  appellants.   The  landlord filed  an  application  for eviction  under  Section 21(1) (a), (h) and (p) of the  Act, alleging  that  the  tenant  has not paid  or  tendered  the arrears  of  the rent legally recoverable from him and  that the  premises  are reasonably and bona fide required by  the landlord for occupation of himself as well as on the further assertion  that the tenant has acquired vacant possession of an  alternative suitable building.  The Munsif at  Yellapur, on  consideration  of the entire materials before  him  held against  the  landlord  on  all counts,  and  dismissed  the application  for eviction by his order dated 4.10.1991.  The said  order was assailed in revision under Section 50 of the Act.   The Revisional Court came to the conclusion that  the Munsiff had not properly appreciated the evidence on record. Though  he did not set aside the findings of the Munsiff, on the   question  of  arrears  of   rent  and  the  bona  fide requirement,  which  are  the   two  grounds  under  Section 21(1)(a)  and  (h)  of  the Act, but he did  set  aside  the finding  on  the  third question namely whether  tenant  has acquired  a suitable alternative premise, as required  under Section  21(1)(p)  of  the  Act and came to  hold  that  the eviction  sought for on the grounds available under  Section 21(1)(p)  of  the Act has to be allowed.  Against  the  said revisional order of the District Judge in exercise of powers under  Section  50  of the Act, the tenants moved  the  High Court.   The landlord also filed a revision petition against the  findings  of  the revisional Court on the  question  of arrears  of  rent and bona fide requirements.  The  original tenant  died  during  the  pendency  of  the  said  revision petition and his legal heirs were substituted and brought on record.   The  High  Court disposed of the revision  on  two grounds.   Following the Judgment of this Court in the  case of  Venkatesh  Thimmaiah Gurjalkar vs.  S.S.   Hawaldar,  JT 1997(8)  SC 528, the High Court came to the conclusion  that the  premises  in question being non- residential and  under the  Act  the tenancy in respect of non-residential  premise

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being  not heritable and admittedly the tenant having  died, the  revisional  application is liable to be dismissed.   On the  question whether the provisions of Section 21(1)(p)  of the  Act  is  attracted or not, the High Court came  to  the conclusion  that  in view of the evidence of the son of  the original  tenant that it was the partnership firm, which was running  the business in the schedule premises and the  said firm  has  acquired an alternative premise, it must be  held that  the  grounds for eviction under Section  21(1)(p)  has been  made out.  With these findings, the revision filed  by the  tenant  as well as the one filed by the landlord  stood dismissed.   On  grant of special leave by this Court,  this appeal  was  placed  before a Bench of two  learned  Judges, wherein  a contention was advanced that the decision of this Court in Venkatesh Thimmaiahs case, on which the High Court has  relied upon, is contrary to the decision of this  Court in  the case of Vishnu Narayan Gadskari (Dead) by L.Rs.  vs. Paralal  Baladev Uza and Ors., 1995 Supp.(4) SCC 428, and in both  the cases, the question for consideration was  whether under the Karnataka Rent Control Act, the tenancy in respect of a non-residential premises can be held to be heritable or not.   In view of the two conflicting decisions, referred to above,  the  Bench, thought it fit to refer the matter to  a larger  Bench  and  that is how the matter has  been  placed before us.

     The  learned  counsel for the appellant contends  that the  latter decision of this Court in Venkatesh  Thimmaiahs case, must be held to have been not correctly decided, as it does  not  take  notice of the earlier  decision  in  Vishnu Narayans  case 1995 Supp.(4) SCC 428, which was a  decision interpreting  the very same provision of the Karnataka  Rent Control  Act  and  which also relied upon  the  Constitution Bench  decision  of  this Court in Gian  Devi  Anands  case 1985(2) SCC 683, wherein the pari materia provision of Delhi Rent Control Act, 1958 was under consideration.  The learned counsel  further urged that acquisition of a premises by the partnership firm of which the tenant was merely a partner to the  extent  of 15%, cannot be held to be an acquisition  of alternative premises by the tenant in view of the definition of  tenant in Section 3(r) of the Act and the High  Court, therefore committed serious error of law.

     The  learned  counsel  appearing  for  the  respondent however  contended  that the impugned judgment of  the  High Court  is  unassailable,  since it has followed  the  latter decision  of this Court on the question of heritability of a non-residential  premises and it has rightly interpreted the provisions of Section 21(1)(p) of the Act.  According to the learned   counsel   for  the   respondent,   the   so-called partnership  firm  being of the father and the sons and  the said  firm  having acquired the premises where  business  is being  carried on and even in the schedule premises the firm in  fact was carrying on the business, though the father was the  tenant,  the  conclusion becomes irresistible  that  an alternative  premises  is  now   available  and   therefore, eviction could be ordered under Section 21(1)(p) of the Act.

     In  view  of  the rival submissions at  the  Bar,  two question  arise  for  our consideration:   (1)  Whether  the tenancy in respect of a non- residential purpose can be held to  be heritable under the Karnataka Rent Control Act;   and (2)  Whether  an  individual being a tenant  of  a  business premises  and  said individual having become a partner of  a firm,  if the firm acquires vacant possession of a  suitable

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building,  whether the tenant incurs the liability of  being evicted under Section 21(p) of the Act.

     So  far as the first question is concerned, it  really depends  upon an analysis of the provisions of the Act.  The expression  premises  has been defined in Section 3(n)  to mean  a  building as defined in clause (a) and any land  not used  for  agricultural purposes.  The building  has  been defined  under  Section 3(a) to mean any building or hut  or part of a building or hut other than a farm house, let or to be  let  separately  for   residential  or   non-residential purposes  and  includes  ----------------.   The  expression tenant has been defined in Section 3(r) to mean any person by  whom or on whose account rent is payable for a  premises and  includes the surviving spouse or any son or daughter or father  or  mother of a deceased tenant who had been  living with  the tenant in the premises as a member of the tenants family up to the death of the tenant and a person continuing in  possession  after the termination of the tenancy in  his favour,  but does not include a person placed in  occupation of  a  premises  by  its  tenant or a  person  to  whom  the collection  of rents or fees in a public market,  cart-stand or slaughter house or of rents for shops has been framed out or  leases  by  a local authority.  Section 51  of  the  Act provides  that  any  application made, appeal  preferred  or proceeding  taken under the Act by or against any person may in  the  event of his death be continued by or  against  his legal  representatives.  In the case of Gian Devi Anand  vs. Jeevan  Kumar  and Ors., 1985 (2) SCC 683, the  Constitution Bench  of this Court was considering the very question as to whether  the tenancy in respect of a commercial premises  or non-residential  premises can be said to be heritable  under the  Act.   Bhagwati J, concurring with the  majority  view, expressed  by  Sen  J,  came to hold  that  the  distinction between  contractual  tenancy  and   statutory  tenancy   is completely  obliterated by the rent control legislation  and if  a  contractual tenant has an estate or interest  in  the premises  which is heritable, a statutory tenant should also be  held to have such heritable estate or interest.  In  one case, the estate or interest is the result of contract while in  the other, it is the result of statute.  But the quality of the estate or interest is the same in both cases.  In the majority judgment expressed through Sen, J, it was observed: Keeping   in  view  the  main   object  of   Rent   Control Legislation,  the  position  of a tenant  whose  contractual tenancy  has  been  determined has to be understood  in  the light of the provisions of the Rent Acts.  Though provisions of  all  the Rent Control Acts are not uniform,  the  common feature  of  all  the  Rent Control Legislation  is  that  a contractual  tenant  on the termination of  the  contractual tenancy  is by virtue of the provisions of the Rent Acts not liable  to  be  evicted  as a matter  of  course  under  the ordinary  law  of the land and he is entitled to  remain  in possession  even  after  determination  of  the  contractual tenancy  and no order or decree for eviction will be  passed against  a  tenant  unless  any ground  which  entitles  the landlord  to get an order or decree for possession specified in  the  Act  is established.  In other  words,  the  common feature  of  every  Rent  Control Act  is  that  it  affords protection   to  every  tenant   against  eviction   despite termination  of tenancy except on grounds recognised by  the Act  and  no  order or decree for eviction shall  be  passed against  the tenant unless any such ground is established to the satisfaction of the court.

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     After  considering  the definitions of  tenant,  the landlord  and various other provisions of the Delhi Act as well  as  the  amendment  to   the  definition  of  tenant introduced  by the Delhi Rent Control Act Amendment Act (Act 18  of  1976), which gives personal protection and  personal right  of  continuing  in  possession to the  heirs  of  the deceased statutory tenant in respect of residential premises only  and  not  with regard to the heirs  of  the  so-called statutory  tenant  in respect of commercial premises,  the Court  observed  that  the termination  of  the  contractual tenancy  in view of the definition of tenant in the Act does not  bring about any change in the status and legal position of  the tenant, unless there are contrary provisions in  the Act.  The Court observed in paragraph 34 of the Judgment :

     A  tenant of any commercial premises has  necessarily to use the premises for business purposes.  Business carried on  by a tenant of any commercial premises may be and  often is,  his only occupation and the source of livelihood of the tenant  and  his  family.  Out of the income earned  by  the tenant  from  his business in the commercial  premises,  the tenant maintains himself and his family;  and the tenant, if he  is residing in a tenanted house, may also be paying  his rent  out  of the said income.  Even if a tenant is  evicted from  his residential premises, he may with the earnings out of  the business be in a position to arrange for some  other accommodation  for  his  residence with his  family.   When, however,  a tenant is thrown out of the commercial premises, his  business which enables him to maintain himself and  his family  comes to a standstill.  It is common knowledge  that it is much more difficult to find suitable business premises than  to  find  suitable premises for residence.  It  is  no secret  that  for securing commercial  accommodation,  large sums  of  money  by way of salami, even though  not  legally payable,  may  have  to  be paid  and  rents  of  commercial premises  are usually very high.  Besides, a business  which has  been carried on for years at a particular place has its own  goodwill  and other distinct advantages.  The death  of the  person  who happens to be the tenant of the  commercial premises  and who was running the business out of the income of which the family used to be maintained, is itself a great loss  to  the  members  of the family  to  whom  the  death, naturally,  comes as a great blow.  Usually, on the death of the  person  who runs the business and maintains his  family out  of the income of the business, the other members of the family  who suffer the bereavement have necessarily to carry on  the  business  for the maintenance and  support  of  the family.   A running business is indeed a very valuable asset and  often  a great source of comfort to the family  as  the business keeps the family going.  So long as the contractual tenancy  of a tenant who carries on the business  continues, there can be no question of the heirs of the deceased tenant not  only  inheriting  the tenancy but also  inheriting  the business  and  they are entitled to run and enjoy the  same. We   have  earlier  held  that   mere  termination  of   the contractual  tenancy does not bring about any change in  the status  of  the  tenant  and the tenant  by  virtue  of  the definition  of  the tenant in the Act and the  other  Rent Acts continues to enjoy the same status and position, unless there  be any provisions in the Rent Acts which indicate  to the  contrary.   The mere fact that in the Act no  provision has been made with regard to the heirs of tenants in respect of  commercial  tenancies on the death of the  tenant  after termination  of the tenancy, as has been done in the case of

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heirs  of  the  tenants of residential  premises,  does  not indicate that the Legislature intended that the heirs of the tenants  of  commercial  premises will cease  to  enjoy  the protection  afforded  to  the  tenant under  the  Act.   The Legislature could never have possibly intended that with the death  of a tenant of the commercial premises, the  business carried  on by the tenant, however flourishing it may be and even if the same constituted the source of livelihood of the members  of  the family, must necessarily come to an end  on the  death of the tenant, only because the tenant died after the contractual tenancy had been terminated.  It could never have  been the intention of the Legislature that the  entire family of a tenant depending upon the business carried on by the  tenant  will  be completely stranded and  the  business carried  on for years in the premises which had been let out to  the  tenant must stop functioning at the premises  which the heirs of the deceased tenant must necessarily vacate, as they  are  afforded no protection under the Act.  We are  of the  opinion that in case of commercial premises governed by the  Delhi Act, the Legislature has not though it fit in the light  of  the  situation  at Delhi to  place  any  kind  of restriction  on the ordinary law of inheritance with  regard to succession.  It may also be borne in mind that in case of commercial  premises  the heirs of the deceased  tenant  not only  succeed to the tenancy rights in the premises but they succeed to the business as a whole.

     It has been further held:

     It  may be noticed that in some Rent Acts, provisions regulating  heritability  of commercial premises, have  also been  made  whereas  in some Rent acts,  no  such  provision either  in  respect of residential tenancies  or  commercial tenancies has been made.  As in the present Act, there is no provision  regulating the rights of the heirs to inherit the tenancy  rights  of  the tenant in respect of  the  tenanted premises  which  is commercial premises, the  tenancy  right which  is heritable devolves on the heirs under the ordinary law  of  succession. The provisions of the  Karnataka  Rent Control  Act  directly  came up for consideration  before  a Bench  of this Court in the case of Vishnu Narayan  Gadskari (Dead)  by  L.Rs.  vs.  Paralal Baladev Uza and  Ors.,  1995 Supp  (4)  SCC 428, relying upon the aforesaid  Constitution Bench  decision  and  bearing  in  mind  the  definition  of tenant  in  Section 3(r) of the Karnataka Act,  the  Court held that the tenant continues to have an estate or interest in  the  tenanted  premises and the tenancy rights  both  in respect  of residential premises and commercial premises are heritable.   In the latter decision in Venkatesh Thimmaiahs case,  neither  the  decision  of  the  Constitution  Bench, referred to supra has been noticed nor the earlier two Judge Bench  decision of this Court on the provisions of Karnataka Act  has  been noticed and relying upon the decision of  the Karnataka High Court, without any analysis of the provisions of  the  Act,  the conclusion of the Forums below  that  the premises  in  question being non- residential, the right  of tenancy  therein is not heritable has been upheld.  In  view of  the  law laid down by the Constitution Bench as well  as the  earlier  decision  of  this  Court  in  Vishnu  Narayan Gadskaris  case,  we  have no hesitation to hold  that  the latter  decision in Venkatesh Thimmaiahs case, has not been correctly   decided.   In  the   absence  of  any   contrary provisions  in the Act, it must be held that the tenancy  in respect  of  a non-residential premises under the  Karnataka Rent  Control Act is heritable.  The conclusion of the  High

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Court to the contrary, therefore, cannot be sustained.

     So far as the second question is concerned, it depends upon the interpretation of Section 21(1)(p) of the Act.  The aforesaid provision is quoted hereinbelow in extenso:

     Sec.21(1)(p):   that  the  tenant whether  before  or after  the coming into operation of this part has built,  or acquired  vacant possession of, or been allotted, a suitable building.

     The language of the provision is clear and unambiguous and  given its plain grammatical meaning, it is  susceptible of only one construction that it is only when the tenant has built  or acquired vacant possession of or has been allotted a  suitable  building, then only the provisions  of  Section 21(1)(p)  of  the Act are attracted and not otherwise.   The expression  tenant  has been defined in Section  3(r)  and howsoever  vide meaning to the said definition be given,  it will not bring within its scope, a partnership firm of which the  tenant  himself may be a partner.  In the case in  hand the  individual  namely deceased Gantusa H.  Baddi  was  the tenant  in  respect  of  the premises  and  application  for eviction  had  been  filed as against  him.   The  so-called alternative  accommodation, has been acquired, admittedly by a  partnership  firm, no doubt, consisting of  the  original tenant  the  father and his sons wherein the father has  15% share  but  it cannot be held that the said  acquisition  of vacant  possession  is  by the tenant.  The High  Court  has given  a  peculiar  reasoning on consideration  of  evidence adduced  to the effect that since in the disputed  premises, the  business of the firm was carried on, though it had been tenanted  to  an individual, the moment a vacant  possession has  been  acquired  by the firm, the  liabilities  incurred under  Section  21(p) of the Act, we are unable to  pursuade ourselves to agree with the aforesaid conclusion of the High Court.   In  our  considered opinion, because  of  acquiring vacant  possession of a building by the partnership firm  of which  the  tenant  may be a partner, the  tenant  does  not become  liable  to  be  evicted by  application  of  Section 21(1)(p) of the Act.  It is neither the case of the landlord in  the  application  for eviction that  the  tenant  namely deceased  Gantusa H.  Baddi, has acquired vacant  possession of  a  building  nor  has it been proved in  course  of  the proceeding.   That being the position, the conclusion of the High  Court  that the tenant has incurred the  liability  of having evicted under Section 21(1)(p) of the Act, the moment a  business premises is acquired by the partnership firm  is erroneous and cannot be sustained.

     In  view  of  our  aforesaid conclusion  on  both  the questions,  this  appeal  succeeds.  The order  of  eviction passed  by  the Revisional Authority and reaffirmed  by  the High  Court  stands quashed.  The application  for  eviction stands  dismissed.   There  will however be no order  as  to costs.