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PETITIONER: VITHAL KRISHNAJI NIVENDKAR

       Vs.

RESPONDENT: PARDUMAN RAM SINGH & ANOTHER

DATE OF JUDGMENT: 27/03/1962

BENCH:

ACT: Rent  Control-Donation received by a person  for  charitable trust--When an offence-Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (Bom. 57 of 1947) s. 18 (1).

HEADNOTE: The appellant was the President, Trustee and Secretary of  a Sangh, which was a public trust registered under the  Bombay Public  Trust Act. 1950.  The appellant agreed to grant  the lease of a residential block, which was owned by the Sangh, at  a  monthly  rent of Rs. 85.00 in  favour  of  the  first respondent  on  payment of Rs. 3,251/- as  donation  to  the building  fund of the said Sangh, which was paid before  the first  respondent  actually  occupied the  premises.   The appellant was convicted under s. 18 (1) of the Bombay Rents, Hotel  and  Lodging House Rates Control Act,  1947,  by  the Presidency Magistrate who held that the amount was  received as  premium,  as  a  condition  precedent  for  letting  the premises.  On appeal the High Court held that the  aforesaid payment  even  if  it did not  come  within  the  expression "premium or other like sum" for granting the tenancy of  the premises, it was received by the appellant as "consideration other  than the standard rent" in respect of the grant of  a lease  of  the  premises  and  dismissed  the  appeal.   The appellant came up by special leave in appeal to the  Supreme Court. The question is whether a sum of money paid ostensibly .as a donation  by a person to the person acting on behalf of  the landlord,  which was a charitable trust, in respect  of  the grant  a lease of the premises, came within  the  expression "fine,  premium  or  other  like  sum  or  deposit  or   any consideration other than the standard rent" in sub-s. (1) of 18 of the Act. 64 Held,  that where the donation has been received in  respect of the granting of the lease and not as a free donation  for the  advancement of the purposes of the Sangh it  will  come within the expression "premium" or "consideration" in s. 18. The consideration can be pecuniary or non-pecuniary. The mere use of the word "donation" I dose not take away the effect  of the other expressions used which clearly  support that  the  payment was made for the purpose of  getting  the tenancy of the premises. The appellant was a trustee of the Sangh.  He was’ receiving rent  on  account  and on behalf of the  Sangh  and  clearly therefore  he  comes  within the  expression  "landlord"  as defined in the Act.  The fact that he had acted on behalf of the  trust and not for any personal reasons does not  affect the  question or the appellant’s conduct coming  within  the

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provision  of s. 18 (1) and can affect only the  quantum  of sentence. Karansey Kanji v. Velji Virji, (1954) 56 Bom.  L. R. 619.

JUDGMENT: CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 52  of 1960. Appeal  by special leave from the judgment and  order  dated September  9,  1959, of the Bombay High  Court  in  Criminal Appeal No 916, of 1959. R.   Gopalakrishnan, for the appellant. H.   R. Khanna and R, H. Dhebar, for the respondent No. 2. 1962.  March 27.  The Judgment of the Court was delivered by RAGHUBAR.   DAYAL, J.-This appeal, by special leave,  raises the  question  whether a sum of money paid  ostensibly  as,a donation  by a person to the person acting on behalf of  the landlord,  which was a charitable trust, in respect  of  the grant of a lease of the premises, came within the expression ’fine  premium  or  other’  like  sum  or  deposit  or   any consideration other than the standard rent’ in sub-a. (1) of a. 18 of the Bombay 65 Rents, Hotel and Lodging House Rates Control Act, 1947 (Bom. Act LVII of 1947), hereinafter called the Act. The  question arises in these circumstances.  The  appellant was  the  President, Trustee and Secretary  of  the  Tillori Kunbi  Samajonnati  Sangh (hereinafter  called  the  Sangh), Bombay,  in 1958.  The Sangh was a public  trust  registered under  the  Bombay  Public  Trusts  Act,  1950.   The  first respondent  approached  him for taking on rent  one  of  the residential  blocks of Waghe Hall at St. Xavier Road,  Parel Bombay,  which  was  owned  by  the  aforesaid  Sangh.   The appellant  agreed  to grant the lease of the premises  at  a monthly rental of Rs.85/- in favour of the first  respondent on payment of Rs.3251/- as donation to the building fund  of the  said Sangh.  The first respondent paid this  amount  in four installments, three of which were paid prior to May  1, 1958,  and the fourth, of Rs.1,000/- on May 1, 1958,  before his actually occupying the premises. , The appellant  admits the receipt of this amount of Rs.3251/, for donation to  the building  fund.  He contends that he was not a landlord’  as defined  in the Act.  The Presidency Magistrate, 7th  Court, Dadar, held that the amount was received as a premium, as  a condition  precedent for letting the premises to  the  first respondent  and that therefore the appellant  committed  the offence under s.18(1) of the Act. On appeal, the High Court of Judicature at Bombay held  that aforesaid  payment,  even  if it did  not  come  within  the expression  "premium  or other like sum’, for  granting  the tenancy of the premises it was received by the appellant  as ,consideration other than the standard rent’ in respect  of the  grant  of  a lease of the premises  and  therefore  the conviction  was  correct.   It  accordingly  dismissed   the appeal.   It  is against this order that the  appellant  has filed this appeal. 66 Learned  counsel  for the appellant has urged  that  various enactments  allowed companies to receive donations and  that the  Memorandum  of Association and the Rules of  the  Sangh also  permitted  receipt of gifts of money, that  the  first respondent made the donation voluntarily and that  therefore the donation cannot amount to a ‘premium’ or ’consideration’ contemplated by subs.(1) of s.18 of the Act.  The fact  that

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the  Sangh,  can  legally received  donations  from  persons whether  belonging to  the Tillori Kunbi community  or  not has  no bearing on the question before us. If  the  donation has  been received in respect of the granting of  the  lease and  not  as  a free donation for  the  advancement  of  the purpose  of the Sangh, it will come within.  the  expression Pretoria,’. or consideration’ in s. 18. Both the Courts below have held that the so called  donation was  not a free gift to the Sangh but was paid by the  first respondent and received by the appellant for the letting  of the premises to the first respondent.  There is evidence  on the  record  to  support this finding of fact.   We  see  no reason to consider the finding vitiated by any error of law. Our attention has been drawn by the learned counsel for  the appellant  to  the letter dated July 2, 1958,  sent  by  the first  respondent to the Secretary of the Sangh.  The  first respondent said, in paragraph 1:               "...I  became a tenant of one of  your  ground               floor blocks by paying a donation of Rs.3251/-               only and in return I was promised a clean  new               block." This  statement  in no way supports the contention  for  the appellant  that  the  amount was paid as  a  free  gift  for furthering the objects of the Sangh.  On the other hand, it clearly states that the first                             67. respondent   became  a  tenant  by  paying  a  donation   of Rs.3251/-. The mere use of the word donation’ does not  take away the effect of the other expressions used which  clearly supports the finding of the High Court that the payment  was made  for  the  purpose  of  getting  the  tenancy  of  the, premises. It was further urged that charitable trusts are exempt  from the  operation  of  the Act and reference was  made  to  the provisions of s. 4 of the Act.  Clause (ii) of sub-s.(2)  of this  section provides that the State Government may  direct that  all  or any of the provisions of the Act  shall.  not, subject  to  such conditions and terms all it  may  specify, apply  generally  to premises held by a public trust  for  a religious or   charitable  purpose and let at a  nominal  or concessional  rent.  There is nothing on the record to  show that  the State Government had issued any  such  directions. Further, the amount charged for    the  premises let to  the first  respondent cannot be said to be nominal and  has  not been  shown  to  be  concessional  rent.   This   contention therefore has no force. The  contention that the appellant does not come within  the expression  ’landlord’  defined in sub-s.(3) of s.5  has  no force.   The expression ’landlord’ includes a person who  is receiving, or is entitled to receive, rent in respect of any promises on account, or on behalf, or for the benefit of any other  person,  or as a trustee for any other  person.   The appellant was a trustee of the Sangh.  He was receiving rent on account and on behalf of the Sangh and clearly  therefore he comes within the expression ’landlord’ as defined in  the Act. It  is further contended that the amount paid does not  come within the expressions ’premium’ or ’consideration.’ in sub- s.(1) of s.18 of the Act.  We do not agree.  ’Premium’ means any amount paid for the purpose of getting a lease.  It was 68 certainly  paid as a ’consideration for obtaining the  lease in this case.  We agree with the High Court that there is no reason  to  restrict the expression consideration’  to  non- pecuniary consideration alone, as was held in Karamsey Kanji

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v. Valji Virji ’1) No good reason exists for restricting the meaning  of this word to non-pecuniary consideration  alone, even though any pecuniary consideration paid in respect.  of the  grant  of  the  lease  will  usually  come  within  the expression ’Premium’.  The fact that the sentence of  fine,, according to the provisions of sub.s.(1) of s.18, is not  to be  less than the ’value of the consideration  received’  is not  sufficient  to limit the expression  consideration’  to non-pecuniary consideration alone. The  previous  rent-control  Acts,  viz.,  the  Bombay  Rent Restriction.   Act,  1939 (Bom.  Act XVI of  1939)  and  the Bombay Rents, Hotel Rates and lodging House Rates  (Control) Act,  1944 (Act VII of 1944) which were repealed by the  Act provided in s.10 and 8 respectively, against the, landlord’s requiring the payment of any fine, premium or any other like aura in addition to the rent in consideration of the  grant, renewal  or continuance of a tenancy of any  premises.   The addition of words deposit or any consideration’ in sub-s.(1) of  s.18, must have been to cover all payments  besides  the standard  rent in consideration of getting the tenancy.   In the circumstances, it need not be a matter of surprise  that certain extra payments may come within more than one of  the expressions fine’, ’premium’ ’other like sum’, ’deposit’  or ’consideration’. In  this connection, reference may be made to Explanation  1 to sub-s.(4) to s.18 which reads:                   "For the purpose of sub-section (1)               (a)   except as provided in sub-section (3)               (1) (1954) 56.  Bom.  L.R. 619.               69               receipt of rent in advance for more than three               months  in  respect of premises  let  for  the               purpose of residence, or               (b)   where any furniture or other article  is               sold  by  the landlord to  the  tenant  either               before or after the creation of tenancy of any               premises,  the  excess of the  price  received               over the reasonable price of the furniture  or               article,  shall  be  deemed to be  a  fine  or               premium or consideration." The receipt, of rent referred to in cl.(a) and the excess of the  price  received  over  the  reasonable  price  of   the furniture  or other article referred to in cl.(b) is  always to  be  in cash and yet the Explanation  provides  that  the receipt  of rent and the excess of the price  coming  within the  provisions  of cls.(a) and (b) respectively,  shall  be deemed to be a fine or premium or consideration’. Lastly, it was urged that the appellant just acted on behalf of  the  trust  and not for any  personal  reasons.  Such  a consideration   does   not  affect  the  question   of   the appellant’s conduct coming    within the provisions of  sub- s.(1)  of s.18 and can affect only the sentence,  which,  in the  present case, had been the minimum possible, under  the law.   The appellant was sentenced to imprisonment till  the rising  of the Court and’ a fine of Rs. 3251/-.  Sub-s.  (1) of  s.18  provides  that a person,  on  conviction  for  the offence under that section be punished with imprisonment for a,  term  which may extend to six months and shall  also  be punished with fine which shall not be less than the  amount of  fine,  premium  or sum or deposit or the  value  of  the consideration received by him. We  are  therefore of opinion that the appellant  has  ’been rightly convicted under s.18(1) of the Act and,  accordingly dismiss the appeal.                              Appeal dismissed..

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