11 September 1970
Supreme Court


Case number: Appeal (civil) 1460 of 1969






DATE OF JUDGMENT: 11/09/1970


CITATION:  1971 AIR 1081            1971 SCR  (2) 171  1970 SCC  (3) 124

ACT: Bombay  Rent Restriction Act (16 of 1939), s.  4(2)(b)-Lease of  land  giving  lessee  right  to  build  houses  and  let out--Whether ’premises’. Code of Civil Procedure Act (5 of 1908), 0. 12, r. 6, 0. 23, r,  3  Passing  more  than one decree-  in  the  same  suit- Legality.

HEADNOTE: The  predecessors  in interest of  the  respondents,  leased certain  land at an annual rent of Rs. 199, in 1895  for  49 years.  The lease was a permissive one and gave right to the lessees  to construct houses and let them out or to use  the land  in  any  manner.  The  original  lessees,  during  the currency  of  the lease made transfers of their  rights  and also  granted  sub-leases.   A number of  chawls  and  other buildings  were  constructed on the land and were  let  out. The  respondents terminated the lease and sued for  recovery of  possession in 1945.  A compromise was entered into  with the  appellants,  who  were some of  the  occupants,  and  a consent decree was passed on 8th July 1946.  Another consent decree  was passed against the remaining defendants on  28th January  1949.   Under the two decrees the  defendants  were allowed  to remain in possession for 5 years from the  dates of  the respective decrees and they bad also to pay  monthly mesne  profits which worked out to more than Rs.  7,000  per annum,  and that amount was so fixed that the mesne  profits due  for the 5 years were to be paid in 3 years.  There  was also  a  clause  that in case  of  default,  the  defaulting judgment-debtors could be immediately called upon to deliver possession  In  1953, the respondents sought  possession  by executing the consent decree dated 8th July 1946. On  the questions : (1) Whether the decree  contravened  the provisions of the Bombay Rent Restriction Act, 1939, as  the leased land was ’premises’ within the meaning of s.  4(2)(b) of  that Act; (2) whether the consent decree created  a  new tenancy  which was protected by the Bombay Rents, Hotel  and Lodging House Rates Control Act, 1947; and (3)    whether the passing of two separate decrees was illegal as the court was  not competent to do so. HELD : (1) ’Premises’ is defined in s. 4(2) (b) as any  land



let separately for the purpose of being used principally for business  or  trade.  The words ’business or trade’  do  not comprehend a lease which is merely for constructing  houses. The  terms  of  the  lease, in  the  present  case,  do  not establish that the lease was taken principally for using the land for ’business or trade.’ [174 C-D ; 175 G-H] The mere fact that there was a mention in the pleadings that any structure that might have been erected would have to  be removed,  would  in no way lead to the conclusion  that  the principal  purpose of the lease was to build structures  and that the structures should be utilised for being let out  on rent and thus constitute business or trade.  Therefore  tile decree did not contravene the provisions of the Bombay  Rent Restriction Act. [174 F-G; 175 D-E; 176 A] 172 (2)On  the  face  of  it,  all  that  the  consent  decree envisaged  was that though the judgment-debtors were  liable to immediate eviction, the decree holders agreed to let them continue  in possession for a period of 5 years, and,  since the  concession was granted as a special case,  the  decree- holders  insisted  on  payment of mesne profits  at  a  much higher  rate.  The terms of the consent decree could  in  no way  be interpreted as creating a new  tenancy  constituting the decree-holders as landlords and the judgment debtors  as their tenants. [176 C-E, F-G] (3)Order  23, r. 3 and 0. 12, r. 6 of the Civil  Procedure Code  envisage that in the same suit there can be more  than one decree passed at different stages [177 D-F]

JUDGMENT: CIVIL APPELLATE JURISDICTION:  Civil Appeal No.  1460 of 1969. Appeal  by special leave from the judgment and decree  dated January 16, 1969 of the Gujarat High Court in Letters Patent Appeal No. 31 of 1966. S.T.  Desai,  M. H. Chhatrapati, P. N. Tiwari and  O.  C. Mathur, for the appellants. D.   Y.  Patel and I. N. Shroff, for respondents Nos. 1  and 3. R.   H. Dhebar, B. Datta and S. P. Nayar, for respondent No. 2. The Judgment of the Court was delivered by Bhargava,  J.  The  predecessors-in-interest  of  plaintiff- respondents 1 to 3 gave, in 1895, land, bearing Serial  Nos. 503  and  506  of  Asarva within  the  limits  of  Ahmedabad Municipal Corporation, on lease for a period of 49 years  at an  annual  rent  of  Rs.  199/-,  to  three  persons,  Shri Ramchandra Ambaram, Pardesi Sukhlal Anandram and Mehta-Bogha Mugatram.   These original lessees, during the  currency  of the  lease, made transfers of their rights and also  granted sub-leases.   A  number of chawls and some  other  buildings were  constructed on the land and some of them were let  out on rent.  In 1945, the lessors, after serving notice on  the occupants  to  give  vacant possession,  filed  a  suit  for recovery  of possession.  The suit was decreed on 8th  July, 1946 on the basis of a consent decree as against some of the occupants  including the four defendant-appellants.  In  the agreement,  on the basis of which the decree was passed,  it was  agreed that the defendant appellants will  continue  in possession  of the property for a period of five  years  and will hand over possession after the expiry of this period of five  years.  For this period, they undertook to  pay  mesne profits  every month at various rates on the lands in  their



possession.  Between them, the four appellants were required to pay @ Rs. 227-10-0 per mensem making up an annual  amount of  mesne  profits  of Rs. 2,731-8-0.   Similar  terms  were included 173 in  the consent decree against other defendants  who  joined the  compromise on the basis of which the decree was  passed on  8th  July, 1946.  The remaining defendants in  the  suit entered  into a later compromise and,, as a result,  another consent  decree  was passed on’ 28th January,  1949  against those  defendants.   Under  this  decree,  these   remaining defendants were also entitled to continue in, possession for a period of five years from the date of the decree, but were required  to  pay mesne profits for this  period.   All  the defendants governed by the two decrees dated 8th July,  1946 and28th January, 1949, had to pay between them mesne profits monthly  which worked out to an amount of Rs. 7,314-8-0  per annum.   Before,  the  expiry of the period  of  five  years prescribed  by either of the two decrees, the  Custodian  of Evacuee  Property,  in  1950, took  possession  of  all  the properties,  as  one  of the  decreeholders  had  become  an evacuee.   After the property was released by the  Custodian of Evacuee Property, an application was filed by the decree- holders  on  26th March, 1953 for execution of  the  consent decree  dated  8th  July,  1946  and,  in  that   execution, possession was sought against the appellants of the property which  was in .their possession.  Subsequently, a number  of suits  were filed for recovery of mesne profits  also.   The Execution  Court directed eviction of the  appellants  after over-ruling  the various objections’ raised by them  in  the execution proceedings.  The decision of the Execution  Court on the objections taken by the appellants was challenged  in appeal before the District Judge, in second appeal before  a single Judge of the High Court of Gujarat, and by a  Letters Patent  appeal  before  a Division Bench.   All  the  Courts rejected  the objectic raised by the appellants  and  upheld the  order  of  the Execution Court  directing  delivery  of possession.   It  is against the judgment  of  the  Division Bench  in Letters Patent appeal in this execution  that  the appellants  have  come up to this Court in  this  appeal  by special leave. It  is  unnecessary  for  us  to  mention  all  the  various objections  that  were  taken  at  various  stages  by   the appellants  in  the  Execution Court, in the  Court  of  the District  Judge, or before the single Judge or the  Division Bench  in the High Court.  Only three of the  points  raised have been urged before us and, therefore, we are called upon to deal with these three points only. The  first point raised is that the decree which was  passed on  8th July, 1946 was a nullity, because it was  passed  in contravention  of  section  11  ( 1 )  of  the  Bombay  Rent Restriction Act No. XVI of 1939 (hereinafter referred to  as "the Act").  This objection has been over-ruled by the  High Court on’the ground that the provisions of the Act were  not attracted  by the lease in question on the expiry  of  which the suit for ejectment was decreed under the 174 consent decree dated 8th July, 1946.  Counsel appearing  for the appellants urged that the terms of the decree passed  as well  as the terms contained in the lease-deed of 1895  show that  the Act was applicable because the land, to which  the suit for ejectment related, was covered by the definition of "premises"  to  which  the  Act  applies.   The   expression "premises" is defined in section 4(2) of the Act as meaning-               (a)   any  building or part of a building  let



             separately for any purpose whatever, including               any land let therewith, or,               (b)   any land let separately for the  purpose               of  being  used principally  for  business  or               trade. Admittedly,  the  lease of 1895 was not in  respect  of  any building  or  part  of a building  let  separately  for  any purpose whatever.  Reliance was placed on section 4 (2)  (b) of the Act on the contention that the land had been let  for the purpose of being used principally for business or trade. Having gone through the documents relied upon by counsel for the appellants, we are unable to accept this submission.  In the  plaint of the suit, as well as in the decree dated  8th July, 1946, there is no mention of the purpose for which the land  was  let  out by the lease of  1895.   Reliance  was,, however, placed on one of the pleadings in the plaint  which had  been reproduced in the decree in which  the  plaintiff- respondents  recited  one of the terms of the lease  in  the following words :-               "On the expiry of the period of 49 years,  the               land shall be handed over without raising  any               dispute   or   objection   or   causing    any               obstruction,    after    removing     whatever               structures   that  might  have  been   erected               thereon  and  after making it as clear  as  it               is." The argument was that this pleading indicates that the  land was let out for making structures and those structures could only  be  utilised by being let out on rent.   This  purpose would  constitute business or trade.  We are unable  to  see any justification for such an inference.  The mere fact that there  was  a mention that structures that might  have  been erected  will be removed can in no way lead to a  reasonable conclusion  that the principal purpose of the lease was  the use of the land for business or trade. Reference, in this connection, was also made to the terms of the  lease  of  1895;  but we are unable  to  hold  that  it establishes  the case of the appellants that the  lease  was taken  principally  for the purpose of using  the  land  for business  or trade.  All that the lease mentions is that  it is for constructing houses and, at a later stage, 175 there  is  a mention that "in the said fields,  the  lessees could  construct  houses  in any manner or  use  it  in  any manner." The other parts of the lease, on which reliance has been placed are as follows :-               1.On the land of those fields we can build               houses  in  any  manner and  we  will  receive               income  thereof  and you will  not  raise  any               dispute or obstruction in respect thereof.  We               can  spend any amount on the  construction  of               those houses which we will not demand from you               for whatever reason nor we will have the right               to deduct from rent payable to you.               2.If  any houses are constructed  thereon,               we will remove the superstructures.  If we  do               not remove the structures then you will be the               owners  of the said structures.  If  you  take               them,    then   we   and   our    heirs    and               representatives will not object." We  are  unable to find even in these  quotations  from  the lease  any  mention  that  the land  is  going  to  be  used principally for the purpose of business or trade.  The lease does  mention  that  it was  being  taken  for  constructing houses.  ’Mere was no mention at all, however, of the manner



in  which  the  constructed  houses  were  to  be  utilised. Further,  there is a clear option given to the lessees  that they  could  us,-, the land in any manner if  they  did  not construct any houses.  These are terms on the basis of which it  cannot  be  said that the land was  being  let  out  for business purposes. The  submission of counsel for the appellants was  that,  if the  purpose  was to construct houses and let  them  out  on rent,  that  would constitute the use of the  land  for  the purpose of business inasmuch as the lessees would be earning income  from  letting out those houses.  We  are  unable  to accept  this  submission, because we do not think  that  the word  "business’  or  "trade"  used  in  the  definition  of "premises"  in  section  4 (2) (b) of  the  Act  comprehends within  it a lease which is merely for constructing  houses. Learned  counsel  cited before us a number of  decisions  of Indian and English Courts, including decisions of the  Privy Council  and  this Court,, in which the scope  of  the  word "business"  was interpreted.  That interpretation was  given in  connection  with the word "business" as used  either  in income-tax  law  or  in  the terms  of  a  covenant  or  the Companies  Act, etc.  We do not consider that it will be  at all  profitable to refer to them when interpreting the  word "business"  or  "trade" as used in section 4(2) (b)  of  the Act, because none of those interpretations will cover a case similar  to the one before us, where the lease was merely  a permissive  one giving a right to the lessees  to  construct houses  and let them out or to use the land in  any  manner. When the purpose of the lease 176 was expressed in this way, it is impossible to hold that the principal  use,  to  which the land was to  be  put  by  the lessees,  was business or trade.  As a consequence  of  this interpretation,  it  has  to be held that the  Act  was  not applicable to the lease of 1895 and, therefore, no  question arises of the decree of 8th July, 1946 being invalid on  the ground of contravening section 11 ( 1 ) of the Act. The  second point urged by learned counsel was that, by  the consent  decree itself, a new tenancy was created which  was to continue for five years and, in the, meantime, the Bombay Rents  Hotel  & Lodging House Rates Control Act,  1947  came into force and the appellants were protected from  ejectment under  the provisions of that Act.  The consent decree  does not state that a new tenancy is being created.  The argument was  that  the  terms  of  that  consent  decree  should  be interpreted  as  indicating  an intention to  create  a  new tenancy.’ We are unable to find any such terms.  On the face of  it,  all that the, consent decree  envisaged  was  that, though   the  judgment-debtors  were  liable  to   immediate eviction, the decree-holders agreed to let them continue  in possession   for  a  period  of  five  years.   Since   this concession was being granted as a special case, the  decree- holders insisted that mesne profits should be paid at a much higher  rate  so much so that between  all  the  defendants, governed  by  the  two decrees of 8th July,  1946  and  28th January,  1949, the amount payable as mesne  profits  became Rs.  7,314-8-0  per  annum which had no  relation  with  the original  rent  of Rs. 199/- per annum for the  entire  land fixed  by  the  lease of 1895" In  fact  the  decree-holders sought further protection by requiring the  judgment-debtors to  pay  the mesne profits in monthly instalments,  and  the instalments  were  so fixed that the mesne profits  due  for five  years were to be paid within a period of three  years. There  was  the further clause that, in case of  default  of payment  of  the  mesne profits,  the  defaulting  judgment-



debtors   could  be  immediately  called  upon  to   deliver possession.   These terms can, in no way, be interpreted  as creating  a new tenancy constituting the  decree-holders  as landlords  and  the judgmentdebtors as their  tenants.   The terms  of the consent decree neither constituted  a  tenancy nor a licence.  All that the decree-holders did was to allow the  judgment-debtors  to continue in  possession  for  five years  on  payment  of mesne profits  as  a  concession  for entering  into  a compromise.  The argument  advanced  must, therefore, be rejected. Reference was made by learned counsel for the appellants, in support  of his argument, to a decision of the  Bombay  High Court in Gurupadappa, Shivlingappa Itgi v. Sayad Akbar Sayad Budan  Kadri(1),  but  that case, in  our  opinion,  has  no application.  In (1) 52 B.L.R. 143. 177 that  case, in the consent decree itself, the  first  clause was that the defendant admits that he is a monthly tenant of the plaintiff and is to continue in possession till  January 31,  1948.   This clause specifically and  clearly,  in  the language  used,  made it manifest that the defendant  was  a monthly  tenant  and  was to continue in  that  capacity  in possession.  It was in these circumstances that it was  held that  a  new tenancy had been created from the date  of  the consent  decree.   In the case before us, the terms  of  the consent decree are in no way comparable with the terms  used in  the consent decree in that case.  The language  used  in the   consent  decree  in  the  present  case  contains   no indication of any intention to create a tenancy, so that the Bombay Rent Control, Act. 1947 could never apply to the case of the appellants. The  third point raised by learned counsel was  that,  since there  was  one single suit based on the lease of  1895  for ejectment of persons in possession, there could be only  one single decree in that suit and the Court was incompetent  to pass  two  separate  decrees  on 8th  July,  1946  and  28th January,  1949.  Counsel, in this connection, relied on  the provisions  of  rules 1 and 12 of Order XX of  the  Code  of Civil  Procedure  which  relate  to  the  pronouncement   of judgment  and the Court passing a decree in a  suit.   These rules  have really no relevance.  On the other hand, rule  3 of  Order  XXIII, C.P.C., clearly envisages a  decree  being passed in respect of part of the subject-matter of the  suit on  a compromise, and rule 6 of Order XII,  C.P.C.,  permits the  passing of a judgment at any stage without waiting  for determination  of other questions.  Thus, it is clear  that, in  the same suit, there can be more than one decree  passed at different stages.  In the present case, the first  decree of  8th  July, 1946, was based on a compromise  between  the plaintiffs  and  some of the defendants,  while  the  second decree  dated 28th January, 1949 decided the rights  of  the remaining  defendants.  Th.-, two decrees were separate  and independent  and  neither  of them could  be  treated  as  a nullity. In these circumstances, the Execution Court was right in re- jecting  all the objections raised by the appellants and  in directing  delivery of possession.  The appeal fails and  is dismissed with costs. V.P.S.                                                Appeal dismissed. 178