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PETITIONER: MANEKLAL AND SONS

       Vs.

RESPONDENT: TRUSTEES OF PORT OF BOMBAY & ORS.

DATE OF JUDGMENT14/10/1987

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) OZA, G.L. (J)

CITATION:  1988 AIR  832            1988 SCR  (1) 483  1987 SCC  (4) 733        JT 1987 (4)   199  1987 SCALE  (2)916  CITATOR INFO :  RF         1988 SC1313  (12)

ACT:      Bombay Rent,  Hotel and  Lodging Houses Rates (Control) Act, 1947:  Section 4(1)(a)  and 4(4)(a)-Land  belonging  to local authority  taken on lease-Lessee constructing building and letting  out the  same-Sub  lessee-Whether  entitled  to protection.

HEADNOTE:      In  1945  the  first  respondent-Trustees  of  Port  of Bombay, granted  lease of plot owned by them for the purpose of erecting  a godown  for carrying on commercial activities at a  monthly rent  of Rs. 925. In 1946 the lessee erected a permanent godown.  In 1958,  he granted  lease of  the  said godown to the petitioners. The first respondent filed a suit against the heirs of the original lessee for eviction on the ground of  termination of  tenancy, and  obtained a  decree. When warrant  of possession  was sought  to be executed, the petitioners obstructed the execution of the decree.      The first  respondent  thereupon  took  out  a  Chamber Summons for  removal of  obstruction under order 21 Rule 97- 101 C.P.C.  The petitioners  contended  that  as  they  were lessees under  the original  lessee they  were  entitled  to protection of  the Bombay  Rent, Hotel  and  Lodging  Houses Rates (Control)  Act, 1947-the Bombay Rent Act-which applied to  the   building  erected  by  a  lessee  from  the  local authority.  The   trial  court   rejected  the  petitioners’ objection and allowed the Chamber Summons.      The appeal  of the  petitioners was  dismissed  by  the Single Judge  of the  High Court  holding that they were not entitled  to  the  benefit  of  the  Bombay  Rent  Act.  The contentions arising  out of  the Easement  Act  and  alleged acquiescence of  the first  respondent were  negatived.  The Letters Patent  Appeal was  also dismissed  by the  Division Bench.      On the  question whether  the petitioners were entitled to protection under section 4(1)(a) of the Bombay Rent Act. 484      dismissing the Special Leave Petition, ^

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    HELD: Where  a building  was erected  by the lessee not pursuant to  or not under any agreement with the lessor then the case  did not  fall under  section 4(1)(a) of the Bombay Rent, Hotel  and Lodging  Houses Rates  (Control) Act, 1947. [486G]      Section 4(1)  gives immunity  to the local authority in respect of  the land  which it has let out to the lessee and that immunity cannot be taken away merely because the lessor on his  own volition  and without  being in obligation under any agreement  choses to  put up  structures on  that  land. Therefore, if  the premises  belonged to the Government or a local authority  then the  Act would not apply. [486H; 487A, D]      In the  instant case,  The lands  belong to  the  local authority but  the structures  were put on by the lessees of the first  respondent not under any building lease, and such protection cannot  be claimed  in respect of these premises. In view  of the  fact that  the original  lease was  only  a monthly tenancy and not a building lease, the High Court was right  in   dismissing  the  objections  on  behalf  of  the petitioners. Since  the petitioners  have been in possession of the  premises for  some time, the petitioners are allowed to continue  to remain  in the premises upto 15th September, 1988. [489F, H]      Kanji Manji  v. The  Trustees of  the Port  of  Bombay, [1962] Suppl. 3 S.C.R. 461 applied.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Special  Leave  Petition (Civil) No.9887 of1987.      From the  Judgment and  order dated  20.8. 1987  of the Bombay High Court in L.P.A. No. 77 of 1987.      K.K. Venugopal,  A.K. Sen, M.K. Nesari, P.H. Parekh and R.K. Dhillon for the petitioners.      F.S. Nariman,  U.J.Maskeja, B.S.  Basaniaum, J.  Peres, A.K. Verma and D.N. MiShra for the Respondents.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI,  J. This  petition is for leave to appeal against  the judgment and order of the Division Bench of the 485 Bombay High  Court dismissing Letters Patent Appeal from the order of the learned Single Judge. The 1st respondents being the trustees  for the  Port of Bombay are the owners of plot of land  bearing Plot No. 62 admeasuring 576 sq. yards Lying and situate  in Pooria Street, Elphinstone Estate, Bombay-3. In or  about 1945 the trustees of the Port of Bombay granted lease of the said plot of land to one Mustafa Husein for the purpose of  erecting a  godown for  carrying  on  commercial activities at  a monthly  rent of Rs. 925 which later on was increased to Rs.1,465. In or about 1946 Mustafa Husein being the lessee  of the 1st Respondent erected a permanent godown of brick, mortar and cement. The said Mustafa Husein in 1958 granted lease  of the  said godown  to the  petitioners; the area of the godown is about 3,000 sq. ft. It is alleged that petitioners have  since been  carrying on  their business in the said  godown The  Trustees of  the Port  of Bombay filed suit against  the heirs  of Mustafa Husein for eviction from the lease  granted to  Mustafa Husein for termination of the tenancy. The ground for eviction was termination of tenancy. The Trustees  of the Port of Bombay in July, 1977 obtained a decree on  admission against  the heirs of Mustafa Husein in the said  suit. In  or about May, 1985 warrant of possession

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in execution  of decree  dated 20th of July, 1977 was sought to be  executed against  the  petitioners.  The  petitioners obstructed the  execution of  the decree.  Thereupon  in  or about June,  1985, the  Trustees of  the Port of Bombay took out a  Chamber Summons  in the  High  Court  of  Bombay  for removal of obstruction under order 21 Rules 97 to 101 of the Code of  Civil Procedure.  Petitioners contended  that  they were lessees  under the said Mustafa Husein and as such they were entitled  to the  protection of  the Bombay Rent, Hotel and Lodging  Houses Rates  (Control) Act,  1947, hereinafter called the  Bombay Rent  Act, as the Bombay Rent Act applied to the building erected by a lessee from the local authority and  as   such  the  petitioners  right  of  possession  was protected under  the provisions  of the Bombay Rent Act. The Trial Court  allowed the  Chamber Summons  and rejected  the petitioner’s  contentions.  He  observed  that  it  was  not necessary to  record evidence  in this case. The petitioners being aggrieved preferred a first appeal. The learned single judge of  the High  Court dismissed the first appeal holding that the petitioners were not entitled to the benefit of the Bombay Rent Act and negatived the contentions arising out of the Easement  Act  and  also  arising  out  of  the  alleged acquiescence of  the Trustees  of the  Port of  Bombay.  The petitioners preferred  Letters Patent  Appeal which was also dismissed by  the Division  Bench of  the Bombay High Court. The High  Court observed  that if  the  contentions  of  the petitioners were  accepted then  the provisions  of  Section 4(1)(a) of  the Bombay Rent Act would become nugatory. Being aggrieved 486 therefrom the petitioners seek leave to appeal to this Court under A Article 136 of the Constitution.      The question,  is, whether the petitioners are entitled to protection  under section 4(1)(a) of the Bombay Rent Act. The answer  will depend  upon the question whether there was any building  lease granted  to the  original tenant Mustafa Husein. There  was none,  at  least  no  such  evidence  was adduced  before  the  learned  Trial  Judge  or  before  the Division Bench  of the  High Court.  When  the  matter  came before this  Court for  admission by our order dated 17th of September, 1987  as the  question involved was whether there was any  agreement or  lease with  the lessor that they will have to  construct building on the land demised to them, but as no  such lease had been produced so far, time was granted for production of such evidence.      Pursuant to  the same  today we  have  been  shown  two letters, one  dated 16th  of  April,  1951  written  by  the Architect of  the lessor forwarding the plants in triplicate to the  Bombay Port Trust for approval, and the other letter dated 14th  of June,  1951 written  by the Manager, Land and Bunders to  the architect  of the  lessor on  the  following subject:                "Elphinstone State  Reconstruction of  a Shed                on Monthly Tenancy Plot at Poona Street." The petitioners  were informed  that the  plan was  approved subject to the compliance of the Municipal Regulations.      This question  arose in  the Bombay  High Court  in Ram Bhagwandas v.  Municipal Corporation  of the City of Bombay, A.I.R. 1956  Bombay 364.  There interpreting the Bombay Rent Act and  section 4(1)  and 4(a) thereof Chief Justice Chagla speaking  for  the  Division  Bench  held  that  the  proper interpretation to  put upon  section 4(4)(a) was that "under an agreement,  lease or  grant" must  qualify both "building erected" and  "land held". In other words, the building must be erected by the lessee pursuant to the agreement, lease or

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grant given  to the  person who  held the  land  under  that agreement, lease  or grant.  Therefore, where a building was erected by the lessee not pursuant to any agreement with the lessor or  not under  any agreement with the lessor then the case did not fall under section 4( l)(a).      What section 4(1) does is to give immunity to the local authority in respect of the land which it has let out to the lessee and that immu 487 nity cannot  be taken  away merely because the lessee on his own volition  and without  being under  any obligation under any agreement choses to put up structures on that land.      Section 4  deals with  exemptions and  sub-section  (1) provides as follows:           "This  Act   shall  not   apply  to  any  premises           belonging to  the Government  or a local authority           or apply  as against the Government to any tenancy           or other like relationship created by a grant from           the Government  in respect  of premises  taken  on           lease or  requisitioned by  the Government: but it           shall apply  in respect  of premises  let  to  the           Government or a local authority".      Therefore,  if   we  have   premises  which  belong  to Government or  a local  authority, then  the Act  would  not apply. The  land here belongs to the local authority but the structures were  put on by the lessees of the Port not under any building  lease, and  such protection can not be claimed in respect  of these premises. Sub-section (4)(a) of section 4 is  also relevant.  It was  held "The expression ’premises belonging to  the Government  or local  authority’  in  sub- section (1) shall, notwithstanding anything contained in the said sub-section  or in  any judgment  decree or  order of a Court not include a building erected on any land held by any person from  the Government  or a  local authority  under an agreement, lease  or other  grant, although having regard to the  provisions  of  such  agreement,  lease  or  grant  the building so  erected may belong or continue to belong to the Government or the local authority, as the case may be".      Chief  Justice   Chagla   considered   the   historical background under  which Section  4(a)  was  enacted  by  the Bombay Act of 1953. This decision was approved by this Court in Kanji  Manji v. The Trustees of the Port of Bombay [1962] Suppl. 3  S.C.R. 461.  Sub-section (4)(a)  and (b)  read  as follows:           "(4)(a). The expression "premises belonging to the           Government or  a local  authority" in  sub-section           (1) shall,  notwithstanding anything  contained in           the said sub-section or in any judgment, decree or           order of  a Court,  not include a building erected           on any land held by any person from the Government           or a  local authority under an agreement, lease or           other  grant,   although  having   regard  to  the           provisions of 488      such agreement,  lease or grant the building so erected      may belong  or continue  to belong to the Government or      the local authority, as the case may be; and           (b) notwithstanding  anything contained in section      15, such  person shall  be entitled to create a tenancy      in respect of such building or a part thereof."      This Court observed at page 471 of the report that this was introduced by amendment and the purpose of the amendment was as follows:           "The amendment  achieved two  different things. It           enabled the  lessee  of  the  particular  kind  of

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         building  described   in  cl.(a)  to  create  sub-           tenancies  in   spite  of  the  ban  against  sub-           tenancies contained  in s.  15. It  also  excluded           from  the   operation  of   sub-section  (1)   the           buildings specified in cl. (a) of the sub-section.           The amendment  said nothing about the relationship           of the  Government or  the local authority, on the           one hand, and the lessee, on the other, in respect           of the  land. The  word "premises"  in sub-section           (1) could  mean the land or the buildings or both.           Sub-section (4)(a)  dealt only with the buildings,           and did  not deal  with the  land, because it used           the word "buildings" and not the more general word           "premises". The  import of  sub-s. (4)(a)  of s. 4           was thus  limited to buildings, and did not extent           to land.  The sub-section,  however,  was  drafted           somewhat in artistically, and the obscurity of the           language presents some difficulty. The Trial Judge           followed a  decision  of  the  Bombay  High  Court           reported in  Ram Bhagwandas  v. Bombay Corporation           A.I.R.  1956   Bombay  364.   In  that  case,  one           Khudabaksh Irani  had taken lease of certain plots           some  30   years  back,   and   constructed   some           structures upon the open plot, and rented them out           as tenements.  In 1947,  Irani sold  them  to  one           Tyaballi. In 1951, the Municipal Corporation filed           a suit  to eject Tyaballi from the plots, and by a           consent decree,  Tyaballi  agreed  to  deliver  up           vacant and  peaceful possession of the plots clear           of all  structures. Tyaballi  failed to remove the           structures, and  the Municipal  Corporation sought           to execute the decree. The tenants thereupon filed           a suit  under 0.21,  r. 103 of the Civil Procedure           Code against Municipal Corporation, but the h suit           was dismissed.  In the  appeal which  was filed in           the 489      High  Court,   it  was   conceded  that  the  Municipal      Corporation was  the owners  of the  plots in question,      but protection  was claimed  on  the  basis  of  sub-s.      (4)(a) of s. 4 of the Rent Control Act. Chagla, C.J. in      dealing with  the history  of the amending Act, pointed      out that the legislature was seeking to protect by that      sub-section tenants  who occupied  buildings  put  upon      land belonging  to a  local authority, if the buildings      occupied by  them were  constructed under  an agreement      under which  the lessee  was  under  an  obligation  to      construct buildings. He pointed out that the protection      of sub-s.  (4)(a) was to buildings and not to land, and      that the  phrase "under  an agreement,  lease or  other      grant" modified  not only  "held  by  any  person  from      Government or local authority" but also "erected on any      land". He.  therefore, held  that the words "erected on      any land  held by  any person  form a  local authority"      were descriptive  of the building and did not emphasise      the point  of time  when the  building was  erected. By      that phrase,  what was  emphasised was "that the nature      of the  building must  be such  as to  satisfy the test      that it  was erected  on land  held by  a person from a      local authority  and the  test must  be applied  at the      time when the protection is sought."      In that case, it was contended before this Court, as it was contended  in the  Bombay High  Court, that so long as a building was erected under an agreement with Government or a local authority,  the benefit of sub-s. (4)(a) of s. 4 would

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be available,  no matter  how many  hands the property might have changed.  This Court accepted the interpretation of the High Court in the aforesaid decision.      In our  opinion, in  the instant  case, in  view of the fact that  the original lease was only a monthly tenancy and not a building lease, the High Court was right in dismissing the objections  on behalf  of the  petitioners. We  find  no reason, therefore,  to interfere  with the order of the High Court. The  special leave  petition therefore,  fails and is accordingly dismissed without any order as to costs.      Since, the  petitioners have  been in possession of the premises for  some time,  in the  interest of  justice it is desirable, in  our opinion, that the petitioners should have time to vacate the premises in question. In the premises, we allow the  petitioners to continue to remain in the premises upto 15th  of September,  1988 provided  they file the usual undertaking in this Court within four weeks. N.P.V.                                   Petition dismissed. 490