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PETITIONER: P. ORR AND SONS (P) LTD.

       Vs.

RESPONDENT: ASSOCIATED PUBLISHERS (MADRAS) LIMITED

DATE OF JUDGMENT09/11/1990

BENCH: THOMMEN, T.K. (J) BENCH: THOMMEN, T.K. (J) SAIKIA, K.N. (J) KASLIWAL, N.M. (J)

CITATION:  1990 SCR  Supl. (2) 615  1991 SCC  (1) 301  JT 1990 (4)   374        1990 SCALE  (2)960

ACT:     Rent  Control and Eviction--Tamil Nadu Buildings  (Lease and  Rent Control) Act, 1960: Sections 10 and 14(1)(b)  bona fide requirement and bona fide personal requirement  demoli- tion   and   reconstruction   of   building--Condition    of building--Prime    factor--Deterioration    to     crumbling state--Whether  necessary--Absence  of need for  urgency  by reason of sound condition of building--Whether negative bona fide character of the requirement for demolition.     Judicial  Review: Findings of competent  authority--When open  to Court’s interference--Appreciation of evidence  and findings  of  facts--Authority empowered  by  statute--Final judge of facts--Court not to sit judgment thereon.     Words & Phrases: ’Immediate’--’Immediate  Purpose’-Mean- ing of.

HEADNOTE:     The respondent-landlord filed a petition before the Rent Controller  for eviction of the appellant-tenant under  sec- tion  14(1)(b) of the Tamil Nadu Buildings (Lease  and  Rent Control)  Act, 1960 on the ground that the condition of  the building  compelled immediate demolition and that the  land- lord  wanted to put the property to the best  possible  use. The  appellant-tenant denied the allegations  and  contended that the building was structurally safe, and that the  stand taken by the respondent-landlord in the earlier  proceedings under the Act falsified its claim. On the basis of  evidence on  record, the Rent Controller found that the building  was structurally  safe  and  sound. However, he  held  that  the condition of the building as such was not decisive in decid- ing  the question of bona fide requirement of  the  landlord under section 14(1)(b) of the Act. Accordingly, he passed an order  of  eviction.  The tenant preferred  an  appeal.  The appellate  authority concurred with the Rent Controller  and confirmed the order of eviction.     Aggrieved,  the tenant approached the High  Court.  Con- firming the findings of the authorities, the High Court held that though the 616 building  was  structurally sound, it was  required  by  the landlord  for a legitimate scheme of demolition  and  recon-

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struction  with  a  view to putting the  property,  to  more profitable and better use.     Against the High Court’s order, the tenant has preferred the  present appeal, by special leave, contending  that  the respondent-landlord  has  sought eviction of  the  appellant solely in terms of section 14(1)(b) of the Act, which relate to the condition of the building compelling immediate  demo- lition  and since the condition of the building was  not  as such, the eviction could not have been ordered.     On  behalf of the respondent-landlord it  was  contended that  section  14(1)(b)  of the Act referred  to  bona  fide requirement  of the landlord for demolition and  reconstruc- tion. It was also contended that due to various factors,  if it  became uneconomical to allow the old building to  stand, notwithstanding  its  sound and safe condition, and  a  much larger profit could be derived from the larger reconstructed building, a prudent landlord would be perfectly justified in seeking eviction of the tenant under section 14(1)(b) of the Act. Allowing the appeal, this Court,     HELD:  1.1 Section 14(1)(b) of the Tamil Nadu  Buildings (Lease and Rent Control) Act, 1960 is satisfied only if  the building  is  bona  fide required by the  landlord  for  the "immediate", i.e., direct, sole and timely purpose of demol- ishing it with a view to erecting a new building on the site of the existing building. Various circumstances such as  the capacity of the landlord, the size of existing building, the demand for additional space, the condition of the place, the economic  advantage and other factors justifying  investment of  capital on reconstruction may be taken into  account  by the  concerned authority in considering an  application  for recovery;  but  the essential and  overriding  consideration which,  in the general interests of the public and  for  the protection  of the tenants from unreasonable  eviction,  the legislature  has in mind the condition of the building  that demands timely demolition by reason of the extent of  damage to its structure, making it uneconomical or unsafe to under- take repairs. While the condition of the building by  itself may  not  necessarily establish the  bona  fide  requirement under  clause  (b), that condition is not only  one  of  the various’  circumstances which may be taken into  account  by the  Rent Controller but it is the essential condition.  The Act  does  not accept the requirement by the landlord  as  a bona  fide requirement within the meaning of  the  provision unless the condition of the building, in the context of  the relevant circumstances, 617 requires  demolition.  These  are matters which  are  to  be proved by evidence. [635H; 636A-D]     1.2 In order to satisfy the test under section  14(1)(b) the condition of the building need not have deteriorated  to the  extent  of the building being in  danger  of  crumbling down,  but the condition mast be such as to indicate a  bona fide requirement for the timely, genuine and direct  purpose of  demolition and reconstruction. The personal  requirement of the landlord or any member of his family for residence or business  is not germane to section 14, and to  import  that concept  for the construction of that section, as  the  High Court  appears to have done, is to project section  10  into section 14, and that is an exercise which has no warrant  in the law. [636E-F]     Metalware  &  Co.  etc. v. Bansilal Sarma  &  Co.  etc., [1979] 3 SCC 398; Neta Ram v. Jiwan Lal, [1962] Suppl. 2 SCR 623 relied on.     Mehsin Bhai v. Hale & Company G.T., Madras, [1964] 2 MLJ

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147;  K. Ramachandra Rao v. Krishnaswami lyengar  and  Ors., [1976] 1 MLJ 267; K.P. Lonaopan and Sons v.S. Mohamed lqbal, [1981] 1 MLJ 386 approved.     R.P. David and Anr. v. N. Denial and Ors., [1967] 1  MLJ 110;  V.P. Selvaraj v. V. Narasimhe Rao, [1969] 1  MLJ  587; Bharat Trading Company v. K. Shanmughasundaram, [1982] 1 MLJ 94;  Manakayal’  Ammal  & Ors. v. V.S.  Sundaram  and  Ors., [1984] 1 MLJ 310; A.S. Sheikh Fathma and Ors. v. Omer  Cloth State and Ors., AIR 1986 Madras 90 overruled.     Panchamal  Narayan Shenoy v. Basthi  Venkatesha  Shenoy, [1970] 1 SCC 499 distinguished.     Mahboob  Badsha v. M. Manga Devi and Anr., [1965] 2  MLJ 209; K.J Sivalingam v.S. Guruswamy and Anr., [1983] 2 MLJ 85 referred to.     2. In the construction of sections such as 10 and 14  of the Act, the Court must be guided by the overriding legisla- tive  object  articulated in the Preamble to the  Act,  that ’the  control of rents of such buildings and the  prevention of  unreasonable eviction of tenants therefrom in the  state of Tamil Nadu." [636H; 637A]     Prabhakaran Nair and Ors. v. State of Tamil Nadu & Ors., [1987] 4 SCC 238 relied on. 618     3.  Section 14(1)(b), however, does not require  instant demolition,  but  demolition  within  the  specified   time. "Immediate purpose", in the context in which the  expression appears,  relates to directness rather than speed,  although absence  of the letter negative the former. It denotes  con- nection  and  timely  action, but not  instant  action;  yet delayed  action  is  a sign of remoteness  of  purpose.  The expression  must be understood as a directly  connected  and timely  purpose, and not a secondary or remote or  premature purpose.  Significantly,  the clause does not say  "for  the purpose  of immediately demolishing" which words might  have denoted  instant demolition. What section 14(1)(b)  says  is "immediate  purpose of demolishing". The legislative  intent is  that the purpose should be immediate or direct  and  not mediate or remote or indirect or secondary. The condition of the building need not be such as to warrant instant  demoli- tion, but it must be grave enough to need timely action  and rule  out  undue or protracted delay. The  landlord  is  not expected to wait till the building is in imminent or immedi- ate  danger of crumbling down so as to necessitate  recovery of possession for instant demolition. The purpose of demoli- tion  must  of course be immediately or  directly  connected with the requirement so as not to be separated by any inter- vening consideration. Demolition for the purpose of erection of a new building must be the direct immediate, genuine  and real requirement of the landlord. The bona fide character of the requirement is proved by the appropriateness of time and the  absence  of any ulterior  or  irrelevant  consideration separating  the requirement from the statutory or  permitted purpose.  The direct and immediate nexus between  these  two element is proved by the condition of the building and other relevant  circumstances. Absence of any need for urgency  by reason  of  the strong and sound condition of  the  building will  negative the bona fide character of  the  requirement. What  is the degree of urgency warranted by what  extent  of damage  to the building that makes the requirement  directly and  immediately connected with the statutory purpose  is  a question  of  fact  which must be decided in  each  case  on evidence.  But a building which is sound and safe  does  not qualify  for  demolition in terms of section  14(1)(b).  Any such building fails totally outside its ambit. [627B-H]     Black’s Law Dictionary, 5th Edn: Concise Oxford Diction-

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ary, New 7th Edn., referred to.     4.  The  requirement for demolition can be  regarded  as genuine and bona fide only when the condition of the  exist- ing building is such that a reasonable and prudent  landlord would regard it to be uneconomical to repair it rather  than demolish it and reconstruct a new building 619 Apart from the condition of the building, the nature of  the locality,  the  advantages arising from  reconstruction  the capacity of the landlord to erect a new building the  demand for accommodation and other factors suggesting the bona fide character of the landlord’s request for recovery of  posses- sion  under  section 14(1)(b) are relevant. Even  where  the condition of the building demands demolition, it is possible that, in view of the landlord’s lack of capacity to  rebuild or the futility of reconstruction by reason of the condition of  the  time and place, the authority may  regard,  without prejudice  to whatever power there is to enforce repairs  or demolition  in  certain circumstances, that  the  landlord’s application lacks bona fide. The authority has to take  into account the totality of the circumstances. [628H; 629A-C]     5. The absence of any provision to compel reinduction of the tenant after reconstruction or to compel  reconstruction after demolition and the non-applicability of the Act for  a period of five years after reconstruction make it imperative that the reasonableness of the landlord’s requirement should be  considered  with care and caution, bearing in  mind  the fundamental  legislative object to protect the  tenant  from unreasonable eviction. [628E-F]     6.  The  over-riding  consideration  underlying  section 14(1)(b)  is  the  bona fide need for  demolishing  the  old building and erecting a new building, once the demolition of the  old building is completed, for loss of time  means  not only  loss of income, but probably also  increased  expendi- ture. This construction must necessarily lead to the  inevi- table  conclusion  that the condition of the building  is  a basic and essential requirement of section 14(1)(b).  [628G- H]     7. The requisite circumstances warranting repairs  under clause  (a) or demolition under clause (b) of section  14(1) are matters for determination by the competent authority  on the basis of relevant evidence and the applicable provisions of  the law. In proceedings for judicial review,  the  Court does  not sit in judgment over appreciation of evidence  and finding of facts by the authority empowered by the  statute. He is the final judge of facts, and so long as he has  taken into  account all relevant facts and has eschewed  from  his mind  all irrelevant circumstances and has correctly  under- stood  and applied the law. including the rules  of  natural justice, his judgment is generally regarded as final and not open to challenge. On the other hand, where he has acted  in excess of his jurisdiction or asked himself the wrong  ques- tions  or misunderstood or misapplied the law or  failed  to consider  the  relevant circumstances, his  conclusions  are liable to be reversed as perverse 620 by  a  court exercising judicial review. Any  repository  of power  must act in accordance with the law and on the  basis of  relevant evidence. He must be guided by reason and  jus- tice and not by private opinion. [629D-F]     8. In the present case the Rent Controller asked himself the  wrong question. He did not think that the condition  of building was relevant. He disregarded the clear admission of the landlord and other evidence as regards the sound  condi- tion  of the building. The crucial condition for  demolition

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was thus absent. The Controller was totally misguided as  to the  conclusions  which he reached. So  were  the  appellate authority and the High Court. [636F-G]

JUDGMENT: