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PETITIONER: PANCHAMAL NARAYAN SHENOY

       Vs.

RESPONDENT: BASTHI VENKATESHA SHENOY

DATE OF JUDGMENT: 20/02/1970

BENCH: VAIDYIALINGAM, C.A. BENCH: VAIDYIALINGAM, C.A. SIKRI, S.M. BHARGAVA, VISHISHTHA

CITATION:  1971 AIR  942            1970 SCR  (3) 734  1970 SCC  (1) 499  CITATOR INFO :  RF         1979 SC1559  (5,10)  R          1987 SC2117  (32)

ACT:     Mysore   Rent  Control  Act  (Mys.  22  of   1961),   s. 21(1)j--Reasonably  and  bona fide  required  for  immediate demolition--Whether has reference to condition of premises.

HEADNOTE:     Under s. 21 (1) (j) of the Mysore Rent Control Act, 1961 the  court  may  on an application  order  the  recovery  of possession  of  any premises in favour of the  landlord,  if "the  premises are reasonably and bona fide required by  the landlord  for the immediate purpose of demolishing them  and such demolition is to be made for the purpose of enacting  a new  building  in  place  of  the  premises  sought  to   be demolished,".   The  respondent-landlord  applied  under  s. 21(1)(j)  for eviction of the tenants  appellants,  claiming that the premises were reasonably and bona fide required  by him for the immediate purpose of demolishing and erecting of a  new  building, that the premises were old  and  were  not suitable  for continued occupation.  The respondent  claimed to have obtained the necessary licence and to have made  all preparations  for  demolishing the existing.,  building  and erecting new building.  The appellants-tenants contested the claim.    The  Rent  Controller  accepted   the   respondent landlord’s claim and ordered eviction, which in appeal,  and further revision to the High Court was upheld.  In appeal to this  Court for the appellant-tenant, it was contended  that unless the landlord was able to establish that the condition of  the  building  was  such  that  it  required   immediate demolition  and  reconstruction, no eviction of  the  tenant could  be  ordered  under s. 21  (1)  (j).   Rejecting  this contention and dismissing the appeal,     HELD : The requirement contemplated under clause (j)  of the  proviso  to sub-s. (1) is that of the landlord  and  it does not have any reference to the condition of the building as  such.  What is necessary under that clause is  that  the landlord must satisfy the Court that he reasonably and  bona fide  requires  the premises for the  immediate  purpose  of

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demolishing  it  and such demolition is for the  purpose  of erecting  a  new building in the place of the old  one.   No doubt, whether the landlord’s requirement is reasonable  and bona  fide has to be judged in the light of the  surrounding circumstances,   which   will   include   his   means    for reconstruction of the building, and other steps taken by him in that regard. [737 G, H]      In   considering   the   reasonable   and   bona   fide requirements of the -landlord under this clause, the  desire of the landlord to put the property to a more profitable use after  demolition and reconstruction is also a  factor  that may be taken into account in favour of the landlord.  It  is not  necessary  that  the landlord  should  go  further  and establish  under  this  clause that  the  condition  of  the building is such that it requires immediate demolition. [738 D]      Neta  Ram  v.  Jiwan Lal, [1962] Supp.  2  S.C.R.  623, referred to.      Mehsin  Bhai v. Hale & Company, (1964) II  M.L.J.  147, contra observation disapproved.

JUDGMENT:      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1552  of 1966. 735      Appeal  by-special  leave from the judgment  and  order dated  June 8, 1966 of the Mysore High Court in  C.R.P.  No. 1118 of 1964.      M. C. Chagla and R. Gopalakrishnan, for the appellant.      M. R. Ramamurthi, S. S. Javali and M. Veerappa, for the respondent.      The Judgment of the Court was delivered by      Vaidailyngam  J.  this  appeal, by  special  leave,  is against the judgment of the Mysore High Court, dated June 8, 1966 in Civil Revision Petition No. 1118 of 1964.      The  respondent land-lord filed an  application,  dated July 6, 1962 under s. 21 (1) (j) of the Mysore Rent  Control Act, 1961 (Mysore Act XXII of 1961) (hereinafter called  the Act) before the Rent Controller for eviction of the  tenants (the appellants herein) on the ground that the premises were reasonably  and bonafide required by him for  the  immediate purpose  of  demolishing  and erecting of  a  new  building. According  to the respondent the premises were old and  were (not suitable for continued occupation.  The respondent  had also  stated  in his -application that he had  obtained  the necessary   licence  for  erecting  a  new  building   after demolition of the existing building and that he had made all preparations for demolition and erection of new buildings on the  site. The appellant-tenant contested the claim  of  the landlord  on several grounds.  He pleaded that the  premises were  not old and that it was quite suitable for  occupation and it does not require any re-construction or  remodelling. The allegations that the building was old and required to be reconstructed  were not bona fide and had been made  by  the landlord  only  as a pretext for evicting the  tenant.   The tenant further pleaded that the requirement of the  landlord was  neither  reasonable nor bona fide.  In any  event,  the tenant  claimed  that he should be entitled to be  paid  the value of the improvements that had been effected by him.      The  Rent  Controller, by his order dated  January  22, 1964  accepted  the  claim of  the  respondent  and  ordered eviction  of the appellant granting the tenant  one  month’s time   for   delivering  vacant  possession.    Though   the

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Consulting Engineer who gave evidence as P.W. 2 on behalf of the  respondent  had stated that the building  was  over  60 years old but nevertheless it could go co for about 15 years more,  the Rent Controller actually found that the  building was more than 50 years old and that it was an  old-fashioned one.   He  further found that when the landlord  desired  to pull it down and put up a modern building thereon, it  could not under the circumstances, be- said that his claim was not bona fide or reasonable 736 and  that the intention of the landlord in pulling down  the building  and erecting a new one to get a better return  was certainly understandable.  The Rent Controller further found that the landlord had proved that he had sufficient means to construct  the  building and that he had also  obtained  the necessary  sanction  from  the  Municipality  concerned  for reconstruction  of  the  building.  In  view  of  all  these circumstances,   the   Rent  Controller   found   that   the requirement  of the landlord was quite reasonable  and  bona fide.   Regarding  the claim of the tenant  for  payment  of improvements before eviction is ordered, the Rent Controller found  that  such a claim, even if  established,  could  not stand  in the way of the landlord getting possession of  the premises.  Ultimately the application filed by the  landlord was allowed.      The  findings  recorded  by the  Rent  Controller  were confirmed  by  the learned District Judge, by  his  judgment dated  October 19, 1964 in A.S. No. 43 of 1964 taken  before him by the tenant.      The  revision  filed by the appellant before  the  High Court was rejected by order dated June 8, 1966.      Mr.   Chagla,   learned  counsel  appearing   for   the appellant,  contended that the interpretation placed by  all the Courts on s. 21 (j) of the Act was erroneous.  According to  the  learned counsel, unless the landlord  was  able  to establish  that the condition of the building was such  that it  required  immediate demolition and  re-construction,  no eviction of the tenant could be ordered under s. 21 (1)  (j) of  the Act.  On the findings of the Courts, based upon  the evidence  of the Engineer, that though the building was  old it  could continue to exist for another 15 years, it  should have  been held that the conditions mentioned in s.  21  (I) (j)  were not attracted to justify an order of  eviction  of the tenant.      Mr.  Ramamurthi,  learned counsel for  the  respondent, pointed  out that in order to attract s. 21 (I) (j)  it  was not  necessary that the landlord should establish  that  the condition  of the building was such that it required  to  be demolished immediately.  On the other hand, the  sub-section made it clear that the requirement contemplated was that  of the  landlord and once his requirement had been held by  all the Courts to be reasonable and bona fide, the order  passed for eviction of the tenant was fully justified.      Having  due  regard to the scheme of the  Act,  we  are satisfied that the interpretation placed upon S. 21(1)(j) by the High Court is correct.      Section 21 (1), while placing a general embargo against a  landlord  from  evicting a tenant,  recognises,  in  its. proviso the circumstances under which a landlord could  seek recovery of 737 possession  of  a  premises.   The  ground  upon  which  the landlord asked for eviction, in the present case, was  based on s. 21 (1) (j).  The material provision is as follows :               "21.  (1)  Notwithstanding  anything  to   the

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             contrary   contained  in  any  other  law   or               contract  no order or decree for the  recovery               of possession of any premises shall be made by               any court or other authority in favour of  the               landlord against the tenant:               Provided that the court may on an  application               made to it, make an order for the recovery  of               possession of a premises on one or more of the               following grounds only, namely:-                ..............................               (j)   that  the  premises are  reasonably  and               bona  fide  required by the landlord  for  the               immediate purpose of demolishing them and such               demolition  is to be made for the  purpose  of               erecting  a  new  building  in  place  of  the               premises sought to be demolished;                ................................ According to Mr. Chagla, the words ’reasonably and bona fide required’, occurring in this clause, must be interpreted  to have  reference  to  the  condition  of  the  building,  the demolition  of  which is sought to be made and  those  words have  no  reference  to any  intention  entertained  by  the landlord.   The mere fact that a landlord may bona fide  and reasonably entertain an idea of demolishing the building and reconstructing the same with a view to putting the  property to  a  more  profitable use  after  construction,  will  not satisfy  the  requirements  of the said  clause.   That  is, according  to  the  learned counsel, the  condition  of  the building  must be such that it is immediately  necessary  to demolish  it,  in which case alone eviction  under  cl.  (j) could be ordered.     We  are not inclined to accept this construction  sought to be placed by the appellant on the clause in question.     The  proviso  to  s.  21  (1)  enumerates  the   various circumstances  under  which a landlord may seek  to  recover possession of the property from his tenant.  The requirement contemplated under clause (j) of the proviso to sub-s. ( 1 ) is  that of the landlord and it does not have any  reference to the condition of the building as such.  What-is necessary under  that  clause is that the landlord  must  satisfy  the Court that he reasonably and bona fide requires the premises for  the  immediate  purpose  of  demolishing  it  and   the demolition is for the purpose of erecting a new building  in the  place  of  the old one.  No doubt, as  to  whether  the landlord’s requirement is reason- 738 able  and  bona  fide has to be judged  by  the  surrounding circumstances,   which   will   include   his   means    for reconstruction  of the. building, and other steps  taken  by him in that regard.      In considering the reasonable and bona fide requirement of  the  landlord  under  this clause,  the  desire  of  the landlord to put the property to a more profitable use -after demolition  and reconstruction is also a factor that may  be taken  into  account  in favour of  the  landlord.   In  our opinion,  it  is not necessary that the landlord  should  go further  and establish under this clause that the  condition of   the  building  is  such  that  it  requires   immediate demolition.  That the condition of the property may be  such which requires immediate demolition is emphasized in cl. (k) of  the  proviso.  When such a specific provision  has  been made  in cl. (k), the condition of the building cannot  come into the picture nor could it have been dealt with again  in cl.  (i).  So the requirement under cl. (j) is that  of  the landlord and cannot have any reference to the building.

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    This   Court,  in  Neta  Ram  v.  Jiwan  Lal   (1)   in interpreting   no  doubt  a  slightly   differently   worded provision in s. 13(3)(a)(iii) of the Patiala and East Punjab States Union Urban Rent Restriction Ordinance, 2006 B.K.  (8 of  2006 BK) held that one of the circumstances which  could be taken into account in considering the requirements of the landlord  with  reference to the existing building  is  ’the possibility of its being put to a more profitable use  after construction’.   In the case ’before us all the Courts  have concurrently  held that the requirement of the  landlord  is reasonable  and  bona  fide and that  he  had  obtained  the necessary sanction from the municipality concerned and  that the  landlord had also the means for reconstruction  of  the building.   If the landlord does not commence demolition  of the premises within the period specified in the order of the Court, the tenant is given a right under s. 26(1) to issue a notice to the landlord -of -his intention to occupy the pre- mises  from which he had been evicted and also to  apply  to the  Court for relief if the landlord does not  comply  with his request.  Again under s. 27, the tenant has got a  right to  occupy  the new building on its completion  provided  he satisfies the requirements contained in that section.  Under s.  2  8 (I), the landlord is bound to intimate  the  tenant from  whom he had received a notice under s. 27 the date  on which  the  erection of the new building will  be  completed from  which date the tenant will be entitled to  occupy  the same.       Mr. Chagla has referred us to a decision of the Madras High  Court  in  Mehsin Bhai v. Hate  &  Company  (2).   The section  which came up for consideration before  the  Madras High  Court was s. 14(3) of the Madras Buildings (Lease  and Rent  Control)  Act, 1960 (Act XVIII of 1960) which  was  as follows: (1) [1962] Supp. 2 S.C.R. 623. (2) [1964] 2 , M.L.J. 147. 739               14(1)(b)  that  the  building  is  bona   fide               required  by  the landlord for  the  immediate               purpose of demolishing it and such  demolition               is  to be made for the purpose of  erecting  a               new  building  on  the site  of  the  building               sought   to  be  demolished,  pass  an   order               directing the tenant to deliver possession  of               the   building  to  the  landlord   before   a               specified date." That  clause is substantially similar to s. 21(1)(j) of  the Act.In  the  Madras case it is seen that the  building  from which  the  tenant  was sought to be  evicted  was  in  good condition and there was no danger of its failing for another 20   years  though  the  building  was  old.   Under   those circumstances  when the landlord applied under s. 14(1)  (h) of the Madras Act for eviction on the ground that he  wished to  demolish the building for the purpose of erecting a  new building  thereon, the High Court affirmed the  decision  of the  Subordinate  Court declining relief  to  the  landlord, Though the learned Judge states that landlords May bona fide require such buildings, particularly old buildings in  their own  interest  for demolition and reconstruction,  he  holds that  it  is  equally possible that the  mere  fact  that  a building  is old may be taken advantage of by a landlord  to put  forth such pretext, his real object being ulterior  and not bona fide -,for the purpose of reconstruction.     We  have  no hesitation in agreeing  with  the-  learned Judge’s  observation  that  the  landlord  must  prove   the reasonableness  and  bona fide nature  of  his  requirement.

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But, if the learned Judge intended to Iay down a proposition of  law  that  under s. 14 ( I ) (b)  of  the-  Madras  Act, similar  to  s.  21 ( 1) (j) of the Act  a  landlord  cannot recover  possession of the property for the purpose  of  re- construction so as to put the property to a more  profitable use, we are of the view that the decision of the Madras High Court  must  be  considered  to  be  erroneous.   There   is absolutely  no  justification  for  putting  such  a  narrow interpretation on the clause in question.      Mr.  Chagla  further urged that before  his  client  is evicted  his,  claim  for  compensation  should  have   been considered  by  the Rent Controller.  It is  enough  to  say that, as pointed out by the High Court, that claim does  not arise  for consideration in these proceedings.  We may  also state  that a further contention regarding them validity  of the  notice to quit issued by the landlord which  was  taken before  the High Court -and held against the appellant,  has not been canvassed before us.      In  the result, the appeal fails and is dismissed  with costs.   The petitioner/appellant undertaken to  vacate  the premises within a month from today. Y.P.                                          Appeal dismissed. 740