Liji Agencies v. Raghunath, Rajan and T.R. Sundaran

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE PIUS C.KURIAKOSE & THE HON'BLE MR. JUSTICE A.V.RAMAKRISHNA PILLAI WEDNESDAY, THE 25TH DAY OF JANUARY 2012/5TH MAGHA 1933 RCR.No.202 of 2011 (C) ----------------------------RCA.53/2005 of RENT CONTROL APPELLATE AUTHORITY,THRISSUR RCP.66/2002 of RENT CONTROL COURT,THRISSUR ------------------------ ## REVISION PETITIONER(S)/APPELLANT/RESPONDENT: ----------------------------------------------------------- LIJI AGENCIES, THRISSUR TALUK, THRISSUR VILLAGE, REPRESENTED BY MANAGING PARTNER LOUIS, S/O.VAZHAPPILLY ANTHONY, PONNOR DESOM EDAKKALATHUR VILLAGE, THRISSUR TALUK. BY ADV. SRI.P.V.CHANDRA MOHAN RESPONDENT(S)/RESPONDENTS/PETITIONER AND R2&3: ---------------------------------------------------------------- 1. RAGHUNATH, S/O.THENCHERY JANAKY AMMA, SHORNUR ROAD, THIRUVAMBADY DESOM, THRISSUR TALUK THRISSUR DISTRICT. 2. RAJAN, KUNNATHUMANA BUILDING, XXIX/468, SHORNUR ROAD, THRISSUR TOWN, NOW RESIDING AT MULAMKUNNATHUKAVU. 3. T.R.SUNDARAN, XXIX/468, SHORNUR ROAD, THRISSUR TOWN, NOW CONDUCTING "SUBHA" METER SERVICING, CHETTILANGADI. R1 BY SRI.V.SANTHARAM R1 BY SRI.ANTO THOMAS R1 BY SRI.LAKSHMEESH.S.KAMATH THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 25-01-2012, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C. R. PIUS C. KURIAKOSE & A. V. RAMAKRISHNA PILLAI, JJ. -----------------------------------------------R. C. R No.202 of 2011 -----------------------------------------------Dated this the 25[th] day of January, 2012 ## **ORDER** _Pius C. Kuriakose, J_ Under challenge in this revision filed by the tenant, a partnership firm by name “Liji Agencies”, is the order of eviction passed against the revision petitioner on the ground of arrears of rent under Section 11(2)(b), subletting under Section 11(4)(i) and cessation of occupation without reasonable cause under Section 11(4)(v) of Act 2 of 1965. The landlord had invoked the ground under Section 11(3) also but that ground does not survive any longer. 2. Sri.P.V.Chandramohan, the learned counsel for the revision petitioner submitted at the very outset that as the eviction order passed under Section 11(2)(b) is a tentative one, it will suffice, if the petitioners are given sufficient time to avail the remedy under Section 11(2)(c). Therefore, we R. C. R No.202 of 2011 -2- confirm the eviction order passed under Section 11(2)(b) and grant to the revision petitioner two months time from today for getting the same vacated under Section 11(2)(c). 3. In this revision we are concerned with the correctness of the eviction order passed under Section 11(4) (i) and under Section 11(4)(v). The one argument which was seriously advanced before us by Sri.P.V.Chandramohan was that the combined eviction order passed by the statutory authorities under Section 11(4)(i) and under Section 11(4)(v) is unsustainable in law. According to the learned counsel, there is inherent inconsistency between grounds under Section 11(4)(i) and Section 11(4)(v) and therefore, a combined order under these sub sections cannot be passed. Strong reliance was placed by Sri.P.V.Chandramohan on the judgment of a Division Bench of this Court in Sreekumar v. Parameswaran (2005(4) KLT 492) which takes the view that if the building is occupied by a sub tenant, there cannot be any cessation of occupation under Section 11(4)(v). 4. Sri.V.Santharam, the learned counsel for the R. C. R No.202 of 2011 -3- respondents per contra would oppose the argument of Sri.Chandramohan and submit that the Division Bench in Sreekumar's case (supra) does not lay down that under no circumstances a combined order cannot be passed under Section 11(4)(i) and under Section 11(4)(v). According to the learned counsel, what was held in that judgment was only that in the facts which obtain in that case eviction order could have been passed only under Section 11(4)(i). 5. Sri.Santharam placed reliance on the judgment of the Madras High Court in P.V. Subbu Chetty & Sons v. Madras Stainless Emporium (1979(1) MLJ 504) wherein the Madras High Court held that in a case where the entire building or part thereof is transferred by the tenant in favour of the alleged sub lessee and the tenant is no longer in occupation of any part of the building concerned both subletting as well as cessation of occupation will stand established. 6. Before we proceed to appreciate the submissions and answer the legal question raised, it is necessary to R. C. R No.202 of 2011 -4- examine the rival pleadings and the case that has been brought out in evidence. The building in question had been let out to M/s Liji Agencies, who conducted business in cosmetics and sweets in the building over a long period of time. At about the time of commencement of the Rent Control Petition the above business had come to an end. Instead several other business activities such as motor servicing, auto consultancy, courier service and marriage bureau were being conducted in the building. The landlord's allegation was that the tenant firm - “Liji Agencies” had become defunct and that its partners are not in occupation of the building at all and that this cessation of occupation is without reasonable cause. There was a further allegation that it was the alleged sub lessee's viz. respondent Nos. 2 and 3 in the RCP (respondent Nos. 2 and 3 herein) who are in occupational possession and it is they who are conducting the activities presently seen conducted. The specific defence raised by the tenant to the grounds of cessation of occupation and subletting were the following:- R. C. R No.202 of 2011 -5- 1) The firm no longer conducts its old business in cosmetics and sweets and that business was stopped since the same was found to be not profitable. 2) The new businesses were started by Liji Agencies, the firm themselves. But since the new businesses require some expertise, the alleged sub lessees who are having such expertise have been employed and the alleged sub lessees are not sub lessees but they are employees of Liji Agencies. There is no cessation of occupation or subletting. 7. The fact situation as emerging from the evidence on record in the case is that the alleged sub lessees are physically present in the building and it is they who are actually conducting the activities going on in the building. The partners of the firm Liji Agencies, the tenant are not physically present at all. The tenants did not adduce any evidence to show that the jural relationship between them and the alleged sub lessees is that of employer - employee. Sri.Chandramohan's explanation as to the total dearth of documentary evidence to show the jural relationship R. C. R No.202 of 2011 -6- between the firm and the alleged sub lessee's was that as the landlord objected to the issuance of the licence by the local authority for conduct of the new businesses, the new businesses could not be conducted in a large scale. Hence, the new businesses are being conducted only in a skeleton manner and that is why there are no documents in respect of these two businesses. The above explanation is not at all convincing and found so rightly by the two authorities. We do not find any infirmity about the concurrent finding of fact entered by the two authorities regarding actual occupation and physical possession over the petition schedule premises and also regarding the identity of the persons who are actually conducting the present businesses within the well delineated contours of the revisional jurisdiction under Section 20. 8. We shall now proceed to answer the legal question raised before us by Sri.P.V.Chandramohan i.e whether the eviction order presently passed both under Section 11(4)(i) and under Section 11(4)(v) is sustainable ? R. C. R No.202 of 2011 -7- 9. It is true that in Sreekumar's case (cited supra) a Division Bench of this Court took the view that when the tenanted premises is occupied by a sub tenant, there will be no cessation of occupation of the building. The above view was taken by the learned Division Bench relying on a Full Bench decision of the Allahabad High Court in R.M.Devi v. R.C. & E. Officer (AIR 1976 Allahabad 517). The judgment of the Full Bench of the Allahabad High Court was given on a reference to the Full Bench by a learned Single Judge of that court of the following question “whether a vacancy occurred under the provisions of U.P. (Temporary) Control of Rent and Eviction Act, 1947 in case a tenant sublets a portion of his accommodation ?” It was Section 7 of the above Act hereinafter referred to as the U.P. (Temporary) Control Act and also the corresponding provisions (Section 12 and Section 15) of the subsequent statute namely the U.P. Urban Buildings (Regulation of letting Rent and Eviction) Act, 1972 which were considered by the Full Bench. The Full Bench of the Allahabad High Court also considered Section 25 of the R. C. R No.202 of 2011 -8- subsequent statute. It should be noticed immediately that the Uttar Pradesh Statutes the Temporary Statute and the subsequent statute do not as such contain a provision in para materia with clause 5 of Sub Section 4 of Section 11 which provides for eviction on the ground of cessation of occupation. Section 7 of the Temporary statute and Section 15 of the subsequent statute are provisions which enable the District Magistrate, the competent authority under these statutes to pass orders of allotment of buildings once vacancies of buildings are notified to him. Section 12 deals with the deemed vacancy of the buildings and provides that under certain specified circumstances a landlord or tenant shall be deemed to have ceased to occupy the building. We have not been able to find any provision in the U.P. statute providing for eviction upon the existence of a ground comparable to the ground provided under Section 11(4)(v) of Kerala Buildings (Lease and Rent Control) Act (Act 2 of 1965) - cessation occupation by a tenant without reasonable cause for more than six months. The decision of the Allahabad Full R. C. R No.202 of 2011 -9- Bench that when a tenant sublets building let out to him to a sub tenant it cannot be found that the tenant has ceased to occupy the building is rendered while considering the question whether an order of allotment can be passed by the District Magistrate in terms of the power to pass allotment orders in situations where accommodations fall vacant and are available for allotment. Even though the learned Judges of the Full Bench of the Allahabad High Court by majority answered the question by saying that subletting of the entire building or a portion of the building will not constitute vacancy, it is very clear to our mind that the above judgment cannot have any application to a situation contemplated under Section 11(4)(v) of the Kerala Statute which by itself provides for an independent eviction ground. The abstract legal proposition laid down by the Full Bench of the Allahabad High Court that when a building has been sublet by a tenant and the sub lessee is in possession there will not be any cessation of occupation has to be understood in the back drop of the provisions considered by the R. C. R No.202 of 2011 -10- Allahabad Full Bench. 10. The judgment of the Madras High Court in P.V. Subbu Chetty & Sons v. Madras Stainless Emporium (cited supra) has been rendered by the Madras High Court in the context of Section 10(2)(vi) of the Tamilnadu Buildings (Lease and Rent Control) Act. Section 10(2)(vi) of the above Act provides the ground for eviction and reads as follows:- “Where the building is situated in a place other than a hill-station, the tenant has ceased to occupy the building for a continuous period of four months without reasonable cause.” 11. The above provision of the Tamilnadu Act in our view is somewhat homologous to our Section 11(4)(v) and the view taken by the Madras High Court is that if subletting by the tenant is proved then “it would also pragmatically mean that the tenant has ceased to occupy that portion of the building”. The above view expressed by Sri.T. Ramaprasad Rao, Chief Justice who authored the judgment has to be found to be logical when the meaning of the expression “occupation” as distinguished from juristical R. C. R No.202 of 2011 -11- possession is understood. True, we notice that the Madras High Court did not in the P.V. Subbu Chetty 's case order eviction on the ground of cessation of occupation. This was because there was evidence to hold that there was a common partner in the tenant firm as well as in the sub tenant firm and the Madras High Court relying on the judgment of the Supreme Court in Murli Dhar v. Chuni Lai and Ors (1970 All India Rent Control Journal 922) took the view that occupation by the common partner is occupation by the tenant firm and declined eviction order on the ground of cessation of occupation. 12. The learned Bench which decided Sreekumar's case (supra) unfortunately did not notice the judgments of coordinate Benches of this Court which took the view that occupation for the purposes of Section 11(4)(v) of Kerala Buildings (Lease and Rent Control) Act means actual physical occupation. In Rajagopalan v. Gopalan (2004(1) KLT S.N. Page 54 Case No.70), a Division Bench of this Court to which one among us [PCK(J)] was party held that occupation R. C. R No.202 of 2011 -12- in the context of Section 11(4)(v) means physical occupation and when it pertains to a residential building which means occupation through residence and when it pertains to a commercial building it means occupation by conduct of business. Another Division Bench of this Court in Mathai Antony v. Abraham (2004(3) KLT 169) held by a judgment authored by Justice K.S.Radhakrishnan as a Judge of this Court (as His Lordship then was) that the word “occupy” has to be given a meaning so as to hold that the tenant is actually using the premises and not mere physical presence or juristical possession. In Kurian Thomas v. Sreedhara Menon (2004(3) KLT 326) the same Division Bench (Justice K.S.Radhakrishnan & Justice J.M.James) reiterated the same view and held that the word “occupation” must be understood to be not mere physical possession but the tenant should use the building. It was held that the word “occupy” used by the statute Section under 11(4)(v) would show that the tenanted premises be put to use. It is seen that the Division Bench which decided Sreekumar's case R. C. R No.202 of 2011 -13- (cited supra) unfortunately did not notice the above judgments delivered by co-ordinate Benches of this Court. In fact, the earlier Bench decisions of this Court were rendered keeping in mind the legislative intentment underlying Section 11(4)(v) which is that in a situation where there is acute accommodation shortage a tenant who has not occupied the building let out to him continuously for a period of more than six months without reasonable cause should surrender the building so that the building can be made available for occupation by other needy persons. The view taken in Sreekumar's case (cited supra) that the grounds of subletting and cessation of occupation cannot co-exist has been so taken following the Full Bench decision of the Allahabad High Court rendered not in the context of the provision in para materia with Section 11(4)(v) of Kerala Act (Act 2 of 1965). The above view has been taken without noticing Bench decisions of this Court rendered under Section 11(4)(v) of the Kerala Statute taking the view clearly that occupation for the purposes of Section 11(4)(v) means R. C. R No.202 of 2011 -14- actual occupation. We are not persuaded to hold that the view taken in the earlier Division Bench judgments of this Court are wrong. According to us, at least in cases where there is allegation and proof that the entire building has been sublet or transferred and that the tenant has not occupied even a portion of the tenanted premises for a continuous period of more than six months prior to the commencement of the proceedings the grounds of subletting/transfer and cessation of occupation will be available to the landlord. 13. As for the facts of the present case, we are of the view that the eviction grounds under Section 11(4)(i) and Section 11(4)(v) i.e. subletting/transfer and cessation of occupation without any reasonable cause are clearly made out. As pointed out in the earlier part of this judgment the tenant/firm has become defunct and none of the partners of the said firm are in occupation of any portion of the building during the statutory period of six months and more. The cause made out by them for the cessation of occupation R. C. R No.202 of 2011 -15- could not be established at all by the partners of the firm. It was established to the very hilt that it is the alleged sub lessees who are in occupation and are conducting businesses entirely different from the business which used to be conducted by the tenant firm. No evidence at all was adduced by the tenant firm to show that the jural relationship between the firm and the alleged sub lessees is that of employer - employee. There is no infirmity with the finding concurrently entered by the two authorities that the eviction grounds under Sections 11(4)(v) and also under Section 11(4)(i) are made out. Revision fails and will stand dismissed. The parties will suffer their respective costs. Sd/PIUS C. KURIAKOSE JUDGE Sd/A. V. RAMAKRISHNA PILLAI JUDGE kns/- //TRUE COPY// P.A. TO JUDGE R. C. R No.202 of 2011 -16-