http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 13  

PETITIONER: LARSEN & TOUBRO LTD. CLUB HOUSE ROAD, MADRAS

       Vs.

RESPONDENT: TRUSTEES OF DHARMAMURTHY, RAO BAHADURCALAVALA CUNNAN, CHETTY

DATE OF JUDGMENT31/08/1988

BENCH: RANGNATHAN, S. BENCH: RANGNATHAN, S. MUKHARJI, SABYASACHI (J)

CITATION:  1988 SCR  Supl. (2) 755  1988 SCC  (4) 260  JT 1988 (3)   684        1988 SCALE  (2)605

ACT:     Tamil  Nadu  City Tenant’s Protection Act  (No.  111  of 1922)-Whether the lessee-Company was entitled to  protection under  section 9-Of-In eviction proceedings-Construction  of the lease deed.

HEADNOTE:    In  this appeal by special leave, the dispute arose  out of a lease by a charitable trust in favour of a company. The respondent-Trust Bled a  for possession of a property  taken on  lease  from it by the appellant-company.  The  appellant responded by filing an application claiming protection under section  9  of the Tamil Nadu City Tenant’s  Protection  Act (the ‘Act’). The application was accepted by the trial court which  held that the company was entitled to the benefit  of the Act and appointed a Commissioner to inspect the property and  fix the minimum extent of the property required by  the defendant  for convenient enjoyment of  the  super-structure which  it would be entitled to purchase in terms of  section 9.    The trustees filed an appeal, contending that the company was not entitled to the protection of section 9. The  appeal was  allowed.  The  company preferred  a  revision  petition before the High Court, which dismissed it, holding that  the application   of  the  company  under  section  9  was   not maintainable. The company appealed to this Court,     Dismissing the appeal, the Court,     HELD:  The short question to be decided was whether  the company  was entitled to the protection under section  9  of the Act. This piece of legislation was enacted primarily for the  protection of small tenants, who in  certain  municipal towns  and  adjoining  areas had  constructed  buildings  on others’  lands,  by ensuring that they were not  evicted  so long  as they paid a fair rent for the lease. The  Act  also contained  a  provision whereunder a tenant could put  up  a claim  to  purchase  the land in question  from  the  owner. [758C]                                                   PG NO 755                                                   PG NO 756     The  Act  applies  only to tenants in  respect  of  land situated in certain areas where the tenancy has been created before  a  prescribed date. The only  controversy  here  was

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 13  

whether the lease in question could be said to be a lease of ‘land’.  Before a right of purchase can be  exercised  under section  9,  the  tenant  must be  a  tenant  of  land,  not comprising buildings or lands appurtenant thereto. The  High Court had held that there had been a lease not of the vacant land but of a building with the land appurtenant thereto and the provisions of the Act would not apply. [764E, F-G; 765F- G]     The  case involved construction of the lease  deed.  The language  employed in the lease-deed only showed  that  both land  and building were leased. Whether the land was  to  he treated  as  an  appurtenant or not would  depend  upon  the extent  and nature of the land and its  situation  vis-a-vis the  building  thereon  and not on whether  the  lease  deed described   the  subject-matter  as  ‘call  that  land   and building"  or  Vice  Versa. If the deed  had  described  the demised  premises as ‘building and appurtenant  land’.  that would  have  helped  in ascertaining the  intention  of  the parties but even that would not have been conclusive. [766E- G]     The  question whether a certain land is  appurtenant  or not  is  one  of fact. There was no reason  to  disturb  the finding of the first appellate Court and the High Court that the  land  was appurtenant to the building. The use  of  the land,  in the circumstances of the case, was  incidental  to the enjoyment and beneficial use of the building. [768B-d]     The clauses of the lease deed could not be construed  as consisting of two separate leases, one, of the building  and the  other, of the land, as suggested by the lessees.  There were  clear  indications  in the lease deed that  it  was  a single,  indivisible  lease  of both the  building  and  the vacant  land. It was impossible to consider the document  as comprising  two  leases.  It  was a  composite  lease  of  a building  with  appurtenant land, sad having regard  to  the definitions  contained  in  the  Act,  the  Lessee  was  not entitled  to the rights conferred by section 3 or section  9 of the Act. [769D; 770F]     Whether  the  Act  applied  to  the  lease  or  not  was something  which  had to be considered on the terms  of  the lease deed, having regard to the nature of the property. The clause  regarding  removal of the structures is  the  normal clause  that  occurs  in the leases under  the  Transfer  of Property  Act.  The clause in this case made no  mention  of compensation  and  only  talked of the  lessees’   right  to remove structures. Even if no such clause had been inserted, that  would  have  been  the position in  law.  It  was  not                                                   PG NO 757 possible  to  infer from such a natural clause that  it  had been  put  in  with a view to denying  compensation  to  the lessee and getting over the hurdle of the lessee putting  in a  claim for acquiring the property by purchase.  The  lease deed  was a simple lease deed containing the  usual  clauses and  covenants  expected  in it and  nothing  more.  If  the parties had been conscious of the possibility of the  lessee claiming  any rights under the Act, the lessors  would  have tried to safeguard themselves by making clear that what  was let out was only a building and the appurtenant land. [771C- F]     The appeal was dismissed.     Maharaja  Singh v. State of U. P., [1977] 7 S.C.C.  l55r referred to.

JUDGMENT:

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 13  

   CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 3095  of 1988.     From  the Judgment and Order dated 1.4.87 of the  Madras High Court in C. R.P. No. 370/87.     T.S.   Krishnamurthy   Iyer,   V.   Krishnamurthy,    V. Balachandran and V. Ramamoorthy for the Appellant.     Shanti  Bhushan, S. Rangarajan, and Sanjay  Prakash  for the Respondent.     The Judgment of the Court was delivered by     RANGANATHAN, J. 1. After having heard learned counsel on both sides, we grant special leave and proceed to dispose of the appeal itself by this order, the point involved being  a very short one.     2.  Real  estate  prices  all  over  the  country,   and particularly in important capital cities, have spiralled  up in  the last few decades to such heights that disputes  over land, which at one time could have been resolved by a little give  and  take  between the parties  have  now  assumed   a magnitude   which   makes   any   type   of   reconciliation impossible.. In this case, where that dispute arises out  of a lease by a prominent charitable trust in Madras in  favour of  a  well-established  engineering  company  of  all-India stature,  we  were somewhat hopeful that the  parties  would agree not to waste further time and energy in litigation but would come to some reasonable compromise. We tried our  best by  adjourning the case several times  and  encouraging  the parties  to come up with various proposals  for  compromise.                                                   PG NO 758 Ultimately,   however, we found that it was not possible  to bring  the  parties  together. We,  there-fore,  proceed  to dispose of the issues raised in the appeal.     On.  13.8.  1951, M/s. Larsen &  Toubro.  the  appellant company,  took  on  lease from  the  respondent  trustees  a property situated in a busy central locality of the city  of Madras.  In 1975, the trustees filed a suit for  possession. The  appellant  company respondent  by  claiming  protection under  Section 9 of the Tamil Nadu City Tenants’  Protection Act  (No.  111  of 1922) (hereinafter  referred  to  as  the ‘Act’).  The  short question that arises in  the  appeal  is whether  the  company is entitled to  this  protection.  The above  piece  of legislation was enacted primarily  for  the protection of small tenants, who in certain municipal  towns and  adjoining  areas had constructed buildings  on  others’ lands, by ensuring that they are not evicted so long as they pay  a  fair  rent for the land. The Act  also  contained  a provision  under which the tenant could put forward a  claim to  purchase  the  land in question from the  owner  at  its average  market  value of the  three  immediately  preceding years. It is highly doubtful whether the Act was intended to enable  affluent persons or prosperous companies,  like  the present  appellant, to take advantage of its  provisions  to compel a lessor to Sell to them property of which they  have obtained   initial  possession  as  lessees.  However,   the question   has   to   be  decided  not   on   such   general considerations but on the language of the statute itself and so we proceed to discuss the issue involved.     It  is  first necessary to advert to the  terms  of  the lease deed.     By  the  lease  deed  dated   13.8.  1951,  the  lessors (trustees) purported to demise to the lessee (company)  "all that  plot of vacant land and the buildings erected  thereon and  more particularly described in the schedule hereto  and delineated  in  the  plan hereto annexed  and  measuring  17 grounds  and  321 sq. ft. or thereabouts". The term  of  the lease  was  21  years  from  the  date  of  the  lease.  The

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 13  

consideration  was  "a  monthly  rent  of  Rs.900  for   the aforesaid  land  and  a  monthly  rent  of  Rs.350  for  the aforesaid  buildings  aggregating  in all  to  Rs.1,250  per month" and the other conditions and covenants set out in the deed. Paras I or II of the lease deed set out the following, among other,Covenants between the parties:     (a)  The lessee was to pay, and had paid, an advance  of Rs.15,000  to the lessor refundable without interest on  the termination of the lease ;                                                   PG NO 759     (b)  the lessee was to pay the rent  reserved  regularly whether or not any buildings were erected by the lessees  on the  demised  land and irrespective of whether the  land  or the buildings were of use to them for the purposes for which they were taken on lease ;     xxx                     xxx                    xxx     (e)  the  lessee was to comply with  all  municipal  and local  regulations  "in the erection and completion  of  any buildings on the demised plot."     (f)  the  lessors were to pay the property tax  for  the existing  demised building but the lessees were to  pay  all taxes, rates etc. chargeable in respect of any buildings  to be erected by the lessees on the demised plot ;     xxx                     xxx                    xxx     (h)  if and when the lessees sublet the demised land  or any part thereof or the demised buildings or any portion  or portions  thereof at any higher rental and  the  Corporation authorities  levy  a  property tax on the  demised  land  or buildings higher than that based on a monthly rent of Rs.950 and  Rs.300 respectively, the lessees shall pay such  excess tax, if any, to the lessors.     xxx                     xxx                    xxx     (j)  the lessees were to enjoy the demised  land  during the  term of the lease but surrender "the demised  land  and the buildings" to the lessors at the termination of the lease     xxx                     xxx                     xxx     (m)  the  lessees during the subsistence of  the  lease, were  to renovate, at their own cost, the demised  buildings or any portion or portions thereof and carry out and  effect all   repairs  considered  necessary  for  their   use   and habitation.     Under Para  III of the lease deed, it was agreed between the parties, inter alia:     (a)  that in case of any default in the payment of  rent or  any  breach  of the covenant between  the  parties,  the lessor  could "re-enter upon the demised plot and  buildings                                                   PG NO 760 or  upon  any  part thereof in the name of  the  whole"  and determine the lease ;     (b)  that, in case the lessee fulfilled his  obligations under  the  lease and gave six months’ prior notice  of  his desire  to obtain a renewal of the lease, the lessors  shall grant a renewal lease of the demised plot and building for a further period of 21 years ;     (c) if during the subsistence of this lease, the lessors get an offer (for) the purchase of the demised plot of  land or  the buildings or both from third parties at a  valuation acceptable to the lessors they shall intimate such offers to the  lessees and give them the option of buying the  demised plot and buildings at such valuation and if within two weeks of  receipts of such intimation to the lessees they  do  not send a reply to the lessors expressing their consent to  buy at  such valuation and do not further pay to the  lessors  a deposit or earnest money towards the intended purchase,  the lessors  shall be entitled to sell the demised plot of  land

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 13  

or  buildings to such third parties for the price for  which it  was  offered to the said lessees and any  such  sale  to third  parties  shall  be only subject to  this  lease.  The lessees  shall  (be) in the event of their purchase  of  the demised  plot  and  buildings themselves pay  and  bear  the stamp, registration and all other charges incidental to  the deed of conveyance.     The  schedule  to the lease deed described  the  demised property  as  "all that piece or parcel of land  marked  ’J’ washed  in  yellow colour in the plan  hereto  stitched  and measuring  17  grounds  32 I sq.  ft.  or  there-abouts  and forming  part  of the entire piece or parcel  of  land  with bungalow  known  as  ‘Club  Chambers’  and  bearing  No.  1, Patullo’s Road and No. 5, Club House Road . . . . ."     To turn now to the statute, the relevant provisions  are not  many  and may next be set out. The Act came into  force in  1922.S.1 applies the Act only to "tenancies of land"  in certain  towns  and  their adjoining  areas  in  Tamil  Nadu created  before  a particular date but there is  no  dispute that  it does apply. within the city of Madras and that  the lease  deed  in the instant case is prior to  the  specified date.  S.  2  contains  the  definitions  of  which  we  are concerned only with the following.     (1)  "  ‘Building’  means any building,  hut   or  other structure whether of masonry, bricks. wood, mud or metal  or any other material whatsoever used-                                                   PG NO 761     (i)  for residential or non-residential purposes in  the City of Madras . . . . . .  .     (ii)  for residential purposes only, in any other  area; and includes the appurtenance thereto."     (2) "Land" does not include buildings.     (4) ’Tenant’ in relation to any-     (i) means a person liable to pay rent in respect of such land, under a tenancy agreement express or implied, and     (ii) includes-     (a) any such person as is referred to in sub-clause  (i) who   continues  in  possession  of  the  land   after   the determination of the tenancy agreement,     (b) any person who was a tenant in respect of such  land under  a tenancy agreement to which this Act  is  applicable under  sub-section  (3) of section 1 and who or any  of  his predecessors  in interest had erected any building  on  such land and who continues in actual physical possession of such land and building, notwithstanding that-     (1)  such  person was not entitled to the  rights  under this Act by reason of the proviso to section 13 of this  Act as it stood before the date of the publication of the Madras City  Tenants’ Protection (Amendment) Act, 1972 (Tamil  Nadu Act 4 of 1972), or     (2) a decree for declaration or a decree or an order for possession  or  for similar relief has been  passed  against such  person  on  the ground that  the  proviso  to  section 12  of  this  Act  as  it  stood  before  the  date  of  the publication   of   the  Madras  City   Tenants’   Protection (Amendment), Act [Tamil Nadu Act 4 of 1972) disentitled such person from claiming the rights under this Act. and     (c)  the heirs of any such person as is referred  to  in                                                    PG NO 762 sub-clause  (i) or sub-clause (ii)(a) or (ii)(b);  but  does not include a sub-tenant or his heirs.     Section  3 entitles every tenant "’on ejectment"  to  be paid  compensation for the value of any building  which  may have  been  erected by him, by any of  his  predecessors  in interest, or by any person not in occupation at the time  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 13  

ejectment  who derived title from either of them. Section  4 requires the Court in a suit for ejectment against a  tenant in  which the landlord succeeds to determine the  amount  of compensation payable under Section 3 and direct the landlord to pay the same within a time to be specified, in default of which  the suit will stand dismissed and  landlord  debarred from instituting a fresh suit for ejectment or presenting  a fresh  suit for recovery of possession for a period of  five years.  Sections  7 and 7-A enable the landlord  and  tenant respectively to apply to the court to fix a reasonable  rent for  the occupation of the land and section 8 provides  that the  tenant shall not be liable to eviction for a period  of five years from the date of fixation of fair rent. Section 9 confers a valuable right on the tenant. It reads, in so  far as it is relevant for our purpose, as follows:     "9  [1]  [a]  [i]  :  Any  tenant  who  is  entitled  to compensation  under  section 3 and against whom  a  suit  in ejectment  has  been instituted ..... may within  one  month after the service on him of summons, apply to the court  for an  order that the landlord shall be directed to sell for  a price  to  be fixed by the court, the whole or part  of  the extent of land specified in the application.        XXX                   XXX                   XXX     (b)  On such application, the court shall first  decided the  minimum extent of the land which may be  necessary  for the convenient enjoyment by the tenant. The Court shall then fix  the price of the minimum extent of the land decided  as aforesaid  or  of the extent of the land  specified  in  the application  under cause (a), whichever is less.  The  price aforesaid  shall  be the average market value of  the  three years immediately preceding the date of the order. The court shall  order  that within a period to be determined  by  the court,  not being less than three months and not  more  than three years from the date of the order, the tenant shall pay into  court or otherwise as directed the price so  fixed  in one or more instalments with or without interest.                                                    PG NO 763     (2)  In  default  of payment by the tenant  of  any  one instalment, the application under clause (a) of  sub-section (1) shall stand dismissed, provided that on sufficient cause being  shown, the court may excuse the delay and  pass  such orders as it may think fit, but not so as to extend the time for  payment beyond the three years above mentioned. On  the application  being  dismissed,  the court  shall  order  the amount of the instalment or instalments, if any, paid by the tenant to be repaid to him without any interest.     (3)(a) On payment of the price fixed under clause (b) of sub-section (1), the court shall pass an order directing the conveyance  by the landlord to the tenant of the  extent  of land for which the said price was fixed. The court shall  by the  same order direct the tenant to put the  landlord  into possession of the remaining extent of the land, if any.  The stamp   duty  and  registration  fee  in  respect  of   such conveyance shall be borne by the tenant.     [b]  On the order referred to in clause (a) being  made, the suit . . . . . shall stand dismissed, and any decree  or order  in  ejectment that may have been passed  therein  but which has not been executed shall be vacated.          XXX                   XXX                  XXX Section  11 provides for a notice offering  compensation  in terms  of  the Act before any suit for  ejectment  could  be filed against a tenant. Section 12 is of some relevance  and needs to be set out:     "Nothing  in  any contract made by a tenant  shall  take away or limits his rights under this Act.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 13  

   Provided that nothing herein contained shall affect  any stipulations made by the tenant in writing registered as  to the  erection  of  buildings, in so far as  they  relate  to buildings erected after the date of the contract."     The   proviso,  however,  was  deleted   with   complete retrospective effect by an Amendment Act of 1972.     When  the  trustees filed the suit  for  ejectment,  the company,  as already stated, filed Application No.  1541  of 1976  under  Section  9 of  the Act.  This  application  was                                                    PG NO 764 accepted  by  the  trial  court.  The  court  negatived  the company’s  contention that it had exercised its  option  for the  renewal of the lease for the period beyond the  initial period of 21 years. However, it was of the opinion that  the company was entitled to the benefit of the Act and appointed a commissioner to inspect the property, find out the  market value  of  the property and fix the minimum  extent  of  the property required by the defendant for convenient  enjoyment of  the  super-structure  which  it  would  be  entitled  to purchase in terms of Section 9.     The  trustees filed an appeal. They contended  that  the lease  in favour of the company was that of a building  with appurtenant land and that, therefore, the respondent was not entitled to the protection of section 9 of the Act and that, therefore, the application filed by the company should  have been  dismissed.  The  appeal  was  allowed.  The   company, thereupon,  preferred  a revision petition before  the  High Court.  The Iearned Judge examined closely the terms of  the lease  deed between the parties, discussed  certain  earlier decision of the Court and concluded that the first appellate court was right in holding that the lease was of a  building and not of land and that, therefore, the application of  the company under Section 9 was not maintainable. He, therefore, dismissed the revision petition. Hence the present appeal.     From the statutory provisions set cut above, it will  be seen that the Act applies only to tenants in respect of land situated in certain areas where the tenancy has been created before  a  prescribed  date. The only  controversy  here  is whether  the lease in question can be said to be a lease  of ‘land’.  S.  2(2)  which  purports  in  define  ’land’  only clarifies  that  ’land’ does not include  ’building’.  ’This takes  us  therefore to the definition of ’building’  in  s. 2(1) which expression means any structure whatever put up on land  ’and  includes the appurtenance thereto’.  From  these definitions  It  will  be  clear that,  before  a  right  of purchase can be exercised  under Section 9$, the tenant must be  a tenant of land, not comprising of buildings  or  lands appurtenant thereto. In the present case, the High Court has observed as follows:     "If a land with a building is leased out, then T..N. Act III of 1972 would have no applicability to such a  property. (That) there was a palatial building over the property could not be disputed because the property originally belonged  to a  notable  dignitary  in yester years, who  lived  in  that building  with  a spacious compound all round  the  property (and)  which  was  enjoyed as an  appurtenant  area  to  the building PWl had stated that the plinth area of the building                                                    PG NO 765      XXX                   XXX                      XXX was  about  5,285  sq.  feet.  In  para  7  of  the  written statement, defendants stated that the vacant site covered by the lease deed was about 35,830 which is equal to 14 grounds and  323  sq.  feet. Under the lease deed,  the  total  area leased  out  was  17 grounds and 321  sq.  feet.  Hence  the building  had occupied an area of nearly two grounds,  which

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 13  

would  be roughly about one eighth of the total area.  Hence it was not a tiny insignificant structure, but a substantial building which was used as a residential building by a  very affluent  person, and which had been later on given  to  the charity, on a will executed by him. Under the Act, if  there is a structure built with mud or any other material of  even a tiny dimension, it would be a building for the purpose  of the  Act as defined in section 2(1); and section 3(2)  being explicit that land does not include building, the provisions of the Act could be availed of by the tenant only if he  had taken vacant land on lease.          XXX                   XXX                   XXX     In  the  instant case a substantial building  which  had occupied  one  eighth  of  the area  leased  out  cannot  be overlooked  particularly  when the area was  enjoyed  us  an appurtenant area for that building. Once a superstructure of such  dimension had existed, it will be impossible to  apply the  provisions  of Act III of 1922 and hold that  only  the land had been taken on lease by defendant.                                          (underlining ours) In other words, the High Court came to the conclusion  that, in  the present case, there had been a lease, not of  vacant land but of a building with the land appertunant thereto and that, therefore, the provisions of the Act would not apply.     Learned  counsel  for the appellant  attacks  the  above finding  on two grounds. ln the first place, he  points  out that  under the terms of the lease deed what was leased  out was"  .  . . . . plot of vacant land  and  building  erected thereon".  This  is  the description given  of  the  subject matter  of the lease both in the preamble as well as in  the Schedule. He, therefore, submits that the subject matter  of the  lease was a piece of  vacant land on some  portion   of                                                    PG NO 766 which  there  were  buildings  and not of  a  building  with appurtenant  land.  The second submission is that  when  the definition of ’building’ talks to appurtenant land, what  it refers  to is only such an extent of land as  is  absolutely necessary for the necessary and convenient enjoyment of  the building in question. Pointing out that the building in  the present  case occupied barely an eighth of the area  of  the entire  plot  of land which was the subject  matter  of  the lease, he contends that the land covered by the lease cannot be  said  to be appurtenant land. In this  context,  learned counsel relies on the definition of ‘appurtenant’ in Black’s Law  Dictionary  (Special  Deluxe, Fifth  Edition)  page  94 which, in so far as is relevant, reads as follows:     "Appurtenant:  belonging to; accessory or  incident  to; adjunct, appeanded, or annexed to; answering to  accessorium in  civil  law.  Employed  in  leases  for  the  purpose  of including  any easments or servitudes used or  enjoyed  with the demised premises. A thing is ’appurtenant’ to  something else  when  it  stands  in relation  of  an  incident  to  a principal  and  is necessarily connected with  the  use  and enjoyment of the latter. A thing is deemed to be  incidental or  appurtenant  to land when it is by right used  with  the land  for  its benefit, as in the case of a way,  or  water- course,  or  of  a passage for light, air or  heat  from  or across the land of another."     In  our opinion, the contentions of the learned  counsel cannot  be  accepted.  So far as  the  first  contention  is concerned,  we  do not think that the language  employed  is conclusive  on the  issue. It only shows that both land  and building  were leased. Whether the land is to be treated  as an  appurtenant  or  not would depend upon  the  extent  and nature of the land and its situation vis-a-vis the  building

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 13  

thereon  and  not on whether the lease  deed  describes  the subject  matter  as  "all that land and  building"  or  vice versa.  Perhaps,  if  the deed  had  described  the  demised premises as ’building and appurtenant land’ that would  have helped in ascertaining the intention of the parties but even that would not have been conclusive.     On the second question, we may point out that this Court had  occasion  to  consider at length  the  meaning  of  the expression  ’appurtenant to building’ in Maharaja  Singh  v. State  of  U.P., [1977] 7 SCC 155. There  the  question  was whether the land on which a cattle fair was being held could be  said to be appurtenant to the building situated  on  the land. This Court observed :                                                    PG NO 767     "The heated debate at the bar on this and allied aspects need  not detain us further also because of our  concurrence with the second contention of the Solicitor General that the large  open space cannot be regarded as appurtenant  to  the terraces,  stands and structures.  What is integral  is  not necessarily   appurtenant.  A  position  of   subordination, something incidental or ancillary or dependant is implied in appurtenance.   Can  we  say  that  the  Iarge  spaces   are subsidiary  or  ancillary to or inevitably  implies  in  the enjoyment of the buildings qua buildings? That much of space required  for  the use of the structures as  such  has  been excluded  by the High Court itself. Beyond that may  or  may not  be  necessary  for  the hat or mela  but  not  for  the enjoyment  of  the chabutras as such. A  hundred  acres  may spread  out in front of a clubhouse for various  games  like golf.  But all these abundant acres are unnecessary for  not incidental  to the enjoyment of the house in any  reasonable manner.  lt is confusion to miss the distinction,  fine  but real.     "Appurtenant",  in  relation  to a  dwelling,  or  to  a school,  college  includes all land occupied  therewith  and used  for the purposes thereof [Words and  Phrases   Legally Defined-Butterworths, 2nd EDM.     The  word  ’appurtenances’ has a distinct  and  definite meaning  . . . . . Prima facie it imports nothing more  than what  is strictly appertaining to the subject matter of  the devise  or  grant, and which would, in truth,  pass  without being  specially mentioned. Ordinarily, what is  necessarily for  the enjoyment and has been used for the purpose of  the building,  such  as easements, alone  will  be  appurtenant. Therefore,  what  is  necessary for  the  enjoyment  of  the building is alone covered by the expression  ’appurtenance’. If  some other purpose was being fulfilled by  the  building and  the  Iands, it is not possible to  contend  that  these lands are covered by the expression "appurtenances".  Indeed it  is settled by the earliest authority,  repeated  without contradiction to the latest, that land cannot be appurtenant to   land.  The  word  ’appurtenances’  includes   all   the incorporal  hereditaments  attached to the land  granted  of demised,  such as rights of way, of common ... but  it  does not  include lands in addition to that granted’  (Words  and Phrases, supra].                                                    PG NO 768     In short, the touchstone of ‘appurtenance’ is dependence of  the building on what appertains to it for its use  as  a building.  The law thus leads to the clear  conclusion  that even if the buildings were used and enjoyed in the past with the  whole  stretch of vacant space for a hat or  mela,  the land is not-appurtenant to the principal subject granted  by Section 9, viz., buildings".     The   question,  therefore,  whether  certain  land   is

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 13  

appurtenant  or  not  is one of fact.  The  High  Court  has applied its mind to the nature of the building as well as to the  terms of the lease deed. It has kept in mind  that  the lease  relates to a period about 35 years ago, a  time  when residential  houses  occupied large extents of  land.  There used  to  be a building in the middle surrounded by  a  vast area covered by garden, arbor, trees and the like. The lease also  describes  the  building as  "Club  Chambers"  with  a municipal door number. The building is itself a  substantial one  occupying as many as two grounds. Having regard to  the position pertaining at the time when the lease was executed, the  first  appellate  court  and High  Court  came  to  the conclusion that the land in this case was appurtenant to the building.  We see no reason to disturb this finding. On  the other  hand,  we  agree that the use of  the  land,  in  the circumstances of this case, was incidental to the  enjoyment and beneficial use of the building and, therefore,  squarely fell within the definition which has been discussed above.     It  was  then  contended  for  the  appellant,  in   the alternative, that the lease deed in the present case  should be  treated  as  creating two separate leases,  one  of  the building and the other of the land and that, viewed in  this light,  the appellant would be entitled to  exercise  rights under  the  Act  atleast in respect of the  portion  of  the demised   premises  which  comprised  of  vacant  land.   To substantiate  this   contention,  Iearned  counsel  for  the appellant  relied  upon the following clauses in  the  lease deed:     1.  The  divisibility of the clauses in para  I  of  the lease  deed into two sets: clauses (b), (d), (e) and (g)  as pertaining  to the land and clauses (f), (m), (n).  (o)  and (p) as pertaining, to the building;     2.   The stipulation of separate rents for the land  and the building,     3.  The  presence  of  clauses  clearly  envisaging  and implying  that  the  lessee could put up  buildings  on  the vacant  portions  of the land and even  providing  that  the lessee  would be liable to pay taxes etc. in respect of  the buildings to be so erected ;     4.  The  provision that the lessee that the  sublet  the demised  land  or building or any part  or  portion  thereof                                                    PG NO 769 subject  only  to its being liable for any extra  burden  of municipal   tax  that  may  fall  on  the  landlord   as   a consequence;     5.  The covenant that, if during the subsistence of  the lease,  the  lessors got an offer for the  purchase  of  the demised  plot  of land or the buildings or both  from  third parties  the  lessee  should  be given  a  first  option  to purchase  at  the  price offered.  Relying  upon  the  above features,  it  was contended that the lease deed  does  deal with  the land and building separately. Separate rents  were provided  for;  the  lessees  were given  right  to  put  up structures and, if necessary, even let them out; the sale or disposal  of  various  parts of the  land  or  the  building separately  was  envisaged. It  was,  therefore,  vehemently contended  that  the  lease  deed  should  be  construed  as consisting of two leases, one in respect of the vacant  land and one in respect of the building rolled into one.     We  are unable to accept this contention. We agree  with the  conclusion of the High Court that these clauses of  the lease deed cannot to be construed in the manner suggested by the  lessees. There are clear indications in the lease  deed that  it  is  a single lease of both the  building  and  the vacant land. They are jointly referred to in the lease deed.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 13  

There  are  various passages in the lease deed where  it  is referred to as "the lease" i.e. a single indivisible  lease. The  rent payable is specified as an aggregate  of Rs. 1,250 per  month  and a consolidated advance of one year  rent  is payable  under the lease deed. The lease is for a period  of 21  years with an option to the lessee to renew it  for  the same   period.  The  lease  deed  does  not   envisage   the termination or renewal of the lease in respect of a part  of the leased premises. The lease of the building alone  cannot be renewed without a renewal of lease in respect of the land or  vice  versa. The deed contemplates  the  termination  of lease  at  one  point  of time whereat  the  lessee  has  to surrender  the possession with liberty to remove  any  super structures  it might have put up there. The re-entry  clause also provides a right to re-entry in respect of the  demised premises as such in the event of any non payment of rent  or breach   of  the  stipulations.  Also.  physically,  it   is impossible  to  consider the document as comprising  of  two leases  because the extent of land which has to go with  the building  as appurtenance-for some part of the land  atleast is  clearly  and necessarily appurtenant-and the  extent  of land  which can be treated as separately demised  cannot  be defined.  No  seperate lease of land can be  read  into  the document  without a proper specification and delineation  of the  extent  of  land  that is to be  comprised  in  such  a separate lease.                                                     PG NO 770     The clauses on which reliance has been placed on  behalf of  the  appellant,  in  our opinion, do  not  lead  to  the inference  suggested  by the appellant. The High  Court  has pointed out that the rent for the property was Rs. 1,250 and that the bifurcation thereof into Rs.900 and Rs.350 had been introduced only with a limited purpose in view. The landlord wanted  to,  protect  himself  against  the  possibility  of demands of high municipaL takes being made against him as  a result  of the Iessees putting up structures on the land  or letting  out parts of the property at high rent$. So far  as the  other clauses are concerned, as rightly pointed out  by the  learned counsel for the respondents they are  just  the usual  clauses  which find a place in a lease  of  immovable property.  They are merely permissive in nature  and  enable the  Iessee  to  deal with the land, during  the  period  of demise, to the best advantage without affecting the lessor’s interests. There was a substantial building existing on  the land.  There  is no material to indicate that this  was  not sufficient for the purposes for which the building was taken on  lease  by  the  appellant.  However,  in  case  it   was considered necessary to put up further structures, the lease deed  permits  the  lessee to do so  subject  to  safeguards against  higher tax and compensation and with a  stipulation that  this should be removed at the time of  termination  of the  lease.  So  far as the clause  pertaining  to  sale  is concerned,   again,  it  merely  provides  for  a   possible eventuality. The execution of a lease deed does not  prevent the  lessor from disposing of the property, in whole  or  in part, subject to the lessees’ leasehold rights therein.  The clause  only provides that, in case the landlord decided  to exercise  this right, he should give a right of  pre-emption to  the  lessee.  Thus all these are  merely  clauses  which provide  against  the various contingencies that  may  occur during the period of the lease which may go up to 42  years. It  is  not possible to infer from these  clauses  that  the parties had entered into two separate transactions of lease, though  incorporated in a single document. In  our  opinion, this  was a composite lease, as we have already said,  of  a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 13  

building  with  appurtenant land and having  regard  to  the definitions contained in the Act, the lessee is not entitled to  the  rights conferred by section 3 or section 9  of  the Act.     Before we conclude, we might refer to one more  argument addressed on behalf of the appellant. Counsel submitted that the  lease deed itself contains a clear indication that  the parties were fully conscious that the transaction was liable to be hit by the provisions of the Act. He pointed out that, when the lease deed was executed in 1951, section 12 of  the Act  contained  a proviso (which has been  extracted  by  us earlier).  That proviso saved any stipulations  between  the parties  regarding buildings erected after the date  of  the contract.  Learned counsel for the appellant urged that  the                                                    PG NO 771 clause  I  (j)  in the lease  deed  which,  by  implication, disentitles  the  lessee to payment of any  compensation  in respect  of  structures at the time of  termination  of  the lease  was specifically put in to exclude the  applicability of  the Act. For, both parties were conscious that  the  Act would be applicable to the transaction and realised that, if such a clause were not specifically put in, the lessee would be entitled to such compensation and hence to the protection of  the  Act.  Unfortunately,  learned  counsel  urged,  the proviso  was dropped with retrospective effect.  The  result was  that, despite the above clause in the lease  deed,  the lessor  has  become liable to pay  the  lessee  compensation under   section  3  thus  conferring  on  the   latter   the correlative  right of exercising an option to  purchase  the property  under section 9. In our opinion, this argument  is far-fetched.  Whether  the  Act  applies  to  the  lease  in question  or not is something which has to be considered  on the terms of the lease deed, having regard to the nature  of the  property.  On  this  we  have  already  expressed   our conclusion.  The clause regarding removal of  structures  is the  normal clause that occurs in leases under the  Transfer of  Property  Act.  There may have been some  force  in  the argument  at least if there had been a  clause  specifically stating that the lessee will not be entitled to compensation for  his  structures. The clause here makes  no  mention  of compensation and only talks of the lessees’ right to  remove structures. Even if no such clauses had been inserted,  that would  have been the position in law. it is not possible  to infer  from such a neutral clause that it was put in with  a view  to deny compensation to the lessee and thus  get  over the hurdle of the assessee putting in a claim for  acquiring the  property by purchase. lt is clear that the  lease  deed between  the parties is a simple lease deed  containing  the usual  clauses  and  covenants that one expects  in  it  and nothig  more. lf, indeed, the parties had been conscious  of the possibility of the lessee claiming any rights under  the Act, the lessors would have tried to safeguard themselves by making  it  clear  that what was being let out  was  only  a building  and appurtenant land. We, therefore, do not  think that  there is much force in this submission of the  learned counsel for the appellant.     As  the  view  we  have taken is  entirely  based  on  a construction of the lease deed before us, we do not consider it necessary to refer to the various decisions discussed  by the High Court in its judgment.     In  the result, this appeal fails and is dismissed.  The respondents will be entitled to their costs. S.L.                                    Appeal dismissed.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 13