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PETITIONER: BAPUBHAI MOHANBHAl

       Vs.

RESPONDENT: MAHILA SAHAKARI UDYOG MANDIR

DATE OF JUDGMENT26/08/1975

BENCH: GUPTA, A.C. BENCH: GUPTA, A.C. BEG, M. HAMEEDULLAH CHANDRACHUD, Y.V.

CITATION:  1975 AIR 2125            1975 SCC  (4) 731  CITATOR INFO :  R          1984 SC 505  (15,17)

ACT:      Bombay, Rents,  Hotel and  Lodging House  Rates Control Act, L Vll of 1947-S. 13, 25,-Scope of.

HEADNOTE:      Section 13 of the Bombay Rents, Hotel and Lodging House Rates Control.  Act, 1  VII of  1947 (which  was the  Act in force in Gujarat) enumerates the grounds on which a landlord may obtain  possession of  the premises let out to a tenant. Clause (g)  of that  section provides  that the landlord can obtain possession  only if  he satisfies  the Court that the premises  are   reasonably  and   bona  fide   required  for occupation by  himself. Section  25 provides that a landlord cannot use  nor  can  he  permit  to  be  used  for  a  non- residential purpose any premises which, on the date when the Act came  into force,  were used  for a residential purpose. Sub-section (2)  of this  Section makes contravention of the provisions of sub-s.(1) punishable with imprisonment.      On the  date on  which the Act came into operation, the premises in  dispute belonging  to the  respondent were used for residential  purposes. The  respondent sought possession on the ground that it wanted them for its office for running a fair price shop, for establishing a godown, for conducting a tailoring  and sewing  class and  such other purposes. The trial cannot  and the  first appellate  court found that the respondent  needed   the  premises  for  its  business:  but dismissed the  suits on  the ground  that  in  view  of  the provisions of  s. 25 of the Act The requirement could not be said to  be reasonable  and bona fide. The High Court, while accepting that  the premises were required by the respondent for its  business, took  the view that since the legislature dill not  subject the  right conferred  on the  landlord  by s.13(1) to  any other  provision save the one contained in s 15 s.25 cannot be permitted to override s.13(1).      Allowing the appeal, ^      HELD: Though  the respondent  required the premises for the purposes of its business, no decree for possession could be passed in its favour as its requirement could not be said to be  reasonable. The requirement runs across the statutory

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prohibition and is, therefore, not reasonable. [415 E]      (1)  Under  s.13(1)(g)  it  is  not  sufficient  for  a landlord to  establish that  the premises  was e required by him but  it has  to be shown further that the requirement is reasonable and  bona fide. The requirement of the respondent in the  instant case  could not  be called reasonable if the very  statute  under  which  it  seeks  relief  contains  an injunction that  it shall not use residential premises for a non-residential purpose.  Not only  does the statute contain an injunction against the user of residential premises for a non residential purpose but it makes it penal For a landlord to use for a non-residential purpose any premises which were used for a residential purpose on the date when the Act came into force. [414C-E]      (2) (a) The approach of the High Court is misconceived. The true  question  for  consideration  is  not  whether  as between s.13(1)  and s.25(1),  one over-rides the other, and indeed. in  view of the wording of the non-obstane clause of s. 13 (1), the provisions of that section must have priority over the  rest of  the Act  except for  what is contained in s.15. But  conceding to  s.13(1) its rightful precedence and granting that  it stands supreme except for s.15,. according to its  own terms  the Court  has to  be satisfied  that the requirement of the landlord is reasonable. [415A-B]      (b) If  the respondent  fails it  is not  because  s.25 overrides s.13(1)  but because  of its  failure to prove the reasonableness of its requirement whether the requirement of the landlord  ms reasonable  or not ms to be judged from all the facts and circumstances of the case and a truly relevant circumstance- 412 bearing on  the reasonableness of the landlord’s requirement is that  the purpose  A for  which the possession was sought was a  purpose for which the premises could not be used save on pain of’ penal consequences. [415-CD]      (3) Courts sought not to construe a statute in a manner which will encourage the breach of any of its provisions and a decree  ought not  to be  passed which,  is’ honored, will attract penal  consequences. To  pass a  decree in favour of the respondent  on the grounds accepted by the High Court is to invite the respondent to commit a breach of the statutory injunction contained in s.25(1).[415-D]      Laxmi Co-perative Bank Ltd. v. Mohan Govind Diwanji, 74 B.L.R 186, approved.

JUDGMENT:      CIVIL APPELLATE JURISDICTION: Civil Appeal NOS. 574-575 of 1974.      From the judgment and decree dated the 19th April, 1973 of the Gujarat High Court in Civil Revision Application Nos. 1193 & 1194 of .1967.      P. H. Parekh and Manju Jaitley" for the appellant.      I. N. Shroff, for respondent.      The Judgment of the Court was delivered by      CHANDRACHUD, J. The appellants in these two appeals are monthly tenants of the respondent, the Mahila Sahakari Udyog Mandir. The  respondent filed  suits against  the appellants for possession  of the  premises let  out to  them,  on  the ground of  arrears of  rent  and  on  the  ground  that  the premises were  reasonably and  bona  fide  required  by  the respondent for  its own  purposes. On  both counts the trial court held  against the  respondent and dismissed the suits. The decree of the trial court was confirmed in appeal by the

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learned Assistant Judge, Surat but the High Court of Gujarat allowed the  respondent’s revision  application and  decreed the suits.  On March  11, 1974 the High Court granted to the appellants a  certificate to  appeal to this Court under the amended Article 133(1) of the Constitution.      The Bombay Rents, Hotel and Lodging House Rates Control Act, LVII  of 1947,  is in  force in  Gujarat  with  certain modifications. Section  12(1) of  the Act  provides  that  a landlord  shall’   not  be   entitled  to  the  recovery  of possession of any premises so long as the tenant pays, or is ready and  willing to  pay, the  amount of the standard rent and permit-ted  increases, if any, and observes and performs the other  conditions of  the tenancy, in so far as they are consistent with the provisions of the Act. Section 13 of the Act sets  out the  various grounds  on which  a landlord may recover possession  of the  premises let  out to the tenant. Sub-section (1) clause (1) of that section Provides:           "13. (1)  Notwithstanding  anything  contained  in      this Act but subject to the provisions of section 15, a      landlord shall be entitled to recover possession of any      premises if the Court is satisfied-- *         *         *         *         *         * 413           "(g) that  the premises  are reasonably  and  bona      fide required by the landlord for occupation by himself      or by  any person  for whose  benefit the  premises are      held or  where the  landlord is  a trustee  of a public      charitable trust  that the  premises are  required  for      occupation for the purposes of the trust;" Section  15(1)   provides  that   notwithstanding   anything contained in  any Law,  but subject  to any  contract to the contrary, it  shall not  be lawful  after  the  coming  into operation of  the Act for any tenant to sub-let the whole or any part of the premises let to him or to assign or transfer in any  other manner  his interest  therein.  Section  15(2) legalises sub  leases, assignments and transfers effected in favour of  persons as  have entered into possession and have continued in  possession on  the date of the commencement of the ordinance of 1959.      The trial  court and  the First  Appellate Court  found that the respondent required the premises for the purpose of its business but they dismissed the suits on the ground that ill view  of the  provisions of  section 25  of the Act. the requirement could  not be  said to  be reason  able and bona fide. The  High Court  accepted the  finding of  the  courts below that the penalises were required by the respondent for the purpose of its business but it differed from them on the question of  the applicability of section 25. The High Court has taken  the view  that section 13(1)(g) is not subject to section  25   and  therefore   the  question   whether   the requirement of  the landlord is reasonable and bona fide has to be  decided apart  from the provisions of section 25. The correctness of  this view  is challenged  by the  tenants in these appeals.      The scheme  of the  Act is that ordinarily the landlord shall not  be entitled  to evict  a tenant  so long  as  the latter pays  or is  ready and  will Judg to pay the standard rent and  permitted increases and so long as he observes and performs the  other conditions  of the tenancy, in so far as they are  consistent with  the provisions  of the  Act. This rule is  enunciated in  section 12(1). Section 13 of the Act is  in  the  nature  of  an  exception  to  section  12.  It enumerates  the   grounds  on  which  not  withstanding  the injunction contained  in section  12, a  landlord may obtain possession of  the premises  Act out  to the  tenant.  Under

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section 13(1)  (g), the  landlord can obtain possession only if he  satisfies the court that the premises are required by him "reasonably  and bona fide". If the issue as regards the reasonableness  of  the  landlord’s  requirement  is  to  be decided without  reference to  the provision  contained  ill section 25  the respondent  would  be  entitled  to  succeed because all  the three courts have found that the respondent requires the premises genuinely for occupation by itself for the purpose  of its business and that the requirement, apart from section  25. is  reasonable and  bona fide.  The  short question for  consideration in  these appeals is whether the reasonableness of  the landlord’s  requirement can be judged in the  light of  the provision  contained in  section 25 or whether, as held by the High Court, section 25 is to be kept out of way in judging that question.      By section  25, a landlord cannot use nor can be permit to be  used for a non-residential purpose any premises which on that  date when  the Act  came into force were used for a residential purpose. Under sub 414 section (2)  of section  25, a  landlord who contravenes the provisions   of   sub-section   (1)   is   punishable   with imprisonment for  a ter  which may extend to three months or with fine  or with  both. In  the instant case, the premises were admittedly  used for  a residential purpose on February 13,  1948  being  the  date  on  which  the  Act  came  into operation. It  is plain  from the language of section 25(1), that the  respondent cannot convert the user of the premises from a  residential to  a non-residential purpose. If it did so, it  would be liable to be, prosecuted and punished under section 25(2).      The respondent  sought possession  of the  premises let out to  the appellants and three other tenants on the ground that it  wanted one  room for  its  office,  two  rooms  for running a  fair-price grain-shop, two rooms for conducting a provision stores,  two rooms for preparing pickles, cleaning spices and  for keeping  the finished products for sale, two rooms for  establishing a  godown and  some more  space  for conducting a  tailoring and  sewing  class.  The  respondent succeeded in proving its requirement but its very success in establishing that  it  required  the  premises  for  a  non- residential purpose  is  its  failure  to  establishing  the ingredients of  section 13(1)  (g) of  the Act.  Under  that provision, it  is not sufficient for a landlord to establish that the premises  are required by him but it has to be show further that  the requirement  is reasonable  and bona fide. The requirement of the respondent in the instant case cannot ever be called reasonable, if the very stable under which it seeks relief  contains an  injunction that  it shall not use residential premises for a non-residential purpose. Not only does the  statute contain  an injunction against the user of residential premises  for a  non-residential purpose, but it makes it  penal for a landlord to use  for a non-residential purpose any  premises  which  were  use  for  a  residential purpose on  that date  when the  Act came into force. In the light of  section 25(1), granting a decree to the respondent for possession  of the  residential premises  on the  ground that  it  requires  those  premises  for  a  non-residential purpose  is   to  pave  the  way  for  its  prosecution  and punishment under section 25(2). In fact, such a decree would be self-defeating because whereas the decree shall have been passed on  the   ground that  the  respondent  requires  the premises for  a non-residential purpose, it will not be able to use  those premises  for the purpose for which the decree was granted, save on pain of prosecution.

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      Learned  counsel  for  the  respondent  places  great reliance on  the non-obstante  clause of  section 13 (1) and argues that  legislature ,  having considered  the  question whether section  13 should  be made subject to any other law or to  any other Provision of the Act came to the conclusion that it  should be made subject to the provisions of section 15 only  and therefore  it would  be wrong  to  subject  the provisions contained  in section  13(1) to  section 25.  The High Court  also approached  the problem before it by saying that the  material question  for consideration  was  whether section 13(1)  can be  made  subject  to  section  25.  This auction was  answered by the High Court by saving that since the legislature  did not  subject the right conferred on the landlord by  section 13(1)  to any  other provision save the one contained in sec 415 tion 15,  section 25 cannot be permitted to override section 13(1). This  approach, in  our opinion, is misconceived. The true question  for consideration  is not  wether as  between section 13(1)  and section 25(1) one overrides the other and indeed, in view of the wording of the non obstante clause of section 13  (1), the  pervasions of  that section  must have priority over  the rest  of the  Act,  except  for  what  is contained in  section 15. But conceding to section 13(1) its rightful precedence  and granting  that  it  stands  supreme except for  section 15, according to its own terms the court has to be satisfied that the requirement of the land lord is reasonable A  requirement which runs in the teeth of section 25 and which, if established, may throw the landlord open to the risk  of a  prosecution  cannot  be  called  reasonable. Therefore, if  the respondent  shall have  failed, it is not because section  25 overrides  section 13 (1) hut because of its failure  to prove the reasonableness of its requirement. Whether the requirement of the landlord is reasonable or not is to  be judged from all the facts and circumstances of the case and  a highly  relevant  circumstance  bearing  on  the reasonableness of  the land  lord’s requirement  is that the purpose for  which the possession is sought is a purpose for which the  premises cannot  be used  save on  pain of  penal consequence. Courts  ought not  to construe  a statute  in a manner which  will  encourage  the  breach  of  any  of  its provisions and,  most certainly,  a decree  ought not  to be passed which,  if honored,  will attract penal consequences. To pass  a decree in favour of the respondent on the grounds accepted by  the High  Court is  to invite the respondent to commit a  breach of  the statutory  injunction contained  in section 25 (1) .      In short,  therefore, though  the evidence  led by  the respondent is  sufficient to prove that it requires the suit premises for  the purpose  of its  Business, no  decree  for possession can  be passed  in its  favour as its requirement cannot be said to he reasonable. The requirement runs across a statutory prohibition and is therefore not reasonable.      The view  taken by  the  Bombay  High  Court  in  Civil Revisionary  Application   No.  2172   of  1957  decided  on September 3,  1959 and  in Laxmi  Cooperative Bank  Ltd.  v. Mohan Govind Diwanji(1), as also the view taken by a learned Single Judge  of the  Gujarat High  Court in  Civil Revision Application No.  896 of 1963 decided on March 7, 1967, is in our opinion  correct. The learned Judges of the Gujarat High Court were  in error  in the  instant case in departing from that view.      For these  reasons we  allow the appeals, set aside the judgement of  the High Court and direct that the suits filed by  the   respondent  against  the  appellants  shall  stand

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dismissed. Respondent  shall pay to the appellants the costs of these appeals. One set of hearing for only. P.B.R.                                      Appeals allowed. 416