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PETITIONER: OSMAN FAKIR MOHAMMED DIVECHA

       Vs.

RESPONDENT: ALl AKBAR JAVED SADAKYA & ANR.

DATE OF JUDGMENT: 28/08/1969

BENCH: SHELAT, J.M. BENCH: SHELAT, J.M. VAIDYIALINGAM, C.A. DUA, I.D.

CITATION:  1970 AIR 1893            1970 SCR  (2) 118  1969 SCC  (2) 623

ACT: Bombay Rents Hotel and Lodging House Rates Control Act, 1947 (57 of 1947)-Part II, Sections 6( 1 ), 18 ( 1 )-Premises let for   construction  of  "buildings  of   every   description howsoever"-If   premises  let  for  purposes  in  s.   6(1)- Applicability of s. 18.

HEADNOTE: Certain  non-agricultural lands in Bombay suburban  district were  let  out  to the appellants by  their  owner.   By  an indenture  of  lease  the owner demised  the  lands  to  the respondents.   The  lease  deed empowered   the  lessees  to construct  upon  the lands "buildings of  every  description howsoever".   It  prohibited the  lessees  from  mortgaging, assigning  or  creating any charge on the lands  or  on  the buildings  that  they  may  choose  to  erect  thereon,  but provided that the lessees could take construction loans from prospective tenants of such buildings.  There was a  further stipulation that the lessees should pay the lessor a certain sum  as  advance for the observance and performance  of  the covenants  of  the deed and the amount was to  be  deducted’ from the rent payable.  The respondents filed suits under s. 13(1)  of  the Bombay Rents, Hotel and Lodging  House  Rates Control  Act,  1947, for eviction of the appellant  and  for recovery of possession of the lands.  The appellant resisted the  suits  on  the ground that part  of  the  consideration payable under the lease was prohibited under s. 18(1) of the Act.  that  the lease was, therefore, illegal and  void  and could not be the basis for the respondents’ right to recover possession  under s. 13(1). The lower courts  rejected  this contention. On the question whether the lease attracted section 18(1) of the Act, HELD: Section 18(1) had no application. [121 A--B]     Part II of the Act which contains s. 18, applies only to premises "let for" the purposes mentioned in s. 6(1) namely. "residence,   education, business trade or storage."  It  is the  purpose  of the lease and not any future  choice  of  a lessee which determines the application of Part 11. That  is the clear and obvious meaning  of the  words  "let  for"  in

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s.  6(1). [121 A-B, D; 122 B]     In the present case the purpose for which the lands were demised  clearly  was  for constructing  "buildings  of  any description  howsoever" and not for  constructing  buildings for  "residence,  education, business,  trade  or  storage." within  the  meaning of s. 6(1).  Because s.  18(3)  permits construction loans in respect of residential buildings  only and  the  lease  deed provided for  taking  of  construction loans, it does not follow that the purpose of the lease  was for  erecting  residential  buildings.   The  provision  for taking  construction loans is in the lease deed only  as  an exception  to the covenant against the  lessee  mortagaging, charging  or  assigning the demised land  or  the  buildings which  may  be erected thereon and not for laying  down  the purpose  for  which  the land  was  demised.   Although  the expression  buildings  of  any  description  howsoever"  may include buildings for            119 residence the lessees may choose not to put up any structure for any of the purposes mentioned in s. 6(1). [122 C--G]     Mrs. Dossibai Jeejeebhoy v. Khemchand Gorumal, [1962]  3 S.C.R. 921. explained.

JUDGMENT: Civil Appellate Jurisdiction: Civil Appeal No. 1649 of 1967. of 1967.     Appeal  by  special leave from the judgment  and  decree dated  September  22, 23, 1967 of the Bombay High  Court  in Special Civil Application No. 2293 of 1966.     H.R.  Gokhale, Janendra Lal, and B. R Agarwala, for  the appellant.     S.T.  Desai,  A. G. Parikh, and P.C. Bhartari,  for  the respondents. The Judgment of the Court was delivered by     Shelat, J.  In or about 1951, certain portions of  plots Nos. 254 and 255, situate at Bandra in Greater Bombay,  were let  out to the appellant by their owner,  Louis  Fernandes. The  appellant  thereafter  constructed  on  those  portions certain  structures wherein he has since been  residing  and carrying  on  business.   By an  Indenture  of  Lease  dated December 5, 1958 the said Louis Fernandes demised the  whole of the said plots in favour of the respondents for a  period of  99 years commencing from December 1, 1958 on  a  monthly rent of Rs. 401 and on the terms and conditions contained in the said Indenture.  C1. 2(c) of the said Indenture provided that the lessees thereby covenanted with the lessor "not  to assign,  mortgage  or  charge the demised  premises  or  the building  or  buildings or any structures  to  be  hereafter erected  without first obtaining the consent of  the  lessor and such consent shall not be refused by the lessor if it is bona  fide."   The said sub-clause, however,  permitted  the lessee  to take construction loans from prospective  tenants of  a building he may erect on the said demised land and  to execute  in  favour of such tenant or tenants  agreement  or agreements  in form prescribed by the Rent Control Act.   No such  form, we were informed, has been provided by the  Act. C1.  4 provided that on or before the execution of the  said Indenture  the lessee should advance to the lessor a sum  of Rs.  10,000/-"for  the  observance and  performance  of  the covenants  and  stipulations  on the  part  of  the  lessees hereinbefore contained and which amount shall be a charge on the  said  land  and premises hereunder  mentioned  and  the lessor  shall allow the lessees to deduct every month a  sum

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of Rs. 100/- (Rupees one hundred) out of the rent payable by the lessees to the lessor and 120 credit  the  same towards the liquidation  of  this  deposit amount  till the whole of this deposit amount is fully  paid of".   CL.  8 empowered the lessees "at all times  and  from time to time hereafter to construct and erect upon any  part of  the land hereby demised buildings of  every  description howsoever  but subject to the rules and regulations  of  the Municipality and Government  ......  ". The  respondents  thereafter filed two suits  in  the  Small Causes Court at Bombay for eviction of the appellant and for possession     of the said portions of the said  two.  plots relying  on  s. 13 of the Bombay Rents,  Hotel  and  Lodging House Rates  Control  Act, 57 of 1947 (hereinafter  referred to  as  the  Act)  which  entitles  a  landlord  to  recover possession  of  the premises let out to a tenant  where  the premises are land and such land is reasonably and bona  fide required by the landlord for the erection of a new building. The  appellant resisted the suits inter alia on  the  ground (which is the only ground which now survives in this appeal) that part of the consideration payable under the said  lease was  prohibited under s. 18 of the Act, that the lease  was, therefore,  illegal and void and could not be the basis  for the respondents’ right to recover possession under s. 13(1).     The  Trial  Court, as also the Appellate  Bench  of  the Small Causes Court, negatived this contention on 3  grounds; (1)  that  the said lease did not fall within the  scope  of Part  II of the Act which contains s. 18, (2) that  assuming that it did, the advance payment of Rs. 10,000 did not  fall within the mischief of s. 18(1),’ and (3) that even assuming that  the lease fell within Part II of the Act  and  further assuming that the said Rs. 10,000/- were within the mischief of  s. 18 ( 1 ) the provisions of s. 18 ( 1 )  affected  the lessor but did not make the lease invalid. Aggrieved by this decision the appellant went to the High  Court  by  way   of a  writ petition under  Art. 227 of the  Constitution.   The High  Court  dismissed the writ petition agreeing  with  the Appellate  Bench  on the first and the second  grounds,  but leaving  the third ground undetermined as in its opinion  it was  unnecessary  to decide it in the view it  took  on  the first and the second grounds.  Hence this appeal by  special leave.     Mr.  Gokhale raised the very same contention  which  the appellant  raised unsuccessfully in the Small  Causes  Court and   the   High  Court.  The   question,   therefore,   for determination  is, whether the, said lease falls within  the scope of Part II of the Act, for, if it doe,, not, obviously it  would not attract the provisions of s. 18 (1 ) which  is contained in that Part.      The leased premises being land, admittedly not used for agricultural  purposes  and  being situated  in  the  Bombay Suburbar District, are clearly premises under s. 5(8) of the Act.  But so far as Part II is concerned, s. 6(1 )  provides that this Part shall apply 121 only  to premises "let for residence,  education,  business, trade  or  storage".  As the lease was not for  any  of  the purposes  set  out  in  s. 6(1), Part II  of  the  Act,  and therefore, s. 18(1) would obviously have no operation.     In Mrs. Dossibai N.B. Jeejeebhoy v. Khemchand Gorumal  & Ors. (1)the appellant had taken on lease, as in the  present case,  an open land and the question was whether, when  such land  is  being  leased not to be used for  the  purpose  of residence  in its condition of open land but to be used  for

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the  purpose  of  residence  after  putting  up   structures thereon,  the letting of land can be said to be letting  for residence.  The leases there mentioned that the lessee  will construct  buildings  suitable  for  residential,  business, industrial or office purposes.  It was held that the  leases fell under s. 6(1), and therefore, were within the ambit  of Part II of the Act, and consequently, the Small Causes Court at  Bombay,  as the Rent Court under the Act,  and  not  the ordinary  civil  court, had jurisdiction to try a  suit  for possession.   Thus, the question whether Part II of the  Act applies to particular premises or not depends on the purpose for which such premises are leased.     In the present case no difficulty arises, for, cl. 8  of the  lease in clear terms provides that the lessees were  to be  at  liberty  at  all times and  from  time  to  time  to construct  and  erect  upon any part  of  the  demised  land buildings  of every description howsoever. Though the  lease was in respect of open land except to the extent thereof  on which  the appellant had built structures, the  purpose  for which it was demised clearly was for constructing  buildings of  any  description  howsoever  and  not  for  constructing buildings’  for  residence, education,  business,  trade  or storage.   The land thus demised, though premises within the meaning  of  s. 5(8), was not premises "let  for  residence, education, business, trade or storage" within the meaning of s. 6(1), and therefore, s. 18(1) would not apply as was  the case in Mrs. Dossibai N.B. Jeejeebhoy v. Khemchand Gorumal & Ors.(1)  where the open land was let out for the purpose  of putting up structures for residence.     Mr.  Gokhale’s  contention, however, was  that  s.  6(1) would  apply  because the expression  "building   of   every description   howsoever"   would   include   buildings   for residence, and therefore, the lessees were at liberty  under cl.  (8)  of the lease to  construct  residential  buildings also.   That may be so, but then the lessees may choose  not to  put up any structure for any of the purposes set out  in s.  6(1) in which case if Mr. Gokhale were to be right  Part II would still apply. That cannot possibly be the meaning of s.  6 ( 1 ). Properly construed, s. 6(1) must mean  that  in order that Part II     (1) [1962] 3 S.C.R. 921. L 1 Sup. C 170--9. 122 may  apply the premises in question must be let out for  the purposes of residence etc. and then only the leased premises would  be subject to and governed by the provisions of  Part II.  The application of that part cannot have been  intended to  depend upon what a lessee may do or may not do.   It  is the  purpose  of the lease and not only future choice  of  a lessee which determines the application of Part II.  That is the  clear and obvious meaning of the words "let for" in  s. 6(1).     The  next argument of Mr. Gokhale was that  even  though el.  8  uses the expression "building of  every  description howsoever",  the real purpose for which the lease was  taken by  the lessees was to construct structures  for  residence. In  support  of his argument he relied on cl.  2(c)  of  the lease  which permits the lessees to take construction  loans from  prospective tenants of the buildings to be erected  by the lessees and urged that since under s. 18 ( 3 ) the  only construction   loans   permitted  are  for   financing   the construction  of residential buildings, the purpose  of  the lease must necessarily be for erecting residential  building or  buildings  only. This argument also  cannot  be  upheld, firstly, because the operation of el. 2(c) relied on by  Mr. Gokhale does not deal with nor is concerned with the purpose

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for  which the land was leased, and secondly,’  because  the question of taking construction loans can arise only if  the lessees  were to decide to put up building or buildings  for residential  purposes and not otherwise, as s. 18(3) of  the Act  permits  advances from tenants  for  constructing  such buildings  only.   C1.  2 (c) in the lease was  put  in  the Indenture  to  provide  for such a  contingency  and  as  an exception  to the covenant against the  lessees  mortgaging, charging or assigning the demised land and/or the  buildings which  may be erected thereon, and not for laying  down  the purpose  for which the land was demised.  It is,  therefore, neither right nor proper to construe the purpose of a  lease by   depending  upon  such  an  exception  to   a   covenant ,restricting  the  lessees  from  mortgaging,   charging  or assigning  the land or the buildings which might be  put  up thereon. There is, therefore, no reason to hold that because s.   18(3)   permits  construction  loans  in   respect   of residential buildings only, it must follow that the  purpose of the lease must be held to be one for erecting residential buildings.     In  the view that we take that the leased  premises  are not premises contemplated by s. 6(1), and therefore, Part II of the Act cannot apply, the second question decided by  the High Court, namely, that the advance amount of Rs.  10,000/- was  not a payment falling under s. 18(1) would  not  arise. For  that reason, the third quest;on also which was  in  the further alternative need not be gone into. 123     In the result, the appeal is dismissed with costs.   The appellant will not be dispossessed of the premises in appeal till  November  28,  1969 when he shall  hand  over  to  the respondent quiet and vacant possession. Y.P.                                                  Appeal dismissed. 124