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Judgment
M/ s Abdul Ahad Wani and Manzoor Ahmed Wani have filed this Appeal against the 4th Additional District Judge, Srinagar's Decree of July
24, 2001, on respondents predecessorininterest's Suit, for Declaration, Possession, Mesne Profits and Rendition of Accounts, directing the
appellants to handover the vacant and peaceful possession of the suit shop situated at Lal Chowk, Amirakadal Road, Srinagar, to the plaintiff and
for Compensation at the rate of Rs. 3,000/ per month from April, 1996 onwards, till vacation of the shop.
Respondents too have filed Cross Objections, supporting the Decree besides seeking additional Preliminary Decree for assessment of Mesne
Profits at the rate of Rs. 10, 000/ per month.
Facts leading to the filing of the Appeal, may be stated thus:
A Shop measuring 360 Sqft at Lal Chowk, Amirakadal Road, Srinagar, where the appellants are running business under the name and Style of
Shoe Shoppe"", is stated to have been given on Licence to the appellants by a written and registered Licence Deed of June 18, 1990, for a period
of three years at monthly licence fee of Rs. 425/ , by Ghulam Abass Ratherplain tiff, the predecessorininterest of the herein respondents. He is,
however, stated to have been, under duress, later made to accept monthly licence fee of Rs. 450/, in terms of an unregistered Licence Deed of
December 03, 1993.
Pleading appellants possession over the suit shop after March 31, 196 unauthorised, the plaintiff filed a suit, seeking reliefs, summary whereof,
for facility of reference, is reproduced hereunder:
a) Decree for declaration that the plaintiff was the owner of suit shop/premises 360 sqft.
b) Mandatory Injunction, directing the defendants to restore quiet, peaceful and vacant possession of the suit shop.
c) A decree for damages at the rate of Rs. 5000/ per month as mesne profit from April 01, 1996.
d) A decree for appropriation of each day huge profits, derived by the defendants from unauthorised and illegal occupation and use of the suit
shop.
e) A preliminary decree in terms of the relief clauses ( c and d).
f) Costs of the suit.
The plaintiff had sought Decree against the appellants on the ground that they were in unauthorised occupation of the shop, which was required
by him for his own and his dependents' necessity, additionally urging that the appellants were not entitled to the protection of the Jammu and
Kashmir Houses and Shops Rent Control Act, 1966, because their monthly income was more than Rs. 4, 000/.
The appellants, pleaded that they had entered into a partnership with the erstwhile tenant in the Suit Shop and on its dissolution, had retained the
possession of the shop as tenants thereof. The plaintiff had thereafter riled a Suit against the original tenant, which was, however, later
compromised, And, in terms thereof, a fresh Lease came into being acknowledging them to be plaintiff's tenants in the shop for a period of three
years, at the monthly rental of Rs. 400/. They invested huge money in renovating the shop and after the expiry of the initial period of Lease, it was
further renewed upto March 31,1990, when the rent of the shop was mutually agreed to be Rs. 425/ per month. Referring to the terms of the
Lease Deed and the conduct of the parties, the appellants pleaded the Lease interparties, Perpetual in nature.
Contesting plaintiff's entitlement to Decree in the suit, the appellants pleaded protection of the Jammu and Kashmir Houses and Shops Rent
Control Act, projecting their status in the shop as that of a tenant and not as Licencee, as alleged by the plaintiff.
The trial Court accordingly, put the parties to issues, which are reproduced as under :
Whether the defendants have taken suit shop on licence through written licence deed dated 18061990 for three years? OPP
Whether the Plaintiff under duress was made to accept on 3121993 the licence fee of Rs. 450/ per month? OPP
Whether the defendant is in illegal possession of the suit shop? OPP
Whether the plaintiff is entitled to Rs. 5000/ per month as mesne profit? OPP
Whether the provisions of Rent Control Act have no application to suit property, if so how? OPP
Whether the court has no pecuniary jurisdiction to try the suit? OPD
Whether the suit has been wrongly valued? OPD
If Issue No. 1 and 2 are not proved, whether defendants have executed lease deed with plaintiff which is subsisting? OPD
What are the comparative advantage and disadvantageous of the parties in case of ejectment? OPD
Whether the defendants have invested huge amount in renovation of suit property if so, what is its effect? OPD
Whether the defendants are depositing the rent before the Rent Controller Officer? OPD
Whether the deed dated 18061998 Annexure P1 was lease in perpetuity? OPD
Whether the plaintiff has no cause of action? OPD
Whether the defendants are entitled to continue to remain in possession of the suit property as tenants? OPD
Reliefs.
Besides appearing as his own witness, the plaintiff examined Abdul Gani Nigroo, Ghulam Mohd. Sheikh, Ghulam Rasool Rather and Mohd.
Yasin Sunkar, as his witness, whereas the defendants, besides examining themselves produced Mohd. Muteem Wani, Sheikh Riyaz and Haji
MehrajudDin as their witnesses.
After appreciating the evidence of the parties and considering the material on its records, the trial Court came to the following conclusions:
i) The relationship between the parties to the suit, visavis the suit shop, was that of the Landlord and tenant.
ii) The Lease between the parties was not Perpetual but was for the period fixed in the last Lease Deed between the parties.
iii) The appellants' possession over the shop, after the expiry of the period of Lease, was unlawful and unauthorised.
iv) The income of the appellants was Rs. 60, 000/ per annum.
v) The appellants had spend huge amount of money in the renovation of the shop.
vi) The appellants were liable to pay compensation of Rs. 3, 000/ per month to the plaintiff, until the shop was vacated by them.
Based on the aforementioned findings, the trial Court decreed the plaintiff's Suit, deciding Issue No's. 1, 2 and 8 against the plaintiff and \ssue
No's. 3, 4 and 5 in his favour, besides issue No's 6,7, 9, 11, 12, 13 and 14 against the appellants.
Questioning the findings of the trial Court on the issues decided against them and in favour of the plaintiff, the appellants' learned counsel urged
that the finding of the trial Court holding that the appellants were not entitled to the protection of the Jammu and Kashmir Houses and Shops Rent
Control Act, was illegal and unwarranted, as the plaintiff had failed to prove that the appellants' Annual income exceeded Rs. 60, 000/ as
contemplated by Section 1 (3) (iii) of the Jammu and Kashmir Houses and Shops Rent Control Act.
He next contended that the trial Court's findings on Issue No. 3 that the appellants' possession over the shop was unauthorised, too was illegal,
even if one were to consider the applicability of the provisions of the Transfer of Property Act to the lease in question, in view of the position
admitted by the plaintiff that he had been receiving Rs. 450/ from the appellants, after the expiry of period fixed in the Deed, which the plaintiff had
claimed to be the Licence Fee and the appellants would call it as rent. Having accepted rent from the appellants, after the expiry of the period of
Lease, the appellants' status was that of a. tenant Holding Over and not of an unauthorised occupant, as held by the trial Court, argued the learned
counsel.
Respondents' learned counsel, on the other hand, while supporting the findings of the trial Court on the issues decided in favour of the
respondents and against the appellants, And defending the Decree, prayed for modification therein to the extent of raising the quantum of Mesne
profits to Rs. 10, 000/ per month, relying on the Written Submissions and the case law cited therein, to support the respondents' submission that
after the determination of three year's period as indicated in the unregistered Lease Deed, the appellants were under an obligation to deliver vacant
and peaceful possession of the Suit shop to the respondents in view of the provisions of Section 111 of the Transfer of Property Act.
I have considered the appellants' counsel's submissions and gone through the Written Submissions filed by the respondents' Advocate.
The findings of the trial Court on Issue Nos. 1 and 2 that the appellants had obtained the Suit shop on Lease for a fixed period, and not on
licence, as alleged by the plaintiff, is supported by the Compromise Deed, which the parties had entered into in the plaintiffs earlier Suit against the
appellants, being Suit No. 181 of 1984, wherein the appellants had been acknowledged by the plaintiff as his tenants in the suit shop, and by the
subsequent two Lease Deeds, one registered with SubRegistrar, Srinagar and the other, an unregistered one, admitted to have been executed by
the plaintiff. The contents of both these Lease Deeds, demonstrate unmistakably that the relationship between the parties visavis the Suit shop was
that of the Landlord and Tenant.
Even otherwise there is abdunant evidence on the records to support the trial Court's finding that the relationship of the parties in respect of the
Suit shop was that of a Landlord and Tenant. This apart, the respondents do not dispute this finding of the trial Court in the Written Submissions.
Even otherwise, finding no material on the records in support of the plaintiffs' plea that the appellants were Licensees in the Suit shop, I find the
trial Court's finding on issue Nos. 1 and 2 well merited.
In view of the above finding of the trial Court on the two issues aforementioned, the controversy between the parties has been narrowed down
in view of the provisions of the Jammu and Kashmir Houses and Shops Rent Control Act, 1966, hereinafter to be referred as ""the Act"", for short.
This is so because the non obstante clause with which Section 11 of the Act, opens, governs the eviction of the tenants of the Houses and
Shops, notwithstanding anything to the contrary contained in any other Act, Law, Order or Decree, meaning thereby that notwithstanding anything
contrary contained in the provisions of the Transfer of Property Act, the eviction of the tenants, including those whose tenancy has expired, by
afflux of time, would be governed by the provisions of the Act, provided, however, the Act was not otherwise inapplicable to the tenancy.
The question that therefore needs to be examined in the first instance, is the plaintiffs pleas that the appellants were not entitled to the protection
of the Act.
To determine the question aforesaid, the finding returned by the trial Court on Issue No. 5, that the provisions of the Act had no application to
the tenancy in question, needs to be noticed.
While dealing with the issue, the trial Court has noticed that though the plaintiff had not brought any evidence on records to prove that the
Annual income of the appellants exceeded Rs. 60, 000/, yet influenced by the fact that the employees of the defendants were getting Rs.1500/ to
2000/ per month as salary and the shop had a telephone facility too, so in the absence of any evidence by the appellants that their income was not
more than Rs. 60, 000/ per annum, the income had to be presumed to be more than Rs. 60, 000/ per annum.
Concluding portion of the finding of the trial Court, in this respect, reads thus:
As already mentioned hereinabove cogent evidence on this issue is lacking. But the court has to take note of the fact that it was not easy for the
plaintiff to produce cogent evidence regarding this issue. After all what is the annual income of the defendants will be very well known to the
defendants alone or those who keep their accounts. It was very difficult for the plaintiff to arrange for such an evidence. This being a civil case, the
issues are to be disposed of on the basis of prepondrance of evidence. As already mentioned hereinabove the statement of the defendants is
enough to presume that the net annual income of the defendants is more than Rs. 60, 000/ per annum in the case in hand.
Therefore, it is held that the provisions of Houses and Shops Rent Control Act have no application to the suit property.
To examine as to whether or not the aforementioned finding of the trial Court that the appellants' Annual income was more than Rs. 60, 000/,
could be sustained in the absence of requisite evidence, proving as a fact, the appellants' income as aforementioned, reference needs to be made to
what was held by this Court while dealing with a similar question in Mohd. Ashraf Ahanger Vs Ghulam Mohd. Shah and ors. Reported as AIR
1982 Jammu and Kashmir 11, where it was held as follows:
Subsection (1) of Section 11 of the Act reads as under : (1) Protection of a tenant against eviction.(1) Not withstanding anything to the contrary in
any other Act or law, no order or decree for the recovery of possession of any house or shop shall be made by any court in favour of the landlord
against a tenant, including a tenant whose lease has expired"".
On its plain terms, every suit for ejectment of a tenant, irrespective of what is contained in any other Act, law, order or decree of any court, shall
be governed by the Act, and a decree for ejectment of the tenant would be passed only on anyone or more the grounds mentioned in this section.
The Act is obviously a special legislation in so far as ejectment of tenants is concerned. It will thus clearly override the general provisions of
ejectment of tenants contained in the Transfer of Property Act on the principle generalia specialibus non derogant. Once it is shown that the Act
applies to the area in which the suit property is situated, the case would be presumed to be governed by its provisions, unless it is shown by the
party interested in excluding its application that either the property or the tenant falls under the exemptions contained in subsection (3) of Section 1
of the Act. There can be no quarrel the proposition propounded by Mr. Tassaduque that exception or exemption has to be pleaded and proved by
the party who wants to take benefit of the same. But, the question that still remains to be answered is: who is to plead and prove the exemption
contained in subsec. (3) to his benefit in a suit for ejectment? The answer is that the exemption has to be pleadea and proved by the plaintiff who
wants to exclude the application of the special provisions of the Act which indubitably abridges his right to evict his tenant, so as to bring his case
within the four corners of the Transfer of Property Act. It is the landlord and not the tenant who would be benefited on proof of the exemption. In
the instant case, much less to speak of its proof, not even a pleading has been made by the plaintiffs/respondents that the suit is not governed by
the provisions of the Act, and if so how. On the other hand, the averments made in the plaint clearly indicate that the respondents themselves
treated the suit as one governed by the provisions of the Act. A similar view was taken by one of us (Kotwal.J) in 1980 Srinagar LJ 145.
Another question which needs to be considered before coming to the point in issue, is as to what the expression ""Net Income"", appearing in
the explanation appended to Section l(3)(iii) of the Act, means. The question is no longer res integra and stands explained by this Court in Union of
India Vs Narain Singh and Ors. reported as AIR 1976 J&K 5, where while dealing with the question, this Court had held as follows:
It remains now to be seen as to whether the Union of India can invoke cl. (iii) of Section 1 (3) of the Act. It is wellsettled that the net income as
contemplated by the aforesaid cl. (iii) of Section 1(3) of the Act means the income that remains with a tenant after compulsory deduction, say, for
instance, by way of tax, or the income which remains after deducting from the total receipts the capital invested and the expenses incurred to
secure the total receipts, depending on whether the tenant belongs to a fixed income group as in the former case or to a business community as in
the latter case. No material has been placed before us to show that the net income of the Union of India does not exceed Rs. 20, 000/. In this view
of the matter, the appellant cannot take advantage of cl. (iii) of Section 1(3) of the Act. We are fortified in this view by an unreported decision of a
Division Bench of this Court in Civil first Appeal No. 3 of 1973 entitled Rawel Singh Vs. Union of India, decided on May 2, 1974.
In the result the appeal fails and is hereby dismissed, but without any order as to costs.
In view of the above mentioned legal position, demonstrated by the law laid down by this Court, a Landlord, desirous of establishing the
inapplicability of the Act to a tenancy in respect of a house or a shop, is required to prove that the ""Net Income"" of the tenant i.e. the income which
remains with him after compulsory deductions under any law for the time being in force, and the expenses incurred to secure the total receipts, was
more than the limit prescribed in Section l(3)(iii) of the Act, which according to the amended law is Rs. 60, 000/ per annum. He is additionally
required to prove that such Net Income was for a period of 12 months commencing from the month of tenancy and immediately before the filing of
the suit.
It is seen that though the plaintiff had pleaded that the Annual income of the appellants was more than Rs. 12.00 lac, yet no evidence was led
by him in this behalf to prove that the Net Income of the appellants, as contemplated by Section 1(3) (iii) of the Act, within 12 months immediately
before the filing of the Suit, commencing from the month of the tenancy, was more than Rs. 60, 000/.
Omission of the appellants to indicate in their statements as to what was their annual income, would not, in my opinion, raise any such
presumption, as has been drawn by the trail Court, in holding that their net annual income was more that Rs. 60, 000/. The plaintiff does not even
otherwise, appear to have been eager to prove the appellants' net annual income as contemplated by the provisions of the Act and probably for
this reason, had opted not to compel production of the appellants' records or otherwise proved, from other sources, as required by law, the net
annual income of the appellants.
The finding of the trial Court on Issue No. 5 holding the appellants' income more than Rs. 60, 000/ per annum and them disentitled to the
protection of the Act, based on presumption, without being supported by requisite evidence to sustain it , is thus unwarranted and needs to be
reversed.
Accordingly, reversing the finding of the trial Court, Issue No. 5 is decided against the plaintiff and in favour of the appellants holding that the
appellants are entitled to the protection under the Act. All the pleas raised by the plaintiffrespondents in their Written Submissions and in support of
the Decree and judgment appealed against, on the ground that after the expiry of the period of lease, the appellants' possession over the premises
were unauthorised and they were liable to handover the possession of the shop to the plaintiff, therefore, fall, in the light of the Non obstante clause
appearing in Section 11 (1) of the Act, in terms whereof the plaintiff was disentitled to maintain the suit to seek appellantstenant's eviction on
grounds other than those prescribed under Section 11 of the Act. Section 11 of the Act is reproduced hereunder, for reference:
Protection of a tenant against eviction. ,
Notwithstanding anything to the contrary in any other Act or law, no order of decree for the recovery of possession of any house or shop shall
be made by any Court in favour of the landlord against a tenant, including a tenant whose lease has expired:
Provided that nothing in this subsection shall apply to any suit for decree for such recovery of possession
(a) against a tenant who has transferred his tenancy right to whole or in part with possession otherwise than by sublease;
(b) against such transferee;
(c) against a tenant who has sublet whole or a major portion of the house or shop for more than seven consecutive months:
Provided that if a tenant, who has sublet major portion of the house or shop, agrees to possess as a tenant the portion of the house or shop not
sublet' on payment of rent fixed b the Court, the Court shall pass a decree for ejectment from only a portion of the house or shop sublet and fix
proportionately fair rent for the portion kept in possession of such tenant, which portion shall thenceforth constitute house or shop under clause (3)
or clause (5) of section 2 and the rent so fixed shall be deemed fair rent fixed under section 8;
[Provided further that no order or decree for the recovery of possession shall be made in favour of the landlord if the tenant has sublet the house or
shop or portion thereof with the written constent of the owner;]
(d) where the tenant has done any act contrary to the provisions of clause (m), clause (o) or clause (p) of section 108 of the Transfer of Property
Act, 1977;
(e) where the tenant has been using the house or shop or any part or allowing the house or shop or any part to be used for immoral or illegal
purposes;
(ee) where the tenant fails to use or occupy the house or shop for a period of not less than seven consecutive months ;)
(f) where the condition of the house or shop has materially deteriorated owing to acts of waste by, or negligence or default of the tenant, or of any
person residing with the tenant or for whose behavior the tenant is responsible;
(g) where the tenant has been guilty of conduct which is a nuisance or annoyance to occupiers of adjoining of neighboring houses and shops,
including the landlord;
(h) where the house or shop is reasonably required by the landlord either for purposes of building or rebuilding, or for his own occupation or for
the occupation of any person for whose benefit the house or shop is held:
Provided that all subtenants in the house or shop are made parties to the suit and allowed opportunity of contesting claim to decree for ejectment.
Explanation. The Court in determining the reasonableness of requirement for purposes of building or rebuilding shall have regard to the
comparative public benefit or disadvantage by extending or diminishing accommodation, and in determining reasonableness of requirement for
occupation shall have regard to the comparative advantage or disadvantage of the landlord or the person for whose benefit the house or shop is
held and of the tenant:
Provided that where the Court thinks that the reasonable requirement of such occupation may be substantially satisfied by evicting the tenant from a
part only of the house or shop and allowing the tenant to continue occupation of the rest, and the tenant agrees to such occupation, the Court shall
pass a decree accordingly and fix a proportionately fair rent for the portion in occupation of the tenant, which portion shall henceforth constitute the
house or shop within clause (3) or clause (5) of Section 2 and the rent fixed shall be deemed to be the fair rent fixed under section 8;
(i) subject to the provisions of Section 12, where the amount of two months rent legally payable by the tenant and due from him is in arrears by not
having been paid within the time fixed by contract, or in the absence of such contract by the fifteenth day of the month next following that for which
the rent is payable or by not having been validly deposited in accordance with Section 14:
Provided that no such amount shall be deemed to be in arrears unless the landlord on the rent becoming due serves a notice in writing through Post
Office under a registered cover on the tenant to pay or deposit the arrears within a period of (thirty) days from the date of the receipt of such
notice and the tenant fails to pay or deposit the said arrears within the specificied period;
(j) where the house was let to the tenant for use as a residence by reason of his being in the service or employment of the landlord, and the tenant
has ceased to be in such service or employment:
Provided that where the tenant is a workman who has been discharged or dismissed by the landlord from his service or employment in
contravention of the provisions of the Industrial Disputes Act, 1947, he shall not be liable to be evicted until the competent authority under that Act
confirms the order of discharge or dismissal made against him by the landlord;
(k) where the house or shop is required for the immediate purpose of demolition ordered by any local authority or other competent authority.
In view of the provisions of Section 11 of the Act, the plaintiff could succeed in appellants' eviction from the suit shop only if he had pleaded
and proved any one or the other grounds mentioned in the above quoted Section.
Having failed to plead that the suit shop was reasonably required by him and the parties having not been put to any such issue for determining
the reasonable requirement of the plaintiff for his use and occupation of the suit shop, as contemplated by Section 11 (h) of the Act, the finding of
the trial Court on issue No. 9, that the comparative advantage was in favour of the plaintiff is unjustified, in the absence of any determination by the
Court as to whether the suit shop was reasonably required by the plaintiff for his own occupation.
In any case the finding returned by the trial Court on Issue No. 9, has been even otherwise, rendered meaningless, in view of the plaintiffs
death during the pendency of the litigation.
This apart the plaintiff, as his pleadings so indicate, had not sought the appellants' eviction under Section 11 (h) of the Act and had rather
claimed it merely because he was the owner of the Suit shop, supporting his claim on the strength of the provisions of the Transfer of Property Act
which as held above, were not applicable to the tenancy in question which was governed by the provisions of the Jammu and Kashmir Houses and
Shops Rent Control Act.
In above view of the matter, the Decree passed by the trial Court for appellants' ejectment from the Suit shop and Mesne Profits, on the
ground that the appellants, because of the expiry of the term of their Lease, were in unauthorised occupation of the Shop, on the basis of the
findings returned on Issue Nos. 3, 4,5,9,11,13 & 14, cannot be sustained, being unwarranted and against the provisions of Section11 of the
Jammu and Kashmir Houses and Shops Rent Control Act.
Findings of the trial Court on Issue Nos. 3, 4,5,9,11,13, and 14 is, accordingly, set aside and reversed.
For all what has been said above, appellants' appeal, therefore, succeeds and is, accordingly, allowed. Decree dated July 24, 2001 of Learned 4th
Additional District Judge, Srinagar is, therefore, set aside directing dismissal of the respondentsplaintiff's Suit against the appellants, with costs
throughout.
36.Resultantly, respondents' Cross Objections shall stand rejected.
Registrar to draw Decree.