Manuelsons Hotels (P) Ltd. v. P.K. Girish

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.T.SANKARAN & THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE THURSDAY, THE 29TH DAY OF MAY 2014/8TH JYAISHTA, 1936 RCRev..No. 72 of 2012 () ------------------------AGAINST THE JUDGMENT IN RCA 1/2010 OF RENT CONTROL APPELLATE AUTHORITY AND SECOND ADDITIONAL DISTRICT JUDGE, KOZHIKODE AGAINST THE ORDER IN RCP 86/2008 OF RENT CONTROL COURT (PRINCIPAL MUNSIFF COURT), KOZHIKODE DATED 26-10-2009 REVISION PETITIONER(S)/APPELLANT/PETITIONER: ---------------------------------------------------------------------- MANUELSONS HOTELS (P) LTD. GH ROAD, CALICUT-1 A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 REPRESENTED BY MANAGING DIRECTOR, P.M.ANTONY S/O. P.T.MANUEL, AGED 59 RESIDING AT KACHERI AMSOM AND DESOM OF KOZHIKODE TALUK KOZHIKODE DISTRICT, KERALA STATE. BY ADVS.SRI.SHYAM PADMAN SRI.A.RANJITH NARAYANAN SRI.S.K.SAJU RESPONDENT(S)/RESPONDENT/RESPONDENT/RESPONDENT: P.K.GIRISH S/O. K.C.KRISHNAN, AGED ABOUT 5O RESIDING ATE 21/707, KALLAI, CALICUT-3 PROPRIETOR, M/S. TOM AND JERRY DOOR NO. 1865 W AND M/S. DREAMZ ONLINE DIGITAL WORX DOOR NO. 1865 X, MANUELSONS SHOPPING COMPLEX, G.H.ROAD, CALICUT-673001. R1 BY ADV. SRI.P.V.KUNHIKRISHNAN THIS RENT CONTROL REVISION HAVING COME UP FOR ADMISSION ON 29-05-2014, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: **K.T.SANKARAN & A.MUHAMED MUSTAQUE, JJ.** ------------------------------------- ## R.C.R.No.72 of 2012 ------------------------------------Dated this the 29[th] day of May, 2014 ## **K.T.Sankaran, J.** **==> picture [138 x 12] intentionally omitted <==** The landlord, whose Rent Control Petition was dismissed by the Rent Control Court as well as by the Appellate Authority under Section 11(3) of the Kerala Buildings (Lease and Rent Control) Act, is the revision petitioner. 2. The revision petitioner filed R.C.P.No.86 of 2008, on the file of the Rent Control Court/Principal Munsiff II, Kozhikode, against the respondent under Section 11(2)(b) and Section 11(3) of the Kerala Buildings (Lease and Rent Control) Act (hereinafter referred to as 'the Act'). Before the trial of the case, it was suggested by both the parties that Section 11(3) does RCR 72/2012 2 not really arise, but the Rent Control Petition could be considered under Section 11(8) of the Act. Accordingly, evidence was let in by both the parties treating the Rent Control Petition as one under Section 11(8). 3. The Rent Control Court dismissed the R.C.P. under Section 11(2)(b) as well as under Section 11(8). The landlord filed R.C.A.No.1 of 2010 challenging the order of the Rent Control Court. The Appellate Authority reversed the order under Section 11(2)(b) and confirmed the order under Section 11(8). 4. Both the authorities below found that the petitioner/landlord failed to establish the bonafides as provided under Section 11(10) of the Act in respect of the ground under sub-section (8) of Section 11. However, both the authorities RCR 72/2012 3 found that the hardship which may be caused to the tenant by granting an order of eviction would not outweigh the advantage to the landlord. That means the finding under the first proviso to subsection (10) of Section 11 is in favour of the petitioner/landlord. 5. The landlord runs a multi-storied four star hotel. The petition schedule rooms, namely, room Nos.27 and 28 as noted by the Commissioner in the sketch, forms part of the hotel building. These rooms are in the occupation of the respondent/tenant who conducts an ice-cream parlour under the name and style “Tom N Jerry” and another concern called “Dreamz Online Digital Worx”. There is a banquet hall in the hotel building. On the eastern side of the banquet hall, there is another area which is called pre-function area. There are only RCR 72/2012 4 pillars and curtains to separate the pre-function area from the banquet hall. The entrance to room numbers 27 and 28 and certain other rooms is not from the banquet hall, but from the open area on the western side which has entrance to the main road. That means separating room Nos.25, 26, 27 , 28 and 29 from the banquet hall, there is a wall and there is no entrance in between. It is admitted by the landlord that room No.29 is in their possession and room Nos.25 and 26 are in the possession of other tenants. The landlord contended that it is necessary to annex room Nos.27, 28 and 29 to the banquet hall for more convenient use of the banquet hall. In the Rent Control Petition, it was averred as follows : “3. The shop rooms aforementioned and shown in the schedule hereunder rented out to the respondent, which are part of the main building wherein the petitioner is conducting hotel/hospitality business, are required by the petitioner for being used for their RCR 72/2012 5 business activities. The said shop rooms are abutting the banquet hall (PR Hall) with only a wall separating the same, which could be easily removed. The petitioner is finding that the available space in banquet hall is throughly inadequate to accommodate the growing demands and requirements of the customers. The petitioner is being put to much hardship and the business is also adversely affected on account of the inadequacy of space and facilities in their establishment. The petitioner intend to expand the existing facilities in the banquet hall by utilizing the additional space that would be available if the shop rooms shown in the schedule hereunder also could be integrated with the banquet hall.” 6. The respondent/tenant contested the case. He disputed the genuineness of the need put forward by the landlord. He stated in paragraph 4 of the counter as follows : “4. The claim and averments made in para 3 of the petition are totally false and baseless allegations being set up malafide for raising a ground of eviction RCR 72/2012 6 against this respondent with the sole motive of wrecking this respondents business and livelihood by dislodging him there from and thereafter to let out those rooms on higher rent by collecting huge amount of premium thereof. The contention that “petitioner is finding that the available space in the banquet hall is throughly inadequate to accommodate the growing demands and requirements of the customers and the petitioner intent to expand the existing facilities in the banquet hall by utilizing the additional space that would be available if the shop rooms are integrated with the banquet hall” is false malicious and misleading allegations. This respondent submit that the present banquet hall itself is spacious and convenient for the petitioners present volume of business and customer services. Hence the claim made on the basis of need for adolitional space is false and motivated. Even if the petitioner is able to prove the above claim then even in such event there is no need for evicting this respondent from the shop rooms for the simple reason that the hall adjoining the banquet hall at its eastern side and measuring over one thousand square feet in area has been lying vacant and unused. This can be readily and conveniently added on RCR 72/2012 7 to and integrated with the banquet hall for the alleged need of additional space and convenience. This adjoining vacant hall having the same length as that of the banquet hall it is the one ideal and suitable for the purpose as against the impugned two shop rooms which together cover only a negligible length of the banquet hall. The petitioner not having so opted and instead have been keeping that eastern hall unused and idle for all these years, now coming up with a case of additional space requirement upon this respondent would itself betray the falsity and malafide nature of the present claim. In this context this respondent seeks to submit that the banquet hall in the second floor of this building is not being used by the petitioner and instead it is being rent out for other purposes and that the two top floor of this building are being kept vacant and unoccupied, which circumstances would further expose the fallacy of the present claim.” 7. The landlord and the tenant adduced oral and documentary evidence before the Rent Control Court. On behalf of the landlord, PW1 was examined and the tenant was RCR 72/2012 examined as RW1. 8. The Rent Control Court held that the claim under Section 11(8) is not bonafide. The main reasons for arriving at that conclusion were the following : - (i) The landlord did not produce the documents admittedly in their custody to show that the banquet hall is frequently engaged or booked by the customers. - (ii) It is admitted by PW1 that the petitioner is maintaining a register which will show the number of bookings and the income received there from, but that document was not produced by the landlord. - (iii) The tenant pointed out that there are several other rooms in the possession of the landlord and without utilising the same, the tenant is sought to be evicted from the petition schedule building. This contention was accepted by the Rent Control Court. RCR 72/2012 9 - (iv) It is not stated in the Rent Control Petition about the existence of the pre-function area, but it is stated only in the evidence of PW1. - (v) Keeping a larger area (that is the pre-function area) in the possession of the landlord, he claims a lesser area from the tenant. This tells upon the bonafide need of the claim made by the landlord. - (vi) The Rent Control Petition does not mention that room No.29 is in the vacant possession of the landlord. Only in evidence, PW1 disclosed the same. - (vii) The landlord has not explained why room No.29 could not be used as additional accommodation. - (viii) PW1 never said that he intends to annex room No.29 to the banquet hall. - (ix) If the petition schedule rooms are annexed to the RCR 72/2012 10 banquet hall, it would constitute only a “pocket area”. It cannot be believed that such a small “pocket area” would be annexed to the banquet hall. - (x) There is no satisfactory explanation for not annexing the pre-function area and room No.29 to the banquet hall. 9. It is true that there is no mention in the Rent Control Petition about the existence of the pre-function area and the availability of room No.29 in the possession of the landlord. However, he disclosed the same to the Commissioner who inspected the petition schedule buildings and the hotel building on the same date of the filing of the Rent Control Petition. A Commissioner was appointed on the application of the landlord. This would make the position clear that the landlord never suppressed these facts and brought these facts to the notice of the RCR 72/2012 11 Commissioner at the earliest point of time. 10. The Appellate Authority had given almost the same reasons as stated by the Rent Control Court to arrive at the finding that the landlord failed to establish the bonafides of his claim. 11. On a careful consideration of the findings rendered by the courts below, we are of the view that those findings are, to a great extent, against the settled principles of law laid down by this Court. In **Pakran vs. Kunhiraman Nambiar (2004(1) KLT 824)** , a Division Bench of this Court held thus : “What is required under Section 11(8) from the landlord's side is to show that he needs the scheduled buildings by way of additional accommodation for his personal use. A Division Bench of this Court in Arjunan vs. Eranu (1991(2)KLT 279) has ruled that the need of RCR 72/2012 12 additional accommodation for personal use is not confined to the need of the landlord alone but is wide enough to include use by the members of the landlord's family. Section 11(8) certainly is qualified by Section 11(10) and thus it becomes necessary also to show that the landlord's requirement is bonafide. It is now trite that the standards to decide bonafides of a claim under Section 11(3) and that of a requirement for additional accommodation coming under Section 11(8) are different, the former being more rigorous than the latter. The learned Judges who decided Arjunan (supra) virtually approved of the view of Subramonian Poti, J. (as he then was) in Lekshmana Naikan vs. Gopalakrishna Pillai, 1981 KLT 167, wherein his Lordship held that in cases coming under Section 11(3) the question is not whether the landlord will be able to manage without the additional accommodation and the question is only whether the landlord is setting up an excuse to obtain eviction and went to the extent of holding that additional accommodation cannot be denied even if the requirement amounted to a luxury. Even for claims under Section 11(3) bonafide requirement means nothing more than reasonable RCR 72/2012 13 requirement from the view point of a person placed in circumstances similar to that of the given landlord.” ## 12. In **Bonny vs. Koshy P.John (2005(1)KLT Short** **Notes 114 (Case No.145))** , another Division Bench of this Court, while dealing with a claim under Section 11(8) of the Act held that “the tenant cannot dictate the landlord to remain content with a smaller and less convenient premises in preference to the tenanted premises which is more spacious and more advantageous. It is not for the Court also to find out whether even without such additional accommodation the landlord could somehow manage to carry on.” ## 13. In **Indian Saree House vs. Radhalakshmy (2006(3) KLT 129)** , a Division Bench of this Court held : - “12..............The ingredients of sub-sections (3) RCR 72/2012 14 and (8) are distinct and different. They are mutually exclusive. Of course, some of the matters to be proved in order to get an order either under sub clause (3) or sub-clause (8) of Section 11 are common. The landlord has to prove that the claim is bonafide in both these situations. If the claim is not proved to be bonafide, it shall be rejected as provided under Section 11(10) of the Act. The first proviso to Section 11(3) deprives the landlord to get an order for eviction if he has another building of his own in his possession in the same city, town or village except where the Rent Control Court is satisfied that special reasons exist. Such a condition is absent in the case of Section 11(8). Even if the landlord has another building, it may not have any relevance in an application under Section 11(8). In an application under Section 11(8), the landlord need not prove any special reasons as provided in the first proviso to Section 11(3). Ownership and possession of the landlord in respect of another building is irrelevant in deciding an application of Section 11(8), except, probably, in deciding the comparative hardship under the proviso to Section 11(10), that too, depending upon the facts and circumstances of the case. The second RCR 72/2012 15 proviso to Section 11(3) mandates that no order under Section 11(3) shall be passed in favour of the landlord if the tenant is depending for his livelihood mainly on the income derived from any trade or business carried in the building and if there is no other suitable building available in the locality for the tenant to carry on such trade or business. These requirements are absent in Section 11(8). So also, such protection is not available to a tenant against whom an application under Section 11(8) is filed. The first proviso to Section 11 (10) states that the Rent Control Court shall reject the application under Section 11(8) if it is satisfied that the hardship which may be caused to the tenant by granting it will outweigh the advantage to the landlord. The facts constituting the ingredients of the second proviso to Section 11(3) may be relevant in certain cases coming under Section 11(8) only for considering the proof or otherwise of the comparative hardship under the first proviso to Section 11(10). The third and fourth proviso to Section 11(3) are also not applicable in the case of an application under Section 11(8). To our mind, the above mentioned items of distinction between Section 11(3) and 11(8) would make it clear RCR 72/2012 16 that they are mutually exclusive.” ## 14. In **Laila A.Khader vs. Scaria (2012(1) KLT 974)** , ## another Division Bench held : “8. ........................In Lekshmana Naikan vs. Gopalakrishna Pillai (1981 KLT 167), this Court held that “may be that even without the additional accommodation the landlord may manage. If the question is one of dire need one may say he can do without it. In fact the additional accommodation which he seeks may even amount to a luxury for him. But there are many people who can afford luxuries. Those who can are entitled to them and there is no reason to deny that to them so long as law does not prohibit their enjoyment.” 9. The expansion of a running business requiring additional accommodation is an idea arises out from the past business experience and future expectations of the person who carrying on the business in that premises and normally it may be the result of a secret deliberation in his own mind, particularly when RCR 72/2012 17 business is competitive. Sometimes his expectations may end in futility. So the landlord need not convince the court that expansion of the business would certainly be a successful event. It is sufficient, if the landlord convinces the court that the idea of expansion is a bonafide one, which emanated from his true and genuine desire. Therefore, a tenant cannot say that there is no scope of expansion as it was done two or three years back. The expansion is at the risk and cost of the landlord. Hence, we are not inclined to accept the contention raised by the counsel for the tenant challenging the scope of expansion. 10. Similarly, the mode of expansion of a business is a matter absolutely within the domain of the landlord and the tenant cannot dictate the terms of expansion of the business. He cannot say in what manner the landlord should expand his business or in which floor or room he should take for additional accommodation. In the instant case, it is admitted that the landlord is conducting jewellery in the ground floor. Certainly for the foregoing reasons, the space if available in the ground floor would be more convenient and suitable than the space available on the Ist or IInd RCR 72/2012 18 floor for the expansion of a jewellery which needs the attraction of the customers.........” 15. In **Madhavan vs. Leelamma (1991 (2) KLJ 2)** , it was held that in the matter of pleadings, a liberal view is to be taken if the court feels that no prejudice has been caused to the tenant on account of the pleadings of the landlord. It is not proper to deny the relief to the landlord on the ground that there is no pleading. The decision in Madhavan vs. Leelamma (1991 (2) KLJ 2) was followed in **Cannanore Drug House vs. Abdul Azeez (2013(1) KLT SN 130 C.No.115)** . 16. In the present case, a perusal of the counter filed by the tenant would clearly show that he has made his case in respect of the area on the eastern side of the banquet hall (which is called the pre-function area). On a careful consideration of the RCR 72/2012 19 pleadings and the evidence in the case, (copies of all the relevant documents having been supplied by the learned counsel for the parties), we are of the view that no prejudice was caused to the tenant by not mentioning about the pre-function area and the availability of room No.29 in the Rent Control Petition. At this juncture, the learned counsel appearing for the landlord, on instructions, submitted that the landlord is determined to make use of room Nos.27, 28 and 29 for the purpose of annexing the same for the convenient use of the banquet hall and that it would be done within three months from the date of getting vacant possession. It is also undertaken by the learned counsel for the landlord on behalf of the landlord that if steps are not taken towards this end, the tenant would be put back in possession of room Nos.27 and 28. We record these undertakings. As stated earlier, the courts below did not properly apply the principles of RCR 72/2012 20 law laid down by this Court, to the admitted and proved facts in the case. To our mind, it would attract the expression “illegality, irregularity or impropriety” occurring in Section 20 of the Act and therefore, interference under Section 20 would be justified. 17. The facts and circumstances would clearly show that the landlord has established the bonafides of the claim under sub-section (8) of Section 11 in terms of sub-section (10). Subsection (10) of Section 11 provides that if the Rent Control Court is satisfied that the claim of the landlord under sub-section (8) is bonafide, it shall make an order directing the tenant to put the landlord in possession of the building. The first proviso to sub-section (10) of Section 11 provides that in the case of an application under sub-section (8), the Rent Control Court shall reject the application if it is satisfied that the hardship which may RCR 72/2012 21 be caused to the tenant by granting it will outweigh the advantage to the landlord. It is relevant to note here that both authorities took the view in favour of the landlord in respect of the first proviso to Section 11(10). This is an added circumstance while considering the genuineness or otherwise of the claim under sub-section (10) of Section 11 and in considering and balancing the claim of the landlord and the objection by the tenant. 18. For the aforesaid reasons, we allow the revision and set aside the order and judgment of the Rent Control Court and the Appellate Authority, in so far as it relates to the finding of bonafides of the claim of the landlord under sub-section (8) of Section 11 and allow the Rent Control Petition under Section 11 (8) of the Act. RCR 72/2012 22 The learned counsel for the respondent/tenant submitted that the tenant may be granted one year's time to vacate the petition schedule rooms. The learned counsel for the landlord submitted that only a reasonable time may be granted to vacate. Taking into account the facts and circumstances of the case, we are of the view that time up to 31.12.2014 can be granted to the tenant to vacate. Accordingly, while allowing the Rent Control Revision as mentioned above, we grant time up to 31.12.2014 to the tenant to vacate the petition schedule building on condition that he shall file an affidavit before the Rent Control Court within a period of one month from today, unconditionally undertaking to vacate the petition schedule building on or before 31.12.2014 and also on condition that the tenant shall deposit before the Rent Control Court the entire arrears of rent within a period of two months from today and continue to deposit the RCR 72/2012 23 monthly rent on the 10[th] of every succeeding month till he vacates the petition schedule building. If the tenant complies with the aforesaid conditions, the order of eviction shall be kept in abeyance till 31.12.2014. If the tenant fails to comply with any of the conditions mentioned above, the landlord would be entitled to take out execution of the order of eviction forthwith. It is also made clear that the undertaking mentioned in paragraph 16 above shall form part of the order and it shall be executed as an executable order, in case it becomes necessary. **K.T.SANKARAN** **A.MUHAMED MUSTAQUE** csl