Volta Ltd. vs J.C. Malhotra and Another

D.V. Sehgal, J.—This revision petition by the tenant is directed against the order dated 19th May, 1986 of the learned Appellate Authority, Chandigarh, affirming in appeal the order dated 17th May, 1984 passed by the Rent Controller, Chandigarh, under the East Punjab Urban Rent Restriction Act, 1949, as applicable to Union Territory of Chandigarh (hereinafter referred to as the Act) accepting an application u/s 13 of the Act filed by the landlord Respondents and directing ejectment of the Petitioner from house No. 303, Sector 9-D, Chandigarh.

The Petitioner, a limited Company, took the premises in dispute on rent vide lease deed dated 11th March, 1960 for residence and business. Sarvshri J.C. Malhotra and B C. Malhotra Respondents besides their brother Dr. N. C Malhotra, Major S. C. Malhotra, Ramesh C. Malhotra and Roop C. Malhotra are the owners of the premises. The Respondents filed the application for ejectment of the Petitioner inter alia on the ground that Respondent No. 1 was due to retire on attaining the age of superannuation as Chief Engineer, Beas Sutlej Link Project, Sunder Nagar (Himachal Pradesh) on 30th April, 1982 and wanted to settle permanently at Chandigarh alongwith his wife Smt. Tara Malhotra after surrendering the vacant possession of the Government accommodation allotted to him at Sunder Nagar. Respondent No. 2 stated that he is working as Chief Engineer in Irrigation Department Haryana, and is posted at Chandigarh. Besides his wife he has a grown up unmarried son Vikram Malhotra, who is working as Engineer with M/s Punjab Tractors Limited Mohali, Tehsil Kharar, District Ropar. For want of availability of Government accommodation thus claimed Respondent No. 2, he alongwith his wife and the said unmarried son was occupying a rented accommodation consisting of drawing-cum-dining room, study room, store, 3 small bed rooms with attached toilet, kitchen and garage on the ground floor of House No. 265, Sector 35-A, Chandigarh, at Rs. 1200/- per month exclusive of water and electricity charges. That accommodation was not benefiting their status. Both the Respondents thus stated in their application that they alongwith their families bona fide require the demised premises in question for their own use and occupation.

The claim was contested by the Petitioner inter alia on the ground that the application for ejectment was bad for non-joinder of the other co-owners of the demised premises ; the premises had been let out for residential-cum-business purposes under a single tenancy and as such it was non-residential building and could not be got vacated on the ground of personal necessity. The genuineness and bona fide of the claim made in the application was contested on the ground that the rent of the premises was increased from time to time on the demand of the landlords but their last demand for further increase in rent was not agreed to and as such the application was mala fide. It was also stated that one of the co-owners Dr. N.C. Malhotra had specifically expressed his desire to sell his 1/6th share in the demised house and since he had not been joined as an applicant, the application lacked bona fides. It was further contended that the Respondents were out to sell the demised house and they had also entered into an agreement to sell the same to M/s Onkar Property Dealer and had received a sum of Rs. 40,000/- as earnest money. They wanted vacant possession of the same for its sale. Rejoinder was filed on behalf of the Respondents. The allegations made in the written statement of the Petitioner were contravened and averments made in the petition were reiterated. It was further stated that Respondent No. 1 had already retired from service. He had shifted from Sunder Nagar after surrendering Government accommodation there and had started residing alongwith his wife in a portion of house No. 472, Sector 6, Panchkula. District Ambala, owned by his nephew Major Arvind Malhotra, which accommodation was insufficient for his requirement and he is living there purely at the sufferance of his nephew. He wanted to settle permanently in the house in dispute.

On the pleadings of the parties the learned Rent Controller framed the following issues.

Whether the Respondent is liable to eviction on the grounds alleged in paragraph No. 3 of the petition.

Whether the petition is bad on account of non-joinder of the necessary parties ?

Whether the building in dispute is a non-residential building, if so, its effect ?

Relief.

The learned Rent Controller returned finding on issue No. 1 in favour of the Respondents while issues Nos. 2 and 3 were decided against the Petitioner. As a result the ejectment application was allowed. The learned Appellate Authority affirmed the findings recorded by the Rent Controller on all the issues and dismissed the appeal.

I have heard the learned conusel for the parties at some length. The first contention raised by the learned Counsel for the Petitioner is that residence of Respondent No, 1 with his nephew in house No. 472, Sector 6, Panchkula, is as a licensee. According to him, even a licensee has a right in the property. He relied on a Division Bench judgment in Karnail Singh v. Vidya Devi alias Bedo (1980) 82 P. L. R. 613 and submitted that if the landlord is occupying any other residential building his own rights in the same urban area whether as owner, landlord, tenant, mortgagee with possession or any other recognised mode having right in the property, he would not be able to claim eviction of his tenant from other residential building in the same urban area without alleging and proving anything more There is no force in this submission. The very first ingredient of Sub-clause (b) of Section 13(3)(a)(i) of the Act that the landlord should be occupying any other residential building in the same urban area is absent in this case. Urban estate Panchkula is urban area other than the Union Territory of Chandigarh. So Respondent No 1 can maintain his claim for the bona fide personal necessity with regard to the demised premises. Even otherwise I do not agree with the submission of the learned Counsel that Respondent No. 1 as a licensee in the House of his nephew is living there as of right. There is a well recognised distinction between a lease and a licence. Unlike a lease, a licence does not create any estate or interest in the property to which it relates I find support for this view from Phiroze Bamanji Desai Vs. Chandrakant N. Patel and Others, wherein it has been observed that where a person is in occupation of the other premises on leave and licence, they are obviously not available to the landlord for occupation and cannot be taken into account for negativing the need of the landlord for the premises in question. The claim of Respondent No. 1 that he retired from service, gave up Government accommodation at Sunder Nagar and bona fide needs the premises for his occupation has not been rebutted by any evidence worth the name on the record. I, therefore, affirm the finding recorded by the authorities below that the claim of Respondent No. 1 that ejectment of the Petitioner on the ground of bona fide personal necessity is established.

The learned Counsel for the Petitioner, however, maintained that bona fide need of Respondent No. 2 has not been proved in accordance with law. His first contention is that as laid down in Mohan Lal Jain v. Mohan Lal 1973 RCJ. 249, it was incumbent on Respondent No. 2 to bring clear evidence on the record as to the accommodation in his possession in House No. 265, Sector 35-A, Chandigarh, which he is occupying as a tenant and to establish that the said accommodation is reasonably not sufficient for his needs. To do so it was necessary for him to bring on record a plan of the ground floor of the tenanted house from which alone the extent of accommodation in his possession could be judged. He has further relied upon Karnail Singh''s case (supra) to assert that since Respondent No. 2 is occupying the tenanted premises as of right, he does not satisfy the ingredients of Sub-clause (b) of Section 13(3)(a)(i) of the Act and thus cannot claim the demised premises for his bona fide personal necessity. In my view it is not necessary for me to go into this aspect at all for the reason that afier an elaborate discussion the authorities below have negatived the same Since bona fide personal requirement of Respondent No. 1 has been established an order of eviction has to be passed against the Petitioner. Even if the need of Respondent No. 1 can be satisfied by passing an order of eviction with respect to a part of the demised premises, in law it is not possible to divide the tenancy of the Petitioner qua the demised premises which is in respect of the whole of it as a single unit. The Respondents are, therefore, entitled to an order of eviction with respect to the entire premises.

The learned Counsel for the Petitioner, however, submitted that the material on the record shows that the other co-owners of the house in dispute do not want the same to be vacated by the Petitioner for its occupation by the Respondents. Particular reference was made to a letter dated 20th February, 1982 Exhibit P.W.2/J from Dr. N.C. Malhotra, one of the co-owners, addressed to the Petitioner conveying that neither the Respondents nor any of the remaining co-owners of the house are authorised to act on his behalf and that any action on their part to get the house vacated on his behalf should be treated as wrong and illegal. He informed the Petitioner that if it was interested to purchase his 1/6th share in the demised house, he should be contacted for the purpose. However, a subsequent letter dated 2nd March 1982 Exhibit P.W.2/K from Dr. N.C. Malhotra is to the effect that he had decided to shift his family to the house in dispute and required the Petitioner to vacate the same by Ist April, 1982. He also specifically withdrew his letter Exhibit P.W.2/J. In view of this subsequent letter I do not find that the Petitioner can place any reliance on letter Exhibit P.W.2/J. It is well settled that one of the landlords can maintain a petition for ejectment of the tenant and it is not necessary for him to implead his co-owners in the petition. Therefore, by no amount of reasoning can it be contended that the ejectment application brought by the Respondents was bad on account of the non-joinder of the necessary parties. It is no doubt true that during the course of occupation of the premises by the Petitioner as a tenant since 11th March, 1960, the rent was increased from Rs. 425/- per month to Rs. 500/- per month with effect from Ist March, 1964; then to Rs. 600/- per month from Ist, April, 1972 ; then to Rs. 70./- per month from Ist October, 1972 ; then to Rs. 700/- per month from Ist October, 1973 and ultimately to Rs. 1,000/- per month with effect from Ist April, 1977 but this gradual increase in rent during a quarter of a century does not in any way show that the Respondents have filed the present petition with a motive to secure more rent particularly in face of their established bona fide need of the premises for their own occupation.

The learned Counsel for the Petitioner then submitted that house in dispute had been taken on rent for residence and business as is evident from the lease deed brought on the record. He therefore, submits that it is non-residential building within the meaning of section 2(d) of the Act and the same cannot be got vacated by the Respondents for their personal requirement u/s 13(3)(a) of the Act. Section 2(d) as embodied in the Act is to the following effect:

2(d) "Non-residential building" means a building being used solely for the purpose of business or trade ;

Provided that residence in a building only for the purpose of guarding it shall not be deemed to convert a "non-residential building" to a "residential building". This definition in the Act was substituted by the East Punjab Urban Rent Restriction (Chandigarh Amendment) Act, 1982, (Act No. 42 of 1982).

"(d) "non-residential building" means-

(i) a building being used solely for the purpose of business or trade ;

(ii) a building let under a single tenancy for use for the purpose of business or trade and also for the purpose of residence.

Explanation.-For the purpose of this clause, residence in a building only for the purpose of guarding it, shall not be deemed to convert a "non-residential building" to a "residential building".

He submits that the amended definition of non-residential building contained in Section 2(d) treats a building let under a tenancy for use for the purpose of residence and business as a non-residential building. u/s 13(3)(a) of the Act a landlord can claim ejectment of the tenant in a case of residential building if he requires it for his occupation but not in the case of non-residential building.

There is no dispute with the proposition that a non-residential building cannot be got vacated by a landlord u/s 13(3)(a) of the Act when he requires it for his own occupation. The question, however, which primarily comes for consideration is whether the house in dispute is a non-residential building within the meaning of Section 2(d) of the Act as substituted by Act No. 42 of 1982. Chandigarh is a planned city and its regulation and development is governed by the Capital of Punjab (Development and Regulation) Act, 1952 (hereinafter referred to as the Capital of Punjab Act). It has been established on a vast area of land which was initially acquired by the Government and then sold, leased or otherwise transferred in the form of building sites or buildings on such terms and conditions as provided in the conveyance and lease deeds and other documents of title subject to the rules made under the Capital of Punjab Act. The sites and the buildings which were so disposed of by the Government were intended to be used for residential, commercial, industrial or other purposes. Section 5 of the Capital of Punjab Act provides that no person shall erect or occupy any building at Chandigarh in contravention of any rules made to regulate the erection of buildings and such other rules for any of the matters provided in Sub-section (2) thereof. It has not been disputed before me that the demised house is a residential building situated in a residential part of Sector 9-D. The question therefore, is whether its use by the Petitioner for residence and business on its having been let out for the said purpose by the Respondents would convert it into a non-residential building. In Kamal Arora v, Amar Singh 1980 (1) Rent C. R. 530, this Court held that a residential building let out for nonresidential purpose by the landlord without obtaining the written permission of the Rent Controller in terms of Section 11 of the Act would continue to be a residential building and the landlord would be entitled to seek ejectment of the tenant on the ground of his bona fide requirement. Section 11 of the Act is to the following effect:

No person shall convert a residential building into a nonresidential building except with the permission in writing of the Controller.

The decision of this Court in Kamal Arora''s case (supra) has since been confirmed by the Supreme Court in Kamal Arora v. Amar Singh and Ors. 1985 (1) Rent L. R. 643) wherein it has been observed:

Undoubtedly, the landlord let out the premises knowingly that it is being taken for running a school and admittedly the building is used for running a school. Therefore, prima facie the leased premises would fall within the definition of a non-residential building. The High Court after examining the provisions of the Capital of Punjab (Development and Regulation) Act, 1951 read with Section 11 of the Rent Act held that statute prohibits conversion of residential building into non-residential by act inter vivos. It was said that the landlord and tenant by their mutual consent cannot convert a residential building into a non-residential building because that would be violative of the provisions of Section 11. And it is admitted that building is situated in sector falling within the residential zone. In this factual situation, coupled with fact that the landlord has retired from service and genuinely needs the premises for his residence as found by all courts, we are not inclined to interfere with the judgment and order of the High Court.

The Full Bench of this Court in Shri Hari Mittal v. Shri B.M. Sikka (1986) 89 P.L.R. 1, had recently considered the scope of Section 11 of the Act taking into consideration the decision of this Court and that of the final court in Kamal Arora''s case (supra) and has held that Section 11 is intended to subserve as a public policy of seeing that the residential accommodation does not fall short of community''s requirement, as the shortage of residential accommodation would tend to result in unhygenic conditions of the residential area by accommodating more members than it could legitimately be intended or the extra population resorting to unhygenic use of the open space and pavements and creating social tension and health hazard to the community. It was, therefore, observed that the provisions of Section 11 of the Act are mandatory in character. It was further held that this provision is attracted even to a residential building which is in the occupation of the landlord; hence the landlord could not convert it into a self-occupying non-residential building without the permission of the Rent Controller in terms of Section 11 of the Act.

In the context of the above proposition of law it has to be found out what charge has been brought about by substitution of Clause (d) in Section 2 of the Act by Act No. 42 of 198. which is applicable to the planned city of Chandigarh. The words, ''a building let under a single tenancy for use for the purpose of business or trade and also for the purpose of residence" are to be read in consonance with the Capital of Punjab Act and Section 11 of the Act. The necessary result would be that the amendment brought about by Act No. 42 of 1982 in Clause (d) would apply to a building in the city of Chandigarh, which is erected and is used solely for the purpose of business or trade and to a building which is erected for use for the purpose of business or trade and also for the purpose of residence and is let under a single tenancy. It would not apply to a building which is erected for use as a residence and is located in a residential part of a sector in the city. Letting out of such a residential building for the purpose of residence and trade in violation of the Capital of Punjab Act and Section 11 of the Act would not bring it within the fold of non-residential building defined in Clause (d) of Section 2 substituted by Act No. 42 of 1982.

The learned Counsel for the Petitioner then drew my attention to the fact that the house in dispute was leased out to the Petitioner for residence and business in the year 1960 while the Act had been made applicable to the city of Chandigarh with effect from 4th November, 1972. By highlighting this fact he wanted to stress that at the time of letting out of the house in dispute any violation of Section 11 of the Act could not be said to have been committed as the same was not in force in the city of Chandigarh. That is undoubtedly so but we cannot lose sight of the fact that the Capital of Punjab Act has been in force right from the inception of the city and it prohibits conversion of use of residential building into a commercial or nonresidential one. Further more, after the Act came into force Section 11 thereof was at once attracted not only to the house which were let out but even to those in self-occupation of their owners, as held in Hari Mittals case (supra). Thus a residential building continued to maintain its character as such irrespective of the change in definition of non-residential building contained in Clause (d) of Section 2 of the Act brought about by Act No. 42 of 1982. I have, therefore, no doubt in my mind that the Respondents are entitled to maintain their application for vacation of the house in dispute u/s 13(3)(a)(i) of the Act.

The learned Counsel for the Petitioner at this stage invited my attention to B.S. K. Kamthania, Advocate v. Smt Hardial Kaur 1980(1) Rent L. R. 241, which inter alia contains the following observations:

In the present case, the Act came into force in the Union Territory of Chandigarh on 4th November, 1972. The premises were originally rented out in the year 1964. It was in the year 1968 that the Petitioner got the licence as an Advocate and since he is practicising as such. There is evidence on the record that even the Mukhtiar of the landlady, Sucha Singh (A.W.2) was also taking legal advice and getting certain notices issued from the Petitioner. Thus, the fact that the Petitioner had become an Advocate in the year 1968, was very much within her knowledge. It is at the time of the commencement of the Act, i. e. on 4th November, 1972 when it is to be seen for which purpose the building is being used. It has been found as a fact by the Appellate Authority that since 1968 when the Petitioner got licence as an Advocate, the premises in dispute were being used by him, being engaged in one or more of the professions specified in the schedule to this Act, partly for his business and partly for his residence. Since personal necessity is no ground for ejectment as regards the scheduled building, no order for ejectment could be passed in the present case.

On the above basis he submits that if conversion of use of a building in the city of Chandigarh has taken place prior to 4th November, 1972, Section 11 of the Act would be attracted. I have carefully gone through this judgment and find that there is no such proposition laid down therein as might support what the learned Counsel is canvassing All that has been observed there is that inspite of the fact that the residential premises had been let out to the tenant in the year 1964, he got a licence as an Advocate and started practising as such in the year 1968 which fact was well within the knowledge of the landlord who appears to have acquiesced to the use of the residential building as a scheduled building. It is to be noted that as defined in Section 2(h) of the Act '' 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 I to the Act, partly for his business and partly for his residence. The predominent use is, therefore, residence in such a residential building by a person engaged in one of the professions mentioned in schedule 1 The question whether or not it involved infraction of S. 11 of the Act did not come in for consideration B.S. Kamthania''s case (supra) is, therefore, clearly distinguishable and has no bearing on the facts of the present case.

Finding no merit in this revision petition. I dismiss the same with costs. The Petitioner is, however, allowed three months time to vacate the premises in dispute on the condition that it shall deposit the entire amount of arrears of rent alongwith advance rent for three months in the court of the Rent Controller within one month from today failing which the Respondents shall be entitled to take out execution of the order of ejectment against it forthwith.