A. Palaniswami Mudaliar vs S.C. Venkatachalam

Venkatadri, J.—The only point that arises in this civil revision petition is whether the landlord can be deemed to be in possession of a

nonresidential building when it was pledged under a key loan to the Canara Industrial and Banking Syndicate. The landlord filed an application

under S. 10 (3) (a) (iii) for eviction of the tenant on the ground that he requires the non-residential building in the possession of the tenant-petitioner

for the purpose of his own business, which he is now carrying on in one of the buildings situated in the Main Road, Shevapet, Salem. The tenant

resisted the application stating that the landlord''s application is not bona fide and that he owns a number of residential and non-residential buildings

in Longley Road, Mari Naicken St., and other places. The Rent Controller found that the requirement of the landlord is not bona fide and that the

landlord is in possession of a nonresidential building of his own, though it is under a key loan to the Canara Industrial and Banking Syndicate, and

accordingly dismissed the petition for eviction. On appeal, the Subordinate Judge took a different view and held that the requirement of the

landlord is bonafide and the landlord cannot be said to be in possession of another non-residential building, since the Canara Industrial and

Banking Syndicate will not release the building until the loan is discharged by the landlord. He, therefore, allowed the appeal and ordered eviction

of the tenant. On further revision, the District Judge confirmed the order of eviction passed by the Subordinate Judge observing that the landlord

can get the Godown No. 105, Angalamman St., Salem, only after discharging the loans to the Banking Syndicate and one cannot say when exactly

he would be able to get possession of that non-residential building.

It is against this order that the present civil revision petition is filed. The relevant provision of the Madras Buildings (Lease and Rent Control)

Act, 1960, is S. 10 (3) (a) (iii) which runs thus:

A landlord may......apply to the Controller for an order directing the tenant to put the landlord in possession of the building......in case it is any other

non residential building, if the landlord or his son is not occupying for purpose of a business which he or his son is carrying on, a non-residential

building in the City, town or village concerned which is his own.

The decision in this petition turns upon the interpretation to be given to the words ""not occupying... a residential building... which is his own.

Admittedly the respondent is the owner of the non-residential building which is under a key loan with the Canara Banking and Industrial Syndicate.

The goods stocked in the godown are given as security for the loan taken by the respondent in the course of his business. The respondent

continues to be the owner of the building and can get the same released by discharging the loan. Can the landlord in such circumstances say that he

has no other building of his own simply because the building is now under the control of the Banking Syndicate? Is it necessary that he should be in

actual occupation of the building or is it enough for the tenant to show that the landlord owns another non-residential building of his own wherein he

can carry on business? It cannot be said that the Banking Syndicate is in actual occupation of the building. It is only interested in the goods inside

the godown. The landlord continues to possess the animus possidendi. The building may be out of his control for the time being, but it is capable of

being brought under his control the moment he discharges the loan. He has still got legal possession of the building, though physical possession is

suspended for the time being. The Banking Syndicate can exercise only a limited right over the building based on the pledge of the goods stocked

inside the building.

The term ""occupation"" is not defined in the House Rent Control Act and it seems to have a wider significance than residence. In Emperor v.

Taylor 10 Bom. L.R. 38, the question as to how the word ""occupation"" in the Factories Act has to be construed arose for consideration and

Chandavarkar, J., observed:

What is an occupation is a question of fact in each case to be determined with reference to some wall known principles of law. The learned

Magistrate, who has made the reference, seems to think that the legal meaning of occupier is a person who is in actual possession. But a person

may occupy or possess a land or building actually or constructively.

In Dr. Md. Ibrahim v. Syed Ahmed Khan (1950) 1 M.L.J. 552=63 L.W. 410, a Bench consisting of Rajamannar, C.J., and Somasundaram, J.,

had to construe the word ""occupying"" in S. 7 (3) (a) of the Madras Buildings (Lease and Rent Control) Act, XV of 1946. In that case the landlord

sought eviction of the tenant under S. 7 (3) (a) on the ground that he required the building for his own occupation. It was contended by the tenant

that the landlord was in possession of another building of his own and that the application was not maintainable. In the course of the enquiry it was

found that the landlord had another house of his own wherein his second wife was residing with her parents and others. The landlord himself was

residing in a rented house with his first wife and he used to go and stay with his second wife sometimes and sometimes both wives stayed together.

At the time of the application, he was staying in the rented house with his first wife as there was misunderstanding with his second wife. On the

above facts the learned Judges had to consider whether it could be said that the landlord was not occupying a residential building of his own. They

held that the test in such cases is whether if the landlord desires he cannot at any time go and reside in the building. They further observed as

follows:

Now in the present case the house in which the second wife is residing is certainly a house which he can go to reside in at any time he chooses. His

wife and his wife''s parents are residing there, because he has permitted them to reside. If this construction were not to be accepted and actual

physical residence at the time of the application in the test, then, the consequences are startling. A man may have five houses and four children. He

can arrange for each of his children to reside in each of the four houses without his residing in any of them and apply for eviction of the tenant

occupying the fifth house. Such a contingency could not have been contemplated by the Act.....

Applying the same principle to the facts of this case, the landlord can pay off the loan to the Banking Syndicate at any time and get the non-

residential building now under its control and carry on his business there. If we hold that the landlord is not in possession of any other non-

residential building simply because it is under a key loan with the Banking Syndicate, the consequences will also be ""startling"", as pointed out by the

learned Judges in the cases referred to above.

I therefore set aside the orders passed by both the Subordinate Judge and the District Judge, and restore the order passed by the Rent Controller

dismissing the petition of the landlord. The civil revision petition is accordingly allowed. But, in the circumstances each party with bear his costs

throughout.