M/S Patel Saw Mill and others v. Johnson Kanadan and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR. JUSTICE P.BHAVADASAN FRIDAY, THE 26TH NOVEMBER 2010 / 5TH AGRAHAYANA 1932** **RFA.No. 318 of 2010()** **-------------------------OS.987/2008 of I ADDL.SUB COURT,ERNAKULAM** **....................** ## **APPELLANTS(DEFENDANTS 1 TO 5)** **------------------------------------------** **1. M/S.PATEL SAW MILL, A PARTNERSHIP FIRM, REPRESENTED BY ITS MANAGING PARTNER PURUSHOTHAM KANJI PATEL, S/O.KANJI PATEL, BUSINESS, DOOR NO.CC 26/102, THEVARA, KOCHI-13.** **2. PURUSHOTHAM KANJI PATEL, S/O.KANJI PATEL MANAGING PARTNER, M/S.PATEL SAW MILL, DOOR NO.CC 26/102, THEVARA, KOCHI-13.** **3. KRISHNA DAS KANJI PATEL, PARTNER, M/S.PATEL SAW MILL, S/O.KANJI PATEL, DOOR NO.CC 26/102, THEVARA, KOCHI-13.** ## **4. MANILAL KANJI PATEL,** **S/O.KANJI PATEL, PARTNER, M/S.PATEL SAW MILL, DOOR NO.CC.26/102, THEVARA, KOCHI-13.** **BY ADVS. SRI.S.SHYAM SRI.BOBBYMATHEW KOOTHATTUKULAM** ## **RESPONDENT(S)/PLAINTIFFS AND DEFENDANTS 4 & 6** **----------------------------------------------------------------** **1. JOHNSON KANADAN, ADVOCATE, S/O.JOSEPH, KANATT PUTHENVEETTIL HOUSE, THEVARA, ELAMKULAM VILLAGE, KANAYANNUR TALUK, KOCHI-13.** **........2/-..** **...2...** **2. TOMY, RETIRED BANK OFFICER, S/O.JOSEPH, KANATT PUTHENVEETTIL HOUSE, THEVARA, ELAMKULAM VILLAGE, KANAYANNUR TALUK, KOCHI-13.** **3. SEBASTIAN, COMPANY EMPLOYEE, S/O.JOSEPH, KANATT PUTHENVEETTIL HOUSE, THEVARA, ELAMKULAM VILLAGE, KANAYANNUR TALUK, KOCHI-13.** **4. GRACY PAUL, HOUSE WIFE, W/O.LATE PAULSON, S/O.JOSEPH, KANATT PUTHENVEETTIL HOUSE, THEVARA, ELAMKULAM VILLAGE, KANAYANNUR TALUK, KOCHI-13.** **5. JOE PAUL, BUSINESS, S/O.LATE PAULSON, S/O.JOSEPH, KANATT PUTHENVEETTIL HOUSE, THEVARA, ELAMKULAM VILLAGE, KANAYANNUR TALUK, KOCHI-13.** **6. ABY PAUL, PHARMACIST, S/O.LATE PAULSON, S/O.JOSEPH, KANATT PUTHENVEETTIL HOUSE, THEVARA, ELAMKULAM VILLAGE, KANAYANNUR TALUK, KOCHI-13.** ## **7. JEEMON PAUL, BUSINESS,** **S/O.LATE PAULSON, S/O.JOSEPH, KANATT PUTHENVEETTIL HOUSE, THEVARA, ELAMKULAM VILLAGE, KANAYANNUR TALUK, KOCHI-13.** **8. LEGY PAUL, HOUSE WIFE, D/O.LATE PAULSON, S/O.JOSEPH, KANATT PUTHENVEETTIL HOUSE, THEVARA, ELAMKULAM VILLAGE, KANAYANNUR TALUK, KOCHI-13.** **9. REJANI LAL KANJI PETE, S/O.KANJI PATEL, RESIDING AT DOOR NO CC.26/102, THEVARA, KOCHI-13.** **10. GOVIND KANJI PATEL, S/O.KANJI PATEL, RESIDING AT DOOR NO.CC.26/102, THEVARA, KOCHI-13.** **R1 TO 8 BY ADVS. SRI.C.T.JOSEPH FOR CAVEATOR SRI.S.KRISHNAN THAMPI SRI.JOHNSON JOSEPH KANADAN SRI.THOMAS JOSEPH** **THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 26/11/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **svs/** ## **THOTTATHIL.B.RADHAKRISHNAN & P.BHAVADASAN, JJ.** -----------------------------------------------------------------------RFA No.318 of 2010-B -----------------------------------------------------------------------Dated 26th November 2010 ## Judgment ## Thottathil.B.Radhakrishnan, J. Defendants 1 to 3 and 5 in a suit for mandatory injunction and in the alternative for recovery of possession, are the appellants. Plaintiffs sued on the allegation that the first defendant - a partnership firm was permitted to use the plaint schedule property consisting of a building and 56 cents of land for the purpose of conducting timber business and that the said transaction is only a licence which was being renewed from time to time. 2. On the premise that the building and 16.5 cents on which it stands, was governed by the provisions of the Building (Lease and Rent Control) Act, 1965, the plaintiffs filed Ext.A7 rent control petition seeking eviction. Ext.A8 was the objection filed by the first defendant firm. The Rent Control Court dismissed that eviction petition by holding that the transaction was not a building lease as contended in those proceedings and the lease was for the entire extent of 56 cents RFA 318/10 2 with building standing thereon and therefore, it is not a building lease for the purpose of Act 2 of 1965. This was affirmed by the appellate authority. That led to a revision before this court at the instance of the plaintiffs in the suit from which this appeal arises. This court affirmed the decision of the appellate authority and the rent control court that the transaction was not a building lease. Nevertheless, this court further dilated on the question whether the transaction between the parties was a lease or licence and held as per Ext.A9 that the transaction was a licence. 3. On the face of the aforesaid finding of this court, the plaintiffs sued for mandatory injunction to direct the first defendant and the partners of the firm to vacate the premises which was covered by the licence. In the alternative, it was contended that if for some reason, the court were to conclude that the transaction is a lease, the plaintiffs may be granted a decree for recovery of possession since any such subsisting lease should also stand terminated. 4. In defence, the plea was that the transaction is not a licence, but a lease of land and that the defendants are RFA 318/10 3 entitled to the benefit of Section 106 of the Kerala Land Reforms Act, 1963. The court below, after hearing PW1 and DW1 and also taking on record the documents produced, held that the transaction between the parties is essentially a licence and even if it were a lease, the defendants were not entitled to the benefit of Section 106 of the Kerala Land Reforms Act. This is under challenge. 5. The learned counsel for the appellants argued that the court below erred in law in interpreting the provisions contained in Exts.A1 and A6 which are the last among the documents between the parties. According to him, those documents essentially relate to renewal of leases even on nomenclature, and there is no reason, intrinsic or extrinsic, to hold that the transaction is a licence and not a lease. He impeached the finding of the court below that clauses 3, 4 and 10 of Exts.A1 and A6 tend to show that the transaction is only a licence. Contending that the transaction is essentially a lease, it is argued that the lease was only of land for commercial purpose and the mere existence of a building in the land at the time of grant of lease does not, in any manner, deprive the RFA 318/10 4 defendants of the benefit of Section 106 of the Kerala Land Reforms Act. He attempted to distinguish the decision referred to by the court below in support of the proposition that the benefit of Section 106 of the Land Reforms Act would enure only to cases where the lease is of land only and such benefit could not be claimed in relation to a lease of land and building or a lease of land with building. 6. The learned counsel for the plaintiffs, contesting the appeal, argued that the issue relating to Section 106 of the Kerala Land Reforms Act is squarely covered against the appellants by the decision of the Apex Court in _**Chandy Varghese v. Abdul Khader**_ (2003(3) KLT 553 (S.C.), which stands to affirm the view taken by the Division Bench of this Court in _**Abdul Rahiman v. Iype**_ (1965 KLT 247). He also relied on the decision in _**T.K.Jacob v. Gracykutty**_ (AIR 1991 Kerala 281) to point out that when there is no absolute entrustment of the land, there is no question of a lease and the transaction could only be a licence. He also projected the findings in Ext.A9 decision of this court rendered _interparties_ and contended that notwithstanding the fact that the said RFA 318/10 5 decision ultimately went in favour of the defendants, there was an issue in that case which was pivotal to the decision and such a decision could be treated as an issue estoppel _interparties_ in a subsequent litigation. 7. The court below adverted to clauses 3, 4 and 10 of Ext.A1 and held that clause 3 reserves the right of the owner to enter into the property to take usufructs from the trees standing thereon. Clause 4 provides permission for the occupier/defendants to put up sheds in addition to the building thereon, for running a saw-mill. That clause also obliged the defendants to remove those sheds at their cost at the time of surrender of premises and the defendant was also granted time to remove the sheds and other materials at the time of eviction. Clause 10 of Exts.A1 and A6 respectively, were referred to by the court below to notice that the land was always to be deemed to be in the possession of the lessee. These were the clauses in Exts.A1 and A6 which, according to the court below, were of abundant importance notwithstanding the nomenclature of those documents as renewal of lease. RFA 318/10 6 8. We may note that this court had in Ext.A9 found that the transaction is a licence. 9. However, the court below has independently assessed the evidence and has come to the conclusion that the transaction is a licence. It did not merely act on Ext.A9 as if it constitutes res judicata. Either way, the conclusion arrived at by the court below independent of Ext.A9 is only in tune with what is stated in Ext.A9 and the decision of this court in _**Jacob**_ (supra) referred to by the learned counsel for the plaintiffs. We, therefore, do not find any ground to upset the finding of the court below in that regard. 10. The aforesaid decision notwithstanding, even if we were to assume that the transaction is a lease, the court below has held that in terms of the provisions of the Kerala Land Reforms Act, three types of leases are contemplated, i.e., to say, leases of buildings, leases of building and land, as also leases of land. With reference to Section 3(1)(iii) of the Kerala Land Reforms Act, it was held in _**Abdul Rahiman**_ (supra) that these three kinds of leases are excluded from fixity of tenure and after those categories of leases are excluded under that RFA 318/10 7 provision, one among them, namely, leases relating to lands whereon the lessees have constructed building prior to the relevant date, may give protection from eviction on the conditions in Section 106 of the Kerala Land Reforms Act, being satisfied. That precedent is rendered holding that the other two types of leases, namely leases of building and leases of building and land, are not entitled to fixity of tenure. The ratio of the decision of the Division Bench of this court stands affirmed by the law laid down by the Apex Court in _**Chandy Varghese**_ (supra). 11. The learned counsel for the plaintiffs may be right in saying that the classification of the lease into three categories have been made in the aforesaid decisions, with reference to Chapter II of the Kerala Land Reforms Act, while Section 106 falls within Chapter IV. That makes no difference because the classification noticed from Section 3(1)(iii) of the Land Reforms Act is utilised only for the purpose of interpreting Section 106 to understand that Section 106 takes care of only leases of lands followed by the lessee putting up buildings for commercial or industrial purposes before 30.05.1967 provided RFA 318/10 8 the lease of land was for commercial or industrial purposes. 12. The legislature uses in Section 106 of the Land Reforms Act, the clear terms - “.............................where on any land leased for commercial or industrial purpose, the lessee has constructed buildings for such commercial or industrial purpose....................”. If lease of land with buildings was also intended to be covered by Section 106, that would have been specifically expressed. As already noted, the Kerala Land Reforms Act contains necessary classification of leases into leases of land only, leases of buildings and also leases of land with building. In this view of the matter, we do not find any way to cull out any distinction from out of the law laid down in _**Abdul Rahiman**_ and _**Chandy Varghese**_ (supra). Therefore, the impugned decree and judgment stand and this appeal fails. In the result, this appeal is dismissed subject to the directions contained in the preceding paragraph. No costs. 13. At this point of time, the learned counsel for the appellants sought that the appellants be granted reasonable time to enable the defendants to shift out of the premises and deliver vacant possession. We grant a period of six months RFA 318/10 9 from now on condition that the appellants pay the occupational charges for the said period fixed @ Rs.5,000/- per month from December 2010 and also deposit the accrued arrears of occupational charges, if any, and file appropriate affidavit before the court below undertaking to so surrender. Let the deposit be made and affidavit be filed before the court below within a period of three weeks from now. It is clarified that the entire occupational charges for six months in terms of this direction have to be deposited in one go within a period of three weeks from now. Enforcement of the impugned decree will stand regulated accordingly. ## **THOTTATHIL.B.RADHAKRISHNAN, JUDGE** ## **P.BHAVADASAN, JUDGE** sta RFA 318/10 10