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PETITIONER: RAM SWAROOP RAI

       Vs.

RESPONDENT: LILAVATHI

DATE OF JUDGMENT07/05/1980

BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. PATHAK, R.S.

CITATION:  1982 AIR  945            1980 SCR  (3)1034  1980 SCC  (3) 452  CITATOR INFO :  C          1984 SC  87  (20)  RF         1988 SC2031  (7)  F          1990 SC 897  (8,11,13)

ACT:      U.P. Rent  Control Act  (Act 13 of 1972), Section 2(2)- Exemption from  application of the provisions of the Act for the period  of ten  years in  respect of  new constructions- Burden of  Proof is  upon the  landlord  and  not  upon  the tenant.

HEADNOTE:      The respondent  landlady purchased  shop No.  66 in the city of  Jhansi in 1969 from one Brij Mohan (DW 2), occupied the first  floor and  allowed the appellant/tenant to occupy the ground  floor in 1970 on a lease deed which recited that the building  was erected  in 1965.  In 1975, the respondent filed the  ejection suit  on the basis that the building was new,  that   the  Act   did  not   deter  eviction   of  new constructions put  up within  ten years of the suit and so a decree was  inevitable. The  appellant-tenant  resisted  the claim on the plea that the building was constructed 50 years earlier. The  Trial Court  negatived the defence and decreed eviction and  this was  upheld by  the High Court. Hence the appeal by special leave to this Court.      Allowing the  appeal and  remanding the  matter to  the Trial Court, the Court ^      HELD :  1. In  the normal  course, no  doubt the appeal must be dismissed as concluded by findings of fact. To avoid possible public  mischief through  a new class of litigation for eviction  by easy  resort  to  the  "new  construction," expedient,   interference   under   Article   136   of   the Constitution is necessary. [1037 A-B]      2.Section  2(2)  of  the  U.P.  Act,  uses  the  phrase "nothing in  the rent  control legislation  shall apply to a building" during  a period  of ten  years from  the date  on which its  construction is  completed. In  other  words,  in regard to  all buildings  the Act  applies save  where  this exemption  operates.   Therefore  the   landlord  who  seeks exemption must prove that exception. The burden is on him to make out  that notwithstanding the rent control legislation,

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his building  is out  of its ambit. It is not for the tenant to prove  that the  building has  been constructed  beyond a period of  ten years, but it is for the landlady to make out that the construction has been completed within ten years of the suit.  This is  sensible not  merely because the statute expressly states  so and  the setting  unnecessarily implies so, but  also because it is the landlady who knows best when the building  was completed,  and not the tenant. As between the two,  the owner of the building must tell the court when the building  was constructed,  and not  the tenant thereof. Speaking generally, it is fair that the onus of establishing the date of construction of the building is squarely laid on the landlord although in a small category of cases where the landlord is a purchaser from another, he will have to depend on his assignor to prove the fact. [1038 C-F]      3.  An analysis of Explanation 1 to s. 2(2) of the U.P. Act indicates:           (1)  Where a building has not been assessed, it is                the date on which the completion was reported                to,  or   otherwise  recorded  by  the  local                authority having jurisdiction. [1038 G-H] 1035           (2)  Where a building has been assessed, it is the                date on  which the  first   assessment  comes                into effect.                Provided  that  if  the  date  on  which  the                completion was  reported,  to,  or  otherwise                recorded by,  the local  authority is earlier                than the  date of  the first  assessment, the                date of completion will be such earlier date.                [1039 A-B]           (3)  Where  there   is  no   report,   record   or                assessment,  it   is  the   date  of   actual                occupation for  the first  time (not being an                occupation for the purpose of supervising the                construction or  guarding the  building under                construction). [1039 B-C]      Unfortunately, it  is not  possible for  the purchaser- respondent or  the tenant-appellant to give direct testimony about the  time of  the construction  or the  nature of  the construction vis-a-vis  Explanation (b)  or  (c).  The  best testimony is  the municipal  records about the completion of the  building   and  the   verification  by   the  municipal authorities as  to whether  a new construction has come into being or an old construction has been remodelled and, if so, when  exactly  the  completion  took  effect.  It  is  quite conceivable  that  the  municipal  records  bearing  on  the completion of  the construction  may throw conclusive light, whatever might  have been  the original proposal in the plan submitted. It  is perfectly  possible that  on a view of the earlier construction,  vis a  vis the completed new building the former  may form  but a  small part. It may also be that the implication of the expression "increased assessment" may be explained with reference to earlier assessment records in the municipality.  Moreover,  whenever  a  new  building  is completed, a report has statutorily to be made and only on a completion survey  and certificate, occupation is ordinarily permitted. These  records must  also  be  available  in  the office of  the local  authority. The  statute makes it clear that reliance  upon the municipal records rather than on the lips of  witnesses, is  indicated to  determine the  date of completion  and   the  nature   of  the  construction.  This statutory guideline  has  been  wholly  overlooked  and  the burden lying  on the  landlord has not been appreciated. The result is that the eviction order has to be demolished.

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                                       [1039 F-G, 1040 D-G]      In the instant case (i) the Municipal assessment record produced in  the Court merely states "increased assessment". It may suggest the existence of an assessment which has been increased or it may perhaps be argued that when the building was reconstructed  a new  assessment was made which was more than the  previous assessment  and, therefore, was described as  increased   assessment;  (ii)   the  oral   evidence  is inconsequential  being   second  hand  testimony.  Even  the recital in  the rent  deed that there was a new construction in 1965-66  is by  the appellant and the respondent, neither of whom  has any direct knowledge about the construction. Of course, an  admission by  the appellant  is evidence against him but  an admission is not always conclusive especially in the light of the municipal records such as are available and the burden  such as  has been laid by the statute; and (iii) the failure  of the  trial Court specifically to record when the building  was completed  and  what  was  the  extent  of rebuilding, whether  it was  a case  of total demolition and reconstruction or  such extensive  additions as  to push the existing building  into a  minor part,  becomes fatal. These basic issues  have failed  to receive any attention from the courts below.  A finding recorded on speculative basis is no finding and that is the fate of the holding. [1039 G-H, 1040 A-D] 1036

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2109 of 1979.      Appeal by  Special Leave  from the  Judgment and  Order dated 7-5-1979 of the Allahabad High Court in Civil Revision No. 900 of 1978.      A.K.  Sen,  B.S.  Banerjee  and  R.N.  Govind  for  the Appellant.      J.P. Goyal and S.K. Jain for Respondent.      The Judgment of the Court was delivered by      KRISHNA IYER,  J.-A brief  back-drop leads to the short point in  issue. Chronic scarcity of accommodation in almost every part  of the  country has  made ’eviction’  litigation explosively considerable,  and the strict protection against ejectment, save  upon restricted  grounds,  has  become  the policy of the State. Rent Control Legislation to give effect to this  policy exists everywhere, and we are concerned with one such  in the  State of  U.P. (U.P.  Act 13 of 1972). The legislature found  that rent  control  law  had  a  chilling effect on  new building  construction, and  so, to encourage more building  operations, amended  the statute  to release, from  the   shackles  of   legislative   restriction,   ’new constructions’ for  a period  of ten  years. So  much so,  a landlord who  had let  out his  new building  could  recover possession  without   impediment  if   he  instituted   such proceeding within ten years of completion. The respondent is a landlady  who claims  to fill the bill in this setting and seeks to  evict  the  appellant-tenant  untrammeled  by  the provisions of  the Act. She has succeeded in both the courts below and  the appellant challenges the order as illegal and vitiated by a basic error of approach.      We should have made short work of it had there not been the need  for this  Court to  set the  sights right  in  the class, of  litigation where  exemption from the operation of the Act  is claimed  on the  ground that the construction is new and the case is filed within the ten-year moratorium. If

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the exemption  is erroneously  liberalised to  frustrate the principal  measure  by  failure  to  stick  to  basic  legal principles, the jurisprudence of rent control may become too jejune to  be socially  effective. That  is why we examine a few fundamentals  here in  the decisional  process  of  this class of cases.      The area  of controversy,  factual and legal, is small. The respondent  purchased shop  No. 66 in the city of Jhansi in 1969  from one Brij Mohan (DW2), occupied the first floor and allowed  the appellant,  as tenant, to occupy the ground floor in  1970 on  a  lease  deed  which  recited  that  the building was  erected in  1965. In 1975 the present eviction action was  instituted on  the basis  that the  building was new,  that   the  Act   did  not   debar  eviction   of  new constructions put  up within  ten years of the suit and so a decree was inevitable. 1037 The tenant  resisted the claim on the plea that the building was constructed  50 years ago. The trial court negatived the defence and decreed eviction and this was upheld by the High Court.      If it  were a  bare finding  of fact we should not have reopened it, but Shri A.K. Sen argues that fundamental flaws in the  understanding of  the law have vitiated the decision which, if  left uncorrected,  will  spell  a  new  class  of litigation  for   eviction  by   easy  resort  to  the  ’new construction  expedient.   Such  possible   public  mischief persuades us  to have a closer look at the Act to the extent relevant.      Shri J.P.  Goel rightly  reminds us  that in the normal course the appeal must be dismissed as concluded by findings of fact.  But we  will probe  the matter  further to explore whether there  is any  substance in Shri A.K. Sen’s argument of fundamental  failure  bearing  on  the  legality  of  the conclusions. The  anatomy of  the Act  is substantially  the same  as  that  of  other  similar  legislations.  The  most important feature  we have  to notice  is the exemption from application of  the provisions  of the Act for the period of ten years  in respect  of new constructions. Section 2(2) is relevant in this context and runs as follows:           Except as  provided in  sub-section (5) of section      12 sub-section  (1A) of  section 21, sub-section (2) of      section 24,  sections 24A,  24B, 24C or sub-section (3)      of section  29, nothing  in this  Act shall  apply to a      building during  a period of ten years from the date on      which its construction is completed.                xxx            xxx            xxx           Explanation  I.-For  the  purposes  of  this  sub-      section,           (a) The construction of a building shall be deemed      to have  been  completed  on  the  date  on  which  the      completion thereof is reported to or otherwise recorded      by the  local authority having jurisdiction, and in the      case of  a building  subject to assessment, the date on      which the  first assessment  thereof comes into effect,      and where the said dates are different, the earliest of      the said  dates, and in the absence of any such report,      record or  assessment, the date on which it is actually      occupied  (not  including  occupation  merely  for  the      purposes of  supervising the  construction or  guarding      the building under construction) for the first time:           Provided that  there may  be  different  dates  of      completion of  construction  in  respect  of  different      parts of  a  building  which  are  either  designed  as      separate units or are occupied

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1038      separately by  the landlord  and one or more tenants or      by different tenants.           (b) ’construction’  includes any new constructions      in place  of an existing building which has been wholly      or substantially demolished;           (c) Where  such substantial addition is made to an      existing building,  that the  existing building becomes      only a  minor part  thereof, the  whole of the building      including the  existing building  shall be deemed to be      constructed on  the date  of  completion  of  the  said      addition. This sub-section  and its  construction is  decisive of  the fate of  the appeal. Nothing in the rent control legislation shall apply to a building "during a period of ten years from the date  on which its construction is completed." The first thing that  falls to  be emphasised is that in regard to all buildings  the   Act  applies   save  where  this  exemption operates. Therefore,  the landlord  who seeks exemption must prove that  exception. The burden is on him to make out that notwithstanding the  rent control  legislation, his building is out  of its ambit. It is not for the tenant to prove that the building  has been  constructed beyond  a period  of ten years. But  it is  for the  landlady to  make out  that  the construction has  been completed  within ten  years  of  the suit. This  is  sensible  not  merely  because  the  statute expressly states  so and the setting necessarily implies so, but also  because it is the landlady who knows best when the building was  completed, and  not the tenant. As between the two, the  owner of the building must tell the court when the building  was  constructed,  and  not  the  tenant  thereof. Speaking generally, it is fair that the onus of establishing the date of construction of the building is squarely laid on the landlord,  although in  a small  category of cases where the landlord  is a  purchaser from  another, he will have to depend on his assignor to prove the fact.      Firstly,  therefore,   we  must   examine  whether  the respondent has  made out  her case  for exemption  from  the operation of  the Act  based on  the  vital  fact  that  the building has  been completed  only within  ten years  of the suit. The  second thing we have to remember is Explanation 1 quoted above.  When  is  a  building  deemed  to  have  been completed? An  analysis of  Explanation 1  to s.2(2)  of the U.P. Act indicates:           (1)  Where a building has not been assessed, it is                the date on which the completion was reported                to, or  other  wise  recorded  by  the  local                authority having jurisdiction. 1039           (2)  Where a building has been assessed, it is the                date on which the first assessment comes into                effect.           Provided that  if the date on which the completion      was reported  to, or  otherwise recorded  by, the local      authority  is  earlier  than  the  date  of  the  first      assessment, the date of completion will be such earlier      date.           (3)  Where  there   is  no   report,   record   or                assessment,  it   is  the   date  of   actual                occupation for  the first  time (not being an                occupation for the purpose of supervising the                construction or  guarding the  building under                construction ).      It is  common case  that Shop Nos. 65 and 66 were owned by a  common owner,  Shri Brij Mohan, DW2. He sold only Shop

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No. 66  to the respondent. So, there is no doubt, that there was an  existing building,  Shop No.  66, long  prior to the ten-year period  mentioned in  the statute. According to the testimony of  Shri Brij  Mohan, DW2,  the  old  construction continued, but  certain additions and remodelling were done. He had  submitted a  plan to  the local authority indicating the original  construction and  the proposed  additions, and that is  marked as  Exhibit in  the  case.  This  shows  the existence of  a  prior  building,  the  proposal  being  for addition  or   partial  reconstruction  and  not  for  total demolition. If  we go  by the  plan, it  is not  possible to conclude automatically  that there is a new construction. If we go by Brij Mohan’s evidence, the owner of the building at the relevant  time, we  cannot  necessarily  hold  that  the existing building  has  been  substantially  demolished  and reconstructed. Indeed,  his evidence  is to  the effect that the construction  such as  was made  was beyond  the 10 year period.      Unfortunately, it  is not  possible for  the purchaser- respondent or  the tenant-appellant to give direct testimony about the  time of  the construction  or the  nature of  the construction vis-a-vis  Explanation (b)  or  (c).  The  best testimony is  the municipal  records about the completion of the  building   and  the   verification  by   the  municipal authorities as  to whether  a new construction has come into being or an old construction has been remodelled and, if so, when exactly  the  completion  took  effect.  The  municipal assessment  record   produced  in  the  court  merely  state "increased assessment".  It may  suggest the existence of an assessment which  has been  increased or  it may  perhaps be argued that  when  the  building  was  reconstructed  a  new assessment  was  made  which  was  more  than  the  previous assessment and, therefore, 1040 was described  as increased assessment. The oral evidence in the  case,   apart  from   what  we   have   set   out,   is inconsequential,  being  second  hand  testimony.  Even  the recital in  the rent  deed that there was a new construction is 1965-66  is by  the appellant and the respondent, neither of whom  has any direct knowledge about the construction. Of course, an  admission by  the appellant  is evidence against him but  an admission is not always conclusive especially in the light of the municipal records such as are available and the burden such as has been laid by the statute.      Viewed in  this perspective,  the failure  of the trial court specifically to record when the building was completed and what  was the  extent of  re-building, whether  it was a case  of   total  demolition   and  reconstruction  or  such extensive additions  as to push the existing building into a minor part, becomes fatal. These basic issues have failed to receive any  attention from  the  courts  below.  A  finding recorded on  speculative basis is no finding and that is the fate of the holding in the present case.      We do  not want  to dwell  on the  evidence in  greater detail because  we propose  to remit  the case  to the trial court  (Court   of  the  First  Additional  District  Judge, Jhansi). It  is quite conceivable that the municipal records bearing on  the completion  of the  construction  may  throw conclusive light,  whatever might  have  been  the  original proposal in  the plan  submitted. It  is perfectly  possible that on  a view  of the  earlier construction, vis a vis the completed new  building, the  former may  form but  a  small part. It  may also be that the implication of the expression "increased assessment"  may be  explained with  reference to earlier assessment  records in  the municipality.  Moreover,

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whenever  a   new  building   is  completed,  a  report  has statutorily to  be made  and only on a completion survey and certificate,  occupation   is  ordinarily  permitted.  These records must  also be  available in  the office of the local authority. The statute makes it clear that reliance upon the municipal records,  rather than on the lips of witnesses, is indicated to determine the date of completion and the nature of the  construction.  This  statutory  guideline  has  been wholly overlooked  and the  burden lying on the landlord has not been  appreciated. The result is that the eviction order has to be demolished.      It may still be open to the landlady-respondent to make out his  case by  producing better municipal evidence in the light of  what we have indicated. We do not wish to deny the landlady this  opportunity because  the trial  court has not approached the  problem from the correct legal angle. We set aside the  judgment of  the courts  below and remit the case for hearing to the trial court. The trial court 1041 will give  an opportunity  to both  sides  to  adduce  fresh evidence, documentary  and oral,  to make  out the ground of exemption from  the application  of the Act. Of course, when the entire  evidence is  before the court, the onus of proof will play a lesser role.      Before parting  with the  case, we  wish  to  notice  a submission made  by Shri Goel that the landlady’s son was an unemployed engineer  who needed  the premises  for  personal requirement. Even  if the  Act applies,  it is  open to  the landlady to  make out  any of  the grounds under the Act for eviction. To  avoid prolixity  and delay of the proceedings, we permit  the trial  court to  allow the  landlady, if  she applies in  that behalf,  to plead  on an alternative basis, for eviction on any of the specified grounds under the Act.      The appeal  is allowed  and the  case remitted  to  the Court of the Addl. District Judge, Jhansi for fresh disposal in the light of the observations made above. S.R. Appeal allowed. 1042