Ideal Charitable Hospital Trust vs Madan Gopal

Dua, J.—These two revisions (Civil Revisions No. 201 of 1964 and Mo. 259 of 1964) u/s 15 (5) of the East Punjab Urban Rent Restriction Act, 1949, (East Punjab Act No. 3 of 1949), raise common point and are, therefore, being disposed of together, Indeed it is conceded that they stand or fall together and arguments have been addressed only in Civil Revision No. 201 of 1964.

The petitioner, the Ideal Charitable Hospital Trust, was created on 7th of February, 1958. Madan Gopal respondent was a tenant in the house in dispute on a monthly rent of Rs. 50/- The petitioner Trust, through its President. Shri Chaman Lal, presented an application u/s 13 of the Act for the eviction of Madan Gopal in July 1961, alleging that he was liable to be evicted on the ground of non-payment of rent from 1st of July 1960 to 30th of June, 1961, for using the premises for a purpose other than that for which they had been let and for parting with possession of the residential portion of the house.

This application was resisted by the respondent on various grounds, including the contention that the application had not been filed by a duly authorized person The petitioner, according to the tenant-respondent, had been unwilling to accept the rent due, with the result that the same was deposited in the State Bank of India under orders of the Senior Subordinate Judge. Rent for three months from April to June 1961-was tendered in Court. Conversion of user, according to the tenant''s plea, could not be taken up as a ground for ejectment, because a similar plea had been previously adjudicated upon between the parties. Parting of possession on the part of the tenant was denied.

On the pleading of the parties the following issues were settled:

Whether the Trust can apply through Shri Chaman Lal President ?

Whether the respondent is not liable to be ejected on the ground of default of payment of rent ? and

Whether the other grounds mentioned in the application are barred u/s 14 of the Rent Restriction Act ? It may be pointed out that issue No. 2 had been framed differently in the first instance, but was later modified in the present form.

Two further issues were added by Shri Harbans Singh, Rent Controller, on 30th of May, 1962:

Has the respondent converted the user of the premises from the purpose for which these were let? and

Has the respondent parted with possession of part of the premises, as alleged ? If so, when and with what effect ?

The first issue was decided in favour of the Trust find on issue No. 2 the Rent Controller came to the conclusion that the respondent was liable to be evicted on the ground of non-payment of rent. The Rent Controller has observed during the discussion on this issue that no rent had been paid outside the Court and deposits were made in the Court of the Senior Subordinate Judge in the name of eight trustees and Mohan Lal. Mohan Lal was not a trustee and the respondent had knowledge of this fact. The deposits having been made in his name also, they were not valid. It is also clear from the judgment of the Rent Controller that in a previous litigation for the eviction of the respondent nine petitioners including Mohan Lal, had applied for the purpose and it was stated therein that Mohan Lal was entitled to rent for 1st of January to 1st February 1958 only, which was before the creation of the Trust. The Rent Controller, however, in addition to this finding has also observed that in accordance with the judgment of a learned Single Judge of this Court deposit with the Senior Subordinate Judge under the Punjab Relief of Indebtedness Act, 1934, (Punjab Act No. 7 of 1934), could not be considered to be a valid tender u/s 13(2)(i) of the Rent Restriction Act On this basis the respondent was held liable to be evicted. Issue No. 3 was also decided against the respondent. The two additional issues were, however, decided against the petitioner. In the final result the order of eviction was passed.

On appeal the Appellate Authority reversed this order. It appears that in the meantime a Division Bench of this Court in Mam Chand v. Chhotu Ram etc. (1964) 64 P.L. R. 93 had authoritatively decided that a person who owes money could deposit the same in Court in full or part payment to his creditor and that such deposit in Court is tantamount to payment having been made to the creditor. A tenant, therefore, who deposits in the Court of the Senior Subordinate Judge u/s 31 of the Punjab Relief of Indebtedness Act, 1934, a part of the rent due from him to the landlord sufficiently complies with the terms of the East Punjab Urban Rent Restriction Act. On this point, therefore, the Appellate Authority reversed the decision of the Rent Controller. In so far as the question of the deposits in the name of the eight trustees and of Mohan Lal is concerned, the Appellate Authority observed that Mohan Lal had gone through the formality of creating a trust, but his intention in doing so had been the subject matter of comments by the Courts in previous litigation and it had been held by the Appellate Authority in the earlier litigation that the Trust had been created by Mohan Lal only with the object of securing the ejectment of the tenants and there was no real intention on the part of the trustees to run a hospital in the premises and that no funds had been provided or arranged for the so-called charitable purposes of the Trust. It had further been observed that there was no specific scheme for the running of the hospital and the only objective of the Trust was to have the tenant ejected. These observations, it appears, were approved by this Court in the earlier litigation and reference was made by the Appellate Authority to the judgment in the previous case reported as Siri Kishan, etc. v. Ghanesham Dass (1962) 64 P.L.R. 1141. The Appellate authority also seems to have taken the view that the Trust was to all appearance a colorable transaction made with ulterior motive and Mohan Lal''s conduct after creating the alleged trust also showed that he was retaining interest in the property after its creation. It was illustrated by stating that Mohan Lal had joined the trustees in the filing of the previous ejectment application and continued to take interest in the litigation even after the tenant had paid all the arrears of rent and costs, etc, on the first hearing in the earlier case. Mohan Lal''s conduct throughout was construed by the Appellate Authority to suggest that he was still exercising control over the Trust property and had been realising its rent up to the 30th of June, 1960. The tenant had also been saying in his applications (Exhibits R. 3 to R. 7) u/s 31 of the Punjab Relief of Indebtedness Act that though Mohan Lal alleged that he had created a trust in favour of the other eight trustees, he never admitted that fact to be correct, and since the rents had to be paid and the trustees as well as the original landlord were refusing to accept payment he had no other option but to deposit rent in Court for payment to the trustees, if the original landlord was found to have no further interest in the property. In view of the indefinite position regarding the genuineness of the Trust and the findings of the Courts and the cm-duct of the original landlord and the trustees, the Appellate Authority felt that it would have really been unsafe for the tenant to deposit the rent in favour of the Trust alone, because the original landlord could easily have turned round and said that in view of the findings of the Courts in previous ejectment proceedings the Trust had been found to be a colorable transaction and that the tenant was still liable to pay rents to him. The Appellate Authority very strongly disapproved of the Rent Controller''s view, observing that -

The Courts would be failing in their duty if they defeat the object with which the'' Rent Act was brought on the Statute Book and allow such tactics of rapacious landlords to succeed to dislodge a tenant supposed to enjoy a certain protection under the law.

On the other ground of eviction also the Appellate Authority decided against the Trust with the observation that it was common ground between the parties that the building had originally been used by the tenant both for business and residential purposes and so long as the building was being put to any of these two uses there could be no conversion of user, If the tenant has taken residence somewhere else and continues to carry on his business in the premises in dispute and has not parted with possession of any portion of the building, then it was not possible to hold the tenant to have become liable to eviction on those grounds. With these findings the appeal was allowed and the application for ejectment was dismissed. It may be mentioned that there was a cross appeal by the Trust which inevitably failed on account of the acceptance of the tenant''s appeal.

On revision, Shri Bhagirath Dass, the learned counsel for the petitioner, has stated all the facts in a very fair and frank manner, and has submitted, to begin with, that in a "non-residential building" as defined in section 2(d) of the Rent Act residence can only be for the purpose of guarding it and if the residence be for some other purpose then the "nonresidential building" must be considered to have been converted into a "residential building." He has in this connection drawn, my attention to the definition of "non-residential building" in section 2(d), according to which it means a building which is being used solely for the purpose of business or trade. There is a proviso, according to which residence in a building only for the purpose of guarding it should not be deemed to convert it into a "residential building." The counsel has also referred me to Exhibit A. 6, dated 9th of October, 1958, and has stressed that the building in question is now being used as a non-residential building in as much as it is being used for business and trade and not for residence. After reading out the relevant portions of the application for eviction and the written statement, he has very strongly argued that the building had been let out both for purposes of residence and hosiery business, but now the premises have been converted into exclusively non-residential building, thereby rendering the tenant liable to eviction u/s 13(2) (ii)(b) of the Rent Restriction Act. It may here be pointed out that Exhibit A. 6 is a copy of a written statement by Madan Gopal son of Kala Ram (respondent in this Court) dated 9th October, 1958 in which it was pleaded that the building in question was a non-residential building which was being used for the business of hosiery alone and it was not residential. In the application for eviction dated 14th June, 1961, it has been asserted in paragraph 2 that the house was rented out as residential premises only and this paragraph has apparently been admitted in the written statement to be correct. In paragraph 3(b), it has been asserted that the respondent is using the building for a purpose other than for which it was leased and that the house had been let out for residential and hosiery business whereas the respondent has "converted the building to a non-residential use only". In the written statement, it has been pleaded in answer to this averment that this ground is not now available to the applicant who has suppressed the previous abetment proceedings, a revision out of which is still pending in the High Court. The learned Rent Controller and the Appellate Authority have decided this question against the landlord-petitioner in this Court. The Rent Controller has observed that the change that has come about in the use of the premises is that the tenant who also resided in a portion of the premises has taken up residence in a separate place. The premises were, however, not let out for residential purposes only, with the result that there was no conversion of user, the tenant being still in occupation of the entire premises, though for purposes of business only. The learned Appellate Authority has also while dealing with this question observed that this ground appears to have been fully thrashed out in the previous proceedings as well and that so long as the building was being put to any of the two uses, namely, business and residence, there could be no conversion of user. My attention has, however, not been drawn to any special portion of a previous order which dealt with this precise aspect. But be that as it may, I think it is desirable to deal with this argument as put before me.

A "non-residential building", as noticed earlier, means, according to the statutory definition, a building used solely for the purposes of business or trade and a "residential building" means any building which is not a non-residential building, whereas a "scheduled building" means a residential building which is being used by a person engaged in one or more of the professions specified in the Schedule to the Rent Act, partly for his business and partly for his residence. It is nobody''s case in the present controversy that the building in question is a scheduled building. The petitioner''s argument is a very short one. He says that as the building when initially let out was used both for purposes of residence and hosiery business and was thus not a non-residential building, it must be considered to be a residential building. By using it now solely for the purposes of business, the tenant has without the written consent of the landlord started using it for a purpose other than that for which it was leased, thereby attracting section 13(2)(ii)(b) of the Rent Act. The argument, as rut, is prima facie attractive and plausible, but a little deeper probe and scrutiny would show that the matter is perhaps not so simple as it is put. The language used in section 13(2; (ii)(b) seems to prohibit the conversion of user of the building to a different purpose without the landlord''s written consent, the object apparently being to protect the property from being spoiled or damaged by using it for a purpose for which the landlord would perhaps have not agreed to lease. Now the clause in question of section 13(2) does not in terms say that if a residential building, as defined, is converted into a non-residential building, then the tenant exposes himself to the risk of being ejected. A residential building includes two purposes, namely, of residence and business or trade. If it is used for one of those two purposes, then the question arises: Does the cession of one of the two purposes also attract the operation of this clause? or is the prohibition contemplated in the clause in question; only confined to the user for a new purpose unknown to the landlord? This question does not seem to me easy to answer in the abstract and may require an investigation into the further question as to what was the dominant purpose for which the building is leased If the building is mostly residential, but a part of it is capable of being used for some business or trade as well, and it was leased with that intention and for such combined double-purpose, then using; it solely and exclusively for business or trade may fall within the mischief contemplated by section 13(2)(ii)(b); but if the building was leased out mainly for the purposes of business or trade and residence in it (not only for guarding it within the contemplation of the proviso to clause (d) of section (2) was also allowed and the building was a residential building in this sense, then ceasing to use it for the residence may not reasonably be hit by section 13(2)(ii)(b) It appears to me that this aspect has not been properly and fully adverted to either by the Rent Controller or by the Appellate Authority. The statutory definition of "non-residential building" and the negative conception of the definition of "residential building" does not, in my opinion provide a safe criterion for solving the problem raised in the present controversy. I quite very well visualise a case in which the use of the entire building, including the portion meant for residential purposes, being put to purposes of business and trade may damage that portion, the use of which is so changed so as to bring it within the mischief sought to be guarded against by section 13:2)(ii)(b). I can equally well conceive of a case in which such a use of the entire budding for the sole purpose of business or trade may be wholly innocuous and harmless and unlikely to result in any unusual or unreasonable damage to the portion of which the use has been changed. In the latter case, it would be difficult no bring it within the mischief which the Legislature has presumably intended to guard against by enacting section 13(2)(ii)(b). As I construe the scheme of the Rent Act, it is apparently meant to protect honest and reasonable tenants against the greedy and unscrupulous landlords, but it is by no means designed to seriously affect the legal incidence of the landlord''s title except to the extent that the statute clearly provides: in other words, it does not operate so as to make the tenant the owner of the premises. The Act has, therefore, to be so construed as to harmonies and strike a proper balance between the ownership of the landlord and the protection of the tenant against greed etc. on the part of the former within the discernible legislative scheme and design. The Rent Controllers and the Appellate Authorities are at time apt to ignore the other side of the picture and take a somewhat one-sided view which may give an impression of being inconsistent with and unworthy of a balanced approach of a trained judicial mind. This reflection should, so far as humanly possible, deserves to be avoided.

In the case in hand, the aspect mentioned above, depending as it does on the facts of each individual case, has not been adverted to satisfactorily by the Tribunals below. I would, therefore, like them to send to me a report on this aspect.

In so far as the question of deposit is concerned, a Bench decision of this Court in Khushi Ram v. Shanti Ram, (1964) 66 P. L. R. 765 following an earlier Bench decision of this Court in Mam Chand v. Chhotu Ram1, is against the petitioner. It has, however, been contended that the deposit in the case in hand was not made in favour of trustees only but in favour of the trustees and other person jointly, with the result that the deposit must be held to be invalid.

On behalf of the respondent, it has been argued that the order of the Appellate Authority shows how the author of the trust in the present case has been trying to seek eviction of the tenants and the concession of the Trust is apparently a mere device to secure eviction. It is for this reason that the tenant took the abundant caution of depositing the amount in the name of the author and the trustees with the bona fide desire of making the payment to the right parties. It has also been suggested that the amount has actually been withdrawn by the right party. There is no question of any obstruction having been created by this deposit in the withdrawal of the amount by the party entitled. In any case, on revision, this Court should not interfere on this barest technicality, even if there may be held some irregularity which is not admitted. I may point out that my attention has also been drawn by Shri Har Bhagwan, the learned counsel for the respondent to a decision by my Lord the Chief Justice in Inder Singh v. Kalu Ram'' (1965) 67 P. L. R. 58 according to which change of user of a part of the building does not constitute a ground for ejectment and to a decision by S. B. Capoor, J. in Rameshwar Dass v. Rishi Parkash I. L. R. (1965) P&H. 177 according to the head-note of which if the dominant purpose to which the premises are put remains the same for which the premises had been let out to him, the tenant is not liable to eviction u/s 13(2)(ii)(b) of the E.P. Rent Restriction Act.

In the result, I remit the case to the Rent Controller with a direction that he should express the opinion as to what was the dominant purpose for which premises in question were let out and to what extent the building was being used for business or trade and for residence respectively. The Rent Controller should submit his report through the Appellate Authority who would also express its opinion on this point. The report should reach this Court within three months from today. Parties are directed to appear before the Rent Controller on 19th July, 1965 when a short date for one week should be given to the parties for arguments. As soon as the report is received in this Court, the case should be set down for hearing.