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PETITIONER: Dr. K. A. DHAIRYAWAN AND OTHERS

       Vs.

RESPONDENT: J.  R. THAKUR AND OTHERS

DATE OF JUDGMENT: 28/04/1958

BENCH: IMAM, SYED JAFFER BENCH: IMAM, SYED JAFFER SINHA, BHUVNESHWAR P. KAPUR, J.L.

CITATION:  1958 AIR  789            1959 SCR  799

ACT:        Rent   Control--Lease  of  land  for   fixed   period-Lessee        constructing  building  on land--Covenant  for  delivery  of        Possession of building to lessor on expiry of term of lease-        Statute  protecting  lessee  from  eviction-If  applies   to        covenant--Whether  statute  extends Period  of  lease-Bombay        Rents, Hotel and Lodging House Control Act, 1947.

HEADNOTE: The  lessors  granted  a lease of a parcel of  land  to  the lessees  for 21 years at a rent of Rs. 50 per month.   Under the  terms  of  the lease the lessees were  to  construct  a double  storeyed building on the land at a cost of not  less than  Rs.  10,000.   The  construction  had  to  be  to  the satisfaction of the lessors’ engineers, and the building had to be insured for at least Rs. 12,000 in the joint names  of the lessors and the lessees with an insurance firm  approved by  the  lessors.   In case of  damage  or  destruction  the building  was to be repaired out of the money received  from the  insurance  company.  On the termination  of  the  lease either  at the end Of 21 years or earlier, the lessees  were to surrender and yield up the demised premises including the building with its fixtures and appurtenances to the  lessors without any compensation for the same.  After the expiry  of the 21 years the lessors filed a suit for a declaration that they  were  entitled to the building, and were  entitled  to claim  possession of the same and to recover the  rents  and profits  thereof.  The lessees pleaded that they  were  also lessees  of  the building and were protected  from  eviction therefrom  by the provisions of the Bombay Rents, Hotel  and Lodging  House Control Act, 1947 and that the  covenant  for delivery of possession of the building could not be enforced as the lease in respect of the land could not be  terminated on account of the protection given by the Act. Held, that upon a proper construction of the lease there was a demise only of the land and not of the building and conse- quently  the  provisions  of the Act did not  apply  to  the contract  for delivery of possession of the  building.   The ownership in the building was with the lessees and in  which the  lessors had no right while the lease subsisted.   There was  no  absolute  rule of law in India  that  whatever  was

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affixed  or  built on the soil became part of  it,  and  was subject to the same rights of property as tile soil itself. Narayan  Das Khettry v. Jatindra Nath Roy Chowdhury,  (1926) 54 I.A. 218 and Vallabhdas Narranji v. Development  Officer, Bandra (1928) 56 I.A. 259 followed. 102 800 Held,  further,  that  the provisions of  the  Act  did  not provide for a continuation of the lease beyond the specified period  stated therein.  The Act merely gave to  the  lessee who  continued in possession even after the expiry  of  tile period  of  the lease the status of a statutory  tenant  and protected him from eviction.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 192 of 1954. Appeal  from the judgment and decree dated August 29,  1952, of  the Bombay High Court in Appeal No. 79 of 1952,  arising out  of the judgment and decree dated June 27, 1952, of  the said  High  Court  exercising its  Ordinary  Original  Civil Jurisdiction in Suit No. 2325 of 1948. A.V.   Viswanatha   Sastri  and  Naunit  Lal,   for   the appellants. L.K.  Jha, Rameshwar Nath, S. N. Andley and P. L.  Vohra, for the respondents. 1958.  April 28.  The Judgment of the Court was delivered by IMAM  J.-The  appellants,  as trustees,  of  the  Mankeshwar Temple  Trust  had filed suit No. 2325 of 1948 in  the  High Court of Bombay in its Ordinary Original Civil Jurisdiction, for a declaration that they were entitled to the building in suit  and were entitled to claim possession of the same  and to  recover the rents and profits thereof.   The  appellants further  prayed  that  the defendants  may  be  ordered  and decreed to obtain a letter of attornment from the tenants of the  said  property attorning to the  appellants,  that  the first  defendant  may be ordered to render accounts  of  the rents received by him from the tenants of the said  property from May 23, 1948, and that pending the hearing of the  suit a  Receiver may be appointed of the property in  suit.   The appellants had obtained leave of the High Court under 0. 11, r.  2 of the Civil Procedure Code reserving to them  liberty to  file a separate suit with respect to the land  on  which the building was situated.  The learned Judge who heard  the suit  decreed  it in part in favour of the  appellants.   He also passed an order of injunction restraining the 801 defendants  1,  2  and 5, their agents  and  servants,  from interfering with the exercise of the right of the appellants in  obtaining  possession  of  the  building  or   otherwise effectuating   their   possession  consistently   with   the provisions of law.  He further directed the first  defendant to account for the rents recovered by him from and after May 23,  1948, till the date of the decree. He refused to  grant the prayer that the defendants be directed to obtain letters of attornment from the tenants of the building in favour  of the  appellants.   Against  this  decision  the   defendants appealed and a Division Bench of the High Court allowed  the appeal,  reversed  the  decision  of  the  trial  Judge  and dismissed the suit with costs. On May 23, 1927, Krishnarao Ganpatrao and Shamrao Ganpatrao, as trustees of the Mankeshwar Temple, executed a  registered lease,  Exbt.   A,  in  favour  of  Moreshwar  Kasinath  and Radhabal,  wife  of Ramkrishna Bhai  Thakore,  whereby  they

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demised  a parcel of land specified in the Schedule  to  the document.  The lease was for twenty-one years.  The area  of land was about 213.66 square yards and the rent reserved was Rs.  50 per month.  Under the terms of the lease the  lessee had  to  construct within six months from the  date  of  the lease a double storeyed building consisting of shops on  the ground floor and residential rooms on the upper floor.   The cost  of  construction was to be not less than  Rs.  10,000. The  construction  had  to be to  the  satisfaction  of  the lessors’   engineers.    There  were   certain   restrictive covenants in the lease.  The building had to be insured  for at  least Rs. 12,000 in the joint names of the  lessors  and the lessees with an insurance firm approved by the  lessors. If  the  building  was damaged or destroyed  it  had  to  be repaired  or  restored  by the use of  the  insurance  money received from the insurance company.  On the termination  of the lease either at the end of twenty-one years or  earlier, the  lessees  were  to surrender and yield  up  the  demised premises  including  the  building  with  its  fixtures  and appurtenances  to the lessors without any  compensation  for the same.  On May 14, 1948, shortly before the lease was  to expire, the appellants who were 802 then  the  trustees  of  the  temple  gave  notice  to   the respondents  to deliver possession of the  demised  premises and the building on the expiry of the lease, that is to say, on  May 22, 1948.  On May 19, 1948, the respondents  replied that  they. were entitled to the benefits of the  provisions of  the Bombay Rents, Hotel and Lodging House Rates  Control Act, 1947, hereinafter referred to as the Act, and that  the appellants were not to interfere with their possession.  All that  they could get was the rent under the lease  from  the respondents.   On  July 23, 1948, the  appellants  gave  the respondents  notice  to quit the building only as  in  their opinion the Act did not apply to it.  On July 27, 1948,  the respondents, replied asserting that the Act did apply to it. The  appellants, accordingly, filed the present suit in  the High Court on September 1, 1948. The  period of the lease under Exbt.  A having  expired  and the respondents having been given notice to quit, they  were bound  to  vacate  the demised  premises  unless  they  were protected by the provisions of the Act.  Land used for  non- agricultural purposes is "premises" under the Act.  Although the  period  of  the  lease  had  expired  the   respondents continued to remain in possession without the assent of  the lessors.  Under the Act they would, therefore, be tenants of the land within the meaning of that expression as defined in the  Act.  There can be no question that so far as the  land demised by the lease is concerned the respondents could  not be  evicted so long as they complied with the provisions  of the Act and the lessors, as landlords, were unable to resort to  any of the provisions of s. 13 of the Act to  evict  the respondents  from the land.  Indeed, the appellants did  not claim  in  the plaint that they were entitled to  evict  the respondents from the demised land.  The plaint, as  drafted, confined  the reliefs claimed by the appellants only to  the building constructed on the land. The substantial question in issue in this appeal is  whether on  a proper construction of the lease, Exbt.  A, it can  be held  that  not only the land but also the  building  to  be constructed on it had been demised under it, Other questions had also been raised in the 803 course  of  arguments.   It  was argued  on  behalf  of  the respondents that the appellants could not get possession  of

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the building until the lease had been determined.  The lease could  not be determined as under the law they could not  be compelled  to give up possession of the land  demised  under the  lease  as  they were tenants of  the  land  within  the meaning of the Act.  A further submission made was that even if  the lease did not purport to demise the  building  which was  to  be  constructed  on the  land  demised  under  that document,  the  appellants  were  not  entitled  to  get   a declaration  to  the effect that they were entitled  to  the rents  and profits from the building which had been let  out to.  several persons by the respondents and the  respondents could not be restrained from interfering with the collection of the rents and profits from the building by the appellants so  long as the respondents were in possession of  the  land demised.   It was also urged that the suit must at any  rate fail  on the ground that defendant No. 4 having died  before the  institution of the suit and her name being  struck  off from  the  category of defendants and her  legal  heirs  and representatives not having been brought on to the record the suit was bad on account of non-joinder of necessary parties. A  perusal of the Schedule to the lease shows that what  was demised thereunder was a parcel of land of an area of  about 213 square yards with New Survey No. 1/2600 cadestral survey No.  96.  The Schedule leaves no room for doubt as  to  what was demised.  Under the terms of the lease the rent  payable for this land was Rs. 50 per month.  The terms of the  lease show   that  the  land  was  demised  for  the  purpose   of constructing a building thereon by the lessees.  Clause 1 of the  lease  may be quoted as the respondents  have  strongly relied upon this clause in support of their contention  that what  was demised under the lease was not only the land  but also  the building to be erected thereon.  This clause  runs as follows: "  In  consideration of the Expenses to be incurred  by  the Lessees  in  and about the erection and  completion  of  the building  hereinafter  mentioned and the  rents  hereinafter reserved and the Lessee’s covenants 804 hereinafter contained the Lessors do hereby demise UNTO  the Lessees ALL that piece or parcel of land situated at  Supari Baug  Road,  more  particularly described  in  the  Schedule hereto and delineated in the plan thereof hereto annexed and marked  " A " and therein bounded by a red line TO HOLD  the premises  unto the LESSEES for the term of  21  (twenty-one) years  to  be  computed  from the  date  of  these  presents yielding  and  paying therefor on the 10th day of  each  and every  Calendar month the first of such payments to be  made on  10th  of  next,  upon  the  terms  and  subject  to  the coventiits and conditions hereafter contained:" Another clause upon which reliance had been placed was el. 6 which provides for the building to be erected to be  insured in  the joint names of the lessors and the lessees  with  an insurance  company approved by the lessors.  It was  pointed out  that the building was to be handed over to the  lessors at the end of the lease without compensation to the lessees. We  have examined the various clauses of the lease and  find that in none of them has it been positively stated that  the building  to be erected on the demised land would be in  the ownership  of  the lessors and that the  building  would  be deemed  to  have been leased to the lessees along  with  the demised land.  Under the law there was no impediment in  the way of the parties to have had a clause, in a positive form, to that effect.  In the absence of such a clause the various clauses  of  the  lease,  as they exist,  will  have  to  be construed  in  order  to  ascertain  whether  on  a   proper

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construction thereof it can be said that there had also been a,  demise of the building.  The Schedule to the  lease,  as already stated, specifically mentions that the land had been demised  and there is no mention therein that  the  building when constructed thereon would also form part of the demised property.   In 1927 when the lease was executed the Act  was not in existence and it may reasonably be said that none  of the  parties  had  ever in contemplation  that  the  Act  or anything  akin  thereto  would  become  law  in  the  future affecting  the rights of the parties under the  lease.   The various clauses of the 805 lease  are  consistent with the ownership  in  the  building being  with  the lessees in which the lessors had  no  right while  the  lease  subsisted.  In the case  of  Narayan  Das Khettry v. Jatindra Nath Boy Chowdhury(1) the Privy  Council approved the observations of Sir Barnes Peacock in the  case of  Thakoor  Chunder Poramanick  v.  Ramdhone  Bhuttacharjee (2)to the following effect: We have not been able to find in the laws or customs of this country any traces of the existence of all absolute rule  of law that whatever is affixed or built on the soil becomes  a part of it, and is subjected to the same rights of  property as  the soil itself." In the case of Vallabhdas  Naranji  v. Development  Office,),,  Bandra (3) the Privy  Council  once again referred to Sir Barnes Peacock’s observation as stated above.    The  Privy  Council  also  quoted  the   following observation  of  Couch,  C. J., in the case  of  Narayan  v. Bholagir (4):........... We cannot, however, apply to  cases arising  in  India  the doctrine of the English  law  as  to buildings, viz., that they should belong to the owner of the land.  The only doctrine which we can apply is the  doctrine established in India that the party so building on another’s land should be allowed to remove the materials." Normally,  under  s. 108 of the Transfer  of  Property  Act, before  the  expiry of the lease, a lessee  can  remove  all structures and buildings erected by him on the demised land. All  that was necessary for him to do was to give  back  the land to the lessor, on the termination of the lease, in  the same condition as he found it.  The ownership, therefore, of the  building in this case was not with the lessors but  was with the lessees.  Under s. 108 of the Transfer of  Property Act there was nothing to prevent the lessees contracting  to hand  over any building or structure erected on the land  by them to the lessors without receiving any compensation.   In other words, although under s. 108 the lessees had the right to  remove the building, by the contract they had agreed  to hand  over  the  same to the lessors without  the  right  to receive compensation at the end of (1)  (1926) 54 I. A. 218. (3)  (1928) 56 I.A. 259. (2)  6 Suth.  W. R. 228. (4)  6 Bom.  H. C. (A.  C. J.) 8o. 806 the lease, the matter being entirely one of contract between the parties.  Such a contract, however, did not transfer the ownership  in  the building to the lessors while  the  lease subsisted. The various clauses of the lease in the present case make  a clear  distinction  between  the demised  premises  and  the building,  by using the words " demised  premises  including the building to be erected thereon It was, however, urged on behalf of the respondents that cl.  I of the lease indicated that what was demised by the lease was not only the land but also  the  building to be constructed thereon,  because  the

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opening words of el.  I make it clear that in  consideration of  the expenses to be incurred by the lessees  in  erection and  completion  of the building and the rent  reserved  the lessors  demised  to the lessees the land mentioned  in  the Schedule.  The important words in this clause were " to hold the  premises"  and not to hold the demised  premises.   The word " premises " covered both the land and the building  to be  erected thereon.  The intention of the parties was  that the premises would be held at a moderate rent of Rs. 50  per month  as  the lessees were going to incur the  expenses  of erecting  the building, maintaining it in proper repair  and paying all taxes in connection therewith.  In the course  of 21  years the lessees would have not only received back  the money  invested by them in the erection of the building  but would have also enjoyed a large margin of profit.  Under el. 5,  at  the  end  of the lease, the  premises  held  by  the lessees, would be handed over to the lessors that is to say, the land and the building erected on it without the  lessors paying  any  compensation for the  building.   Under  cl.the building was to be insured in the joint names of the lessors and the lessees.  In cl. 9 of the lease the expression  "the said  demised premises " appears and this clause  guaranteed to  the  lessees  enjoyment of peaceful  possession  of  the premises.  This clause came after all the clauses  referring to the building to be erected on the land.  If cls. 1, 5,  6 and  9 were read together and properly construed,  it  would appear  that the intention of the parties was that not  only the land demised but also the 807 building  which was to be constructed on it was the  subject of  the  lease, as that was the only purpose for  which  the land  was given on lease.  These clauses do not  necessarily lead  to the conclusion suggested.  If the ownership in  the building  was intended to be with the lessors, there was  no occasion  for  providing  that  the  lessees  would  get  no compensation  when  the  building  was  handed  over.   This provision rather suggests that the ownership in the building was  with  the lessees. Oil behalf of the  respondents  much reliance  was  placed on the decision of this Court  in  the case  of  Bhatia Cooperative Housing Society Ltd. v.  D.  C. Patel (1).  Many of the terms of the lease in the case cited were  similar to the terms to be found in the lease  in  the present  case.  There was, however, el. 18 of the  lease  in the  case referred to, which expressly stated that  immedia- tely  after the completion of the building within  the  time specified  in el. 7, the lessors of the land would grant  to the  lessees a lease of the land with the  building  thereon for  a term of 999 years from the date of the auction  at  a yearly  rent calculated in accordance with the accepted  bid for  the plot.  There could be no question, as a  matter  of interpretation,  in  the case cited, that a lease  would  be granted not only of the land but also of the building on  it for a term of 999 years from the date of the auction.  There is  no  such clause in the lease in the present  case.   The decision  upon  which  reliance had  been  placed  does  not support the case of the respondents, because in the  present case none of the clauses of the lease even remotely  suggest that  on the completion of the building on the land  demised the lease in favour of the lessees would be both of the land and the building erected thereon. On  behalf  of  the appellants, on the other  hand,  it  was submitted  that what was demised was actually the  land  and the  expression  " to hold the premises " in  cl.   I  meant nothing  more  than  to  hold  the  demised  premises.   The ownership in the building to be constructed did not pass  on

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to  the lessors under the lease.  During the subsistence  of the lease the ownership of (1) [1953] S.C.R. 185. 103 808 the  building remained with the lessees.  The  lessees  con- tracted  to hand over the building without  compensation  at the  end  of  the lease and in consideration  for  this  the lessees were being demised the land at a small rental of Rs. 50  per month.  We have examined the various clauses of  the lease  and are satisfied that not one of them,  if  properly construed, indicates that there was any contract between the parties to the effect that the building to be erected on the land  would be in the ownership of the lessors and that  the same  would  be deemed to have been demised to  the  lessees along with the land. It was next urged that even if there had been no deinise  of the  building  to be erected on the land  possession  of  it could  not  be given to the appellants until the  lease  had been  determined, which in law, could not be  determined  so long  as  the  respondents could not  be  evicted  from  the demised  land of which they were tenants within the  meaning of  the  Act.   This  contention is  without  force  as  the provisions of the Act do not provide for the continuation of a  lease  beyond the specified period stated  therein.   All that the Act does is to give to the person who continues  to remain in possession of the land, although the period of the lease had come to an end, the status of a statutory  tenant. That  is to say, although the lease had come to an  end  but the  lessee  continued to remain in possession  without  the consent of the lessor, he would none the less be a tenant of the  land and could not be evicted save as provided  by  the Act. It was then submitted that the appellants could not get  the declaration  to  the effect that they were entitled  to  the rents  and profits from the building which had been let  out to several persons by the respondents because they could not realise the same without entering upon the land on which the building  had  been constructed.  The appellants  could  not enter upon the land for the purpose of collecting the  rents without  the consent of the respondents as the  latter  were the  tenants  of the land.  They could only enter  upon  the land as provided for by the Act.  The declaration which  the appellants see]<:, however, does not ask for a 809 declaration  that they are entitled to enter upon the  land. All that it seeks is that they are entitled to the rents and profits  of the building which had been let out  to  several persons  by the respondents.  The appellants merely  seek  a declaration of their right to collect the rents and  profits from  the  building.  As to how they collect  the  same  was their  concern.   There  seems, therefore, to  be  no  valid objection  in  law  to granting the  relief  sought  by  the appellants. The original lessees were Moreshwar Kashinath and  Radhabai, wife of Ramakrishna Bhai Thakore.  Apparently, these persons were  dead and the suit was filed against defendants I to  3 as   heirs  and  legal  representatives  of   Radhabai   and defendants  4  and 5 as heirs and legal  representatives  of Moreshwar  Kashinath Thakore.  After the suit was  filed  it was discovered that defendant No. 4 could not be served with a copy of the plaint as she had died before the  institution of  the  suit.   Her name was accordingly struck  off  as  a defendant  in  the suit.  It was conceded on behalf  of  the defendants  at  the trial that the suit  filed  against  the

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defendants  on  a  cause of action could  not  be  dismissed merely   because   of   the   non-joinder   of   the   legal representatives  of defendant No. 4 who was already dead  at the institution of the suit.  In appeal, the learned  Judges were of the opinion that it was not necessary to decide this question  because, in their opinion, the suit was  bound  to fail  on  other grounds.  Whatever  other  consequences  may arise on account of the failure of the appellants to implead the  heirs and legal representatives of defendant No. 4,  it was conceded on behalf of the respondents at the trial  that the suit could not be dismissed merely because of this.   It would  have  been  better  if the  heirs  and  legal  repre- sentatives  of  defendant No. 4 had been brought on  to  the record  as  defendants.  It seems to us, however,  that  the suit  cannot be dismissed merely on this ground because  the nature of the declaration which the appellants sought  could be   granted   even  in  the  absence  of  the   heirs   and representatives  of  defendant No. 4 being  on  the  record. Though  the plaintiffs impleaded 5 persons as defendants  in the suit, the plaintiffs claimed a decree against the  first defendant 810 only  in  respect  of the rents received  by  him  from  the tenants  in  the building in question.  There  is  no  claim against the other defendants for accounts in respect of  the usufruct  of the property.  The correspondence disclosed  in the suit, which passed between the plaintiffs and the  first defendant,  showed that it was only he who was in  effective control of the building.  The suit was contested only by the first  three  defendants who appear to be brothers  and  who claim to have continued in possession of the building  after the  crucial  date,] i. e., May 22, 1948.  It  is  they  who claimed  protection under the Act.  Defendants 4 and 5,  who were  purported to be sued as representatives of one of  the joint  lessees, do not appear to have taken any interest  in the building.  After the suit, defendant No. 5 has  remained ex  parte throughout.  After the decree of the trial  court, it  is  only  the first three defendants  who  preferred  an appeal to the High Court.  From all these considerations, it appears  that  the  4th  defendant or  her  heirs  or  legal representatives were not necessary parties to the suit.  The Court  could,  therefore,  proceed with the  suit  in  their absence. The  appeal, accordingly, is allowed with  costs  throughout and  the decision of the High Court in appeal is set  aside. The  appellants  are  entitled to  a  declaration  that  the building  constructed on the land demised under  the  lease, Ext.  A, belongs to the Mankeshwar Temple Trust and the -aid trust is entitled to recover all the rents and profits  from the,  same  and  the respondents have no  right,  title  and interest  therein  since the expiration of the  said  lease. The first respondent is directed to render an account of the rents received by him from the tenants of the building  from 23-5-48  and to pay to the appellants the amount found  due, after accounting, with interest at 6% per annum from 23-5-48 until  payment.   There  will  be  an  order  of  injunction restraining the respondents, their agents and servants  from interfering with the collection of rents and profits by  the appellants from the tenants of the aforesaid building. Appeal allowed, 811