RCR.No.18 of 2011

**“CR”** IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE PIUS C.KURIAKOSE & THE HONOURABLE MR.JUSTICE K.HARILAL MONDAY, THE 28TH DAY OF NOVEMBER 2011/7TH AGRAHAYANA 1933 RCR.No. 18 of 2011 ( ) RCA.30/2008 of ADDL.RENT CONTROL APPELLATE AUTHORITY, ,KOTTAYAM RCOP.6/2007 of THE RENT CONTROL COURT, CHANGANACHERRY REVISION PETITIONER(S)/ADDL. RESPONDENTS 2 & 9 1 LAILA A.KHADER, W/O. T.A.ABDUL KHADER, SWAPNA HOUSE, STADIUM ROAD, CHANGANACHERRY. 2 BINEESH, W/O. T.A.ABDUL KHADER, SWAPNA HOUSE, STADIUM ROAD, CHANGANACHERRY. BY ADV.SRI.T.RAMPRASAD UNNI ADV.SRI.RAHUL VENUGOPAL RESPONDENT(S)/APPELLANT & ADDL.RESPONDENTS 3 TO 8 & COUNTER PETITIONER: 1 SCARIA, S/O. ABRAHAM, AGED 69 YEARS, ANITHOTTATHIL HOUSE, KIZHAKKEMURI, CHANGANACHERRY, CARRYING ON BUSINESS UNDER THE NAME AND STYLE: S.H.BOOK DEPOT, KAVALA, CHANGANACHERRY P.O. PIN - 686101 2 BEENA, SWAPNA HOUSE STADIUM ROAD CHANGANACHERRY PIN-686 101. 3 BINI, SWAPNA HOUSE STADIUM ROAD CHANGANACHERRY PIN-686 101. 4 BINU, SWAPNA HOUSE, STADIUM ROAD, CHANGANACHERRY, PIN-686 101. 5 BINDHU, SWAPNA HOUSE, STADIUM ROAD, CHANGANACHERRY, PIN-686 101. 6 BABITHA, SWAPNA HOUSE, STADIUM ROAD, CHANGANACHERRY, PIN-686 101. 7 BABY, SWAPNA HOUSE, STADIUM ROAD, CHANGANACHERRY, PIN-686 101. BY ADV.SRI. MATHEW JOHN FOR R1 ADV.SRI. P.S. SAJID FOR R3 TO R5 THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 28-11-2011 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **“CR” PIUS C. KURIAKOSE & K. HARILAL, JJ.** ................................................................ R. C. R. No.18 of 2011 ................................................................ Dated this the 28[th] day of November, 2011 ## **ORDER** ## **Harilal, J.** This revision petition is preferred against the judgment passed in RCA.30/08 on the files of the Rent Control Appellate Authority, Kottayam, declining the claim for eviction under Section 11(8) of the Kerala Buildings (Lease and Rent Control) Act (BRC Act). The revision petitioner/landlord filed the petition under Section 11(8) of the Kerala Buildings (Lease and Rent Control) Act and the learned Rent Controller allowed the petition as prayed for. The order passed by the Rent Controller was challenged in appeal on various grounds by the respondent/tenant. The appellate authority allowed the appeal on the findings that the requirement for additional accommodation for expanding the business is not bonafide and that the decision taken regarding comparative hardship under proviso to Section 11(10) of the BRC Act is not correct. The facts of the case can be summarised as follows:- ## **Facts:** The respondent/tenant is occupying the petition RCR 18/2011 : 2 : schedule shop room for conducting a book depot by name “S.H. Book Depot” on the northern portion of the ground floor of a multi-storied building by name 'Swapana Building' owned and possessed by the landlord and situating in the heart of Changanassery town. The landlord is occupying another shop room for conducting a jewellery by name “Swapna Jewellery” on the southern portion of the same floor adjacent to the petition schedule shop room. Thus, the landlord and tenant are occupying different portions of the same building. The need projected by the landlord is that the petition schedule shop room is highly and bonafide required for further expansion of his jewellery business. There is immense scope for expanding the business. The landlord further averred that the tenant is having two other book depots and the income derived from the petition schedule shop room is not the only source of income for his livelihood. By eviction no hardship would be caused to the tenant but it would be more advantageous to the landlord. The contentions raised in reply notice are false and untenable. The tenant contented that the landlord has enough vacant space in the existing RCR 18/2011 : 3 : show room itself for expanding the business and he is having sufficient vacant space on the 1[st] and II[nd] floors of the building also. In addition to that there is cellar portion adjacent to the landlord's jewellery. If the need is a bona fide one, he could have expanded the business by occupying the vacant space in the existing show room and on the 1[st] and II[nd] floors. Besides cellar portion is also laying vacant. In the year 2006, the landlord renovated the existing shop room by annexing the shop room surrendered by CPW4 and expanded the business. So there is no scope for a further expansion. No other buildings are available in the locality to shift his business. He further contended that the hardship which may be caused to him, if eviction is ordered, will outweigh the advantage that may be derived by the landlord. PW1 was examined and Exts.A1 to A4 were marked for the landlord and CPW1 to CPW4 were examined and Exts.B1 to B4 were marked for the tenant. Ext.C1 Commission Report also marked as court exhibit. ## 2. **Submissions at the Bar:** The learned counsel for the revision petitioner Smt. RCR 18/2011 : 4 : Saritha David Chungath submits that the judgment passed by the Appellate Authority is totally erroneous in law and is the result of total mis-appreciation of facts and evidence. The Appellate Authority failed to notice that the claim of the landlord for additional accommodation, being a genuine need, the tenant cannot insist that the need shall be met by occupying vacant space in the 1[st] or 2[nd] floor of the building. It will be unsuitable to the business like jewellery which needs the ground floor itself to attract the customers. The Appellate Authority ought to have found that the hardship which may be caused to the tenant by granting eviction will not outweigh the advantage that may be derived to the landlord by allowing the additional accommodation. 3. Per contra, Sri. Mathew John, the learned counsel for the respondent submits that the findings on which the appellate authority allowed the appeal are perfectly justifiable and are not vitiated by any kind of illegality, impropriety and irregularity. He reminded us the limited jurisdiction under Section 20 of the Kerala Buildings (Lease and Rent Control) Act. The evidence on record is sufficient to establish RCR 18/2011 : 5 : that the need projected for additional accommodation is only a pretext for eviction. Sri. Mathew John contended that vacant space is available in the existing show room itself. Similarly vacant space is available on the 1[st] and II[nd ] floors of the very same building and the landlord could have used that space for expansion of the business. He argued that CPW4 was in possession of a shop room having area of 1200 sq.feet and on the request of the landlord, he surrendered that shop room in the year 2006. After getting that space, the landlord renovated the showroom including the surrendered area and there is no scope for a further expansion in the year 2009 and these aspects sufficiently establish malafide behind the projected need. Lastly, the counsel argues that the appellate authority rightly assessed the advantage/hardship under proviso to Section 11(10) of the BRC Act and that findings are sustainable and justifiable on all points. ## 4. **Judicial Evaluation:** ## **Requirement of additional accommodation:** Admittedly the landlord and tenant are occupying RCR 18/2011 : 6 : and carrying on business in different portion of the same building of the landlord. So, in view of the rival contentions and jurisdiction under Section 20 of the BRC Act, the question to be considered is whether the findings on which the appellate authority allowed the appeal is vitiated by any kind of illegality, irregularity and impropriety? To answer the above question, the first point to be considered is whether the petition schedule shop room is bona fide required for the expansion of the business which is being carried on by the landlord in the adjacent shop room? The landlord has produced Ext.A1 certificate issued by Commercial Sales Tax Officer, Changanacherry to establish the progress and development of his business in every year. Ext.A1 would show that turn over of his business during the year 2005-2006 was about `17 lakhs and an amount of `17,431/- was paid as tax. But in 2007-08 turn over was `45 lakhs and amount of `2,25,584/- was paid as tax. There is considerable increase in the turn over of the business when comparing with the tax paid in the previous years. Therefore, there is sufficient documentary evidence to show that the business of the RCR 18/2011 : 7 : landlord is progressing year by year. The Appellate Authority declined the claim and doubted the bona fides of the landlord on the reason that sufficient vacant space is available in the 1[st] and II[nd] floors of the same building and the landlord could have expanded his business to the 1[st] floor and 2[nd] floors. The renovation and expansion of the business in the year 2006 was also taken as a ground to decline eviction. 5. In **Lekshmana Naikan v. Gopalakrishna Pillai** (1981 KLT 167) this Court held that “the test of bonafides under Section 11(8) read with Section 11(10) is not whether the landlord could very well afford to live without the additional accommodation, but whether in seeking the additional accommodation the landlord is pleading an honest purpose and not merely setting up an excuse to obtain eviction”. 6. In **Sait Nagee Purushotham &Co.Ltd.v. Vimalabai Prabhulal** [2005 (4) KLT 452 (SC)], the Supreme Court held that it is always the prerogative of the landlord to seek eviction if he requires the premises in question for his bona fide use for expansion of business and it is no ground to say RCR 18/2011 : 8 : that the landlords are already having their business at Chennai and Hyderabad and therefore, it is not genuine need. It is not the tenant who can dictate the terms to the landlords and advise him what he should do and what he should not. It is always the privilege of the landlord to choose the nature of the business and the place of business. ## 7. **Bonafides:** In the light of the above decisions we have considered the point whether the need for additional accommodation adjacent to the existing showroom in the very same floor is bonafide and honest? The availability of the space on the 1[st] and II[nd] floors will not serve the purpose of the landlord as the expansion by annexing an area adjoining to the existing show room is more beneficial and convenient rather than using a separate room on the 1[st] or II[nd] floor. The commission report shows that there is no direct access to the two floors from the public road and the staircase is built inside the building. There is no lift facility to go to the upper floors. The commissioner has reported that one has to walk in between two buildings and to walk through steps RCR 18/2011 : 9 : inside the building to reach the upper floors and the cellar portion, which is laying at a lower level is not suitable for expanding existing show room. The additional space adjacent to the existing show room, if available would enable him to continue his present business more advantageously, more profitable and lucrative manner. The above reasoning assumes much significance in the case of jewellery business, which needs well furnished and spacious show rooms to attract more customers. There is no reason to decline the cause of landlord who is desirous of expanding existing area by annexing his own adjacent room in occupation of tenant so as to get an attractive look to his existing showroom. An annex in another floor of the very same building unconnected with the existing show room would not be as good as expanded existing show room. 8. Sri. Mathew John argues that renovation was made in the year 2006 when the landlord got vacant possession of 1200 sq.feet from CPW4. So there is no need and scope for a further expansion in the year 2008. In **Lekshmana Naikan v. Gopalakrishna Pillai** (1981 KLT 167), this Court RCR 18/2011 : 10 : 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 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 RCR 18/2011 : 11 : 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 land lord 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 1[st] or II[nd] floor for the expansion of a jewellery which needs the attraction of the customers. Therefore, we hold that the petition schedule shop room is bona fide required for the expansion of the business which is being carried on by the landlord in the adjacent shop room. ## 11. **Hardship and advantages:** Next point to be considered is whether the hardship RCR 18/2011 : 12 : which may be caused to the tenant by granting eviction will outweigh the advantage that may be derived by the landlord from expansion of the business? 12. Regarding the burden of proof under the proviso to Section 11(10) of the BRC Act, the legal position is well settled by catena of decisions from **F.B. Desai v. C.M. Patel** (AIR 1974 SC 1059) to **Jose v. Antony** (2005 (1) KLT 252). The settled legal position is that “the burden is on the tenant to establish the hardship that may be caused to him if he is evicted from the tenanted premises. The landlord has to discharge his burden to show the advantage that he would derive if he gets the premises vacated. The rent control court has to balance both and determine whether the hardship which may be caused to the tenant would outweigh the advantage derived by the landlord”. This legal position was reiterated in **Beega Beugum v. Abdul Ahadkhan** (AIR 1979 SC 272), **Mandal Gopal v. Rohini** (1977 KLT 38) and in **Arjunan v. Eranu** (1991 (2) KLT 279). So both sides should lead evidence to substantiate facts stated under proviso to Section 11(10) of the Act. RCR 18/2011 : 13 : 13. In the instant case, the finding of the Rent Control Court was that the hardship that may be caused to the tenant will not outweigh the advantage of the landlord. But the appellate authority, though did not enter a positive finding regarding comparative advantage/hardship, in view of lack of bonafide, did not agree with the reasoning of the rent control court in favour of the landlord regarding comparative hardship. So the first point to be considered is what would be the hardship that may be caused to tenant, and what would be the advantages that may be caused to the landlord, by granting eviction. 14. Firstly we may assess the hardship that may be caused to the tenant by granting eviction. It is not disputed that the tenant is conducting two other book stalls in the same town and also he is conducting book binding unit in his residential house also. Ext.C1 Commission Report shows that several shop rooms are available in the same town for shifting the business and the evidence given by the tenant in cross examination shows that he has not enquired about the vacancy of those rooms and has no time to enquire about the same. So RCR 18/2011 : 14 : it is clear that the contention of the tenant that no rooms are available in the locality to shift his business is made without any proper enquiry. He further deposed that he is insisting for conducting business in the same shop room for his convenience to come from his residential house. Therefore, it could be seen that the income derived from the business which is being carried on in the petition schedule shop room is not the only source of income of the tenant. 15. Secondly, we may assess the advantage that may be derived to the landlord. In view of the progress in the volume of business year by year, we have already found that the need for additional accommodation is bonafide. Exts.A1 and A2 show the advantage he may derive by the expansion of business. Similarly Ext.C1 report would show that there is no sufficient space for expanding the business at present by using the existing show room. By the expansion of the existing show room he could get more customers, more volume of business and gain more profit and it enables him to compete with other jewelleries in the city. Now a days business of jewellery is highly competitive one which RCR 18/2011 : 15 : requires wide publicity and well furnished spacious show room. Therefore by granting eviction, the landlord would certainly get an opportunity to expand his business by setting up a more spacious show room which would give more business. Thus the landlord successfully established the advantages to be gained by granting the eviction. 16. In **Jose v. Antony** (2005(1) KLT 252) regarding the balancing of comparative hardship under the first proviso to section 11 (10) of the building lease and rent control act, this court held as follows. “The rent control court has to balance both and determine whether the hardship which may be caused to the tenant would outweigh the advantage derived by the landlord. When the court finds that hardship that may be caused to the tenant falls short of advantage derived by the landlord, the court has to lean in favor of the landlord. So also if the hardship and the advantage balance or neutralize or counter poise still the court will lean in favour of the landlord. On the other hand, if the court finds that the hardship that would be caused to the tenant will outweigh, offset or overbalance, the advantage RCR 18/2011 : 16 : derived by the landlord the balance will tilt in favor of the tenant and the claim for eviction has to be rejected.” ## 17. **Conclusion:** In the light of the above decision, we have to assess the comparative hardship by putting hardship in one scale of the balance against the advantage that may be derived on the other scale. 'Hardship' that may be caused to the tenant, if eviction is granted, has wide amplitude. There is nothing in that subsection which restrict the import of the expression hardship. The tenant is occupying the building for carrying on business for his livelihood. Therefore any kind of adverse circumstance under which the tenant will be deprived of his livelihood, if eviction is ordered, is significant and relevant to constitute hardship that may be caused to the tenant. We make it clear that any kind of adverse circumstance having fundamental and negative impact over the livelihood, if eviction is ordered, can be taken into consideration. So nonavailability of other buildings to shift his business alone is not sufficient to discharge the burden under Section 11(10) to get protection. In the instant case, Ext.C1 commission report RCR 18/2011 : 17 : shows that other suitable buildings are available in the locality. The tenant has not brought out any other adverse circumstances which would deprive him from his livelihood, by granting eviction. On the other hand, the landlord successfully established the advantages that may be caused to his jewellery business by expanding the existing business as stated in para 16, if eviction is granted. 18. For the foregoing reasons we find that the comparative hardship that may be caused to the tenant by granting it, will not outweigh the advantage to the landlord. The impugned judgment passed by the Appellate Authority is vitiated by irregularity and impropriety, and we are inclined to set aside the judgment passed by the appellate authority and restore the order passed by the Rent Control Court. 19. In the result, we set aside the impugned judgment passed by the appellate authority and restore the order of the Rent Control Court and consequently, this revision petition is allowed accordingly. 20. The learned counsel for the respondent sought one year time for vacating the petition schedule shop room. He RCR 18/2011 : 18 : also made a request to consider the availability of the space, if any, in the 1[st] floor for shifting his business if the landlord is willing to give it . Sri. Mathew John's request for one year time and his further request that a portion of the 1[st] or 2[nd] floor in the same building be let out to the tenant was very stiffly opposed by Smt.Saritha, the learned counsel for the revision petitioner. She submitted that the entire 1[st] and 2[nd] floors of the building have now been let out and no space is available. Having considered the rival submissions in the context of the time sought for as well as the request for letting out portions of the 1[st] or 2[nd] floors, we are of the view that despite the opposition of Smt.Saritha, respondent can be granted one year's time subject to the condition that with effect from 01/12/11 he pays occupational charges to the revision petitioner at the rate of ` 3,000/-per mensem. As for the further request that respondent should be inducted into the 1[st] or 2[nd] floor, we direct the execution court to explore the possibility of a settlement between the parties on this aspect before ordering delivery. It is further ordered that the respondent will get the benefit of RCR 18/2011 : 19 : time as allowed above only if he files affidavit before the execution court or the Rent Control Court as the case may be within two weeks from the date of receipt of a copy of this judgment undertaking that he shall give peaceful surrender of the building to the revision petitioner on or before 01/12/12 and undertaking further that he will pay occupational charges to the revision petitioner at the rate of ` 3,000/- per mensem till actual surrender of the building. ## **PIUS C. KURIAKOSE, JUDGE.** ## **K. HARILAL, JUDGE.** Kns/cl