Urmese J. Valooran v. V.K. Padma

## **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 23RD DAY OF OCTOBER 2014/1ST KARTHIKA, 1936** **RCRev..No. 502 of 2005 ( )** **--------------------------RCA 61/2004 OF VTH ADDL. DISTRICT COURT, ERNAKULAM RCP 129/2002 OF ADDL. MUNSIFF & RENT CONTROL COURT, ERNAKULAM** **-------------------** ## **PETITIONER/APPELLANT/RESPONDENT :** **-------------------------------------------------------------** **URMESE J. VALOORAN PROPRIETOR, “FAMILY'S” CONVENT ROAD, ERNAKULAM, PRESENTLY RESIDING AT NO. 25, 2ND FLOOR, AMBADI CHAMBERS NEAR S.R.V. SCHOOL, ERNAKULAM.** **BY ADVS.SRI.MATHEW JOHN (K) SRI.SUJESH MENON V.B. SRI.BASIL MATHEW** **RESPONDENT/RESPONDENT/PETITIONER :** **---------------------------------------------------------------** **V.K. PADMA W/O. LATE A.S. MENON “AMBADI”, CONVENT ROAD, ERNAKULAM, COCHIN 35.** **BY ADVS. SRI.SANTHEEP ANKARATH SRI.K.P.SUDHEER** **THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 23-06-2014, THE COURT ON 23-10-2014 PASSED THE FOLLOWING:** ## **Mn** ## **K.T.SANKARAN & A.MUHAMED MUSTAQUE, JJ.** ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ R.C.R.No.502/2005 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ **Dated this the 23[rd] day of October, 2014** ## **O R D E R** ## **Muhamed Mustaque, J.** This revision is filed challenging concurrent order of eviction under Section 11(3) of the Kerala Buildings (Lease and Rent Control) Act, 1965 (for short, the “Act”) by the tenant. 2. The need projected is for the daughter of the landlady, namely, Geetha to start a business in the tenanted premises. Geetha is a partner in furniture business carried under the name and style, 'Woodman'. It is stated that Geetha is the owner of the shoproom in the first floor in the tenanted premises and tenanted premises being in the ground floor, she finds ground floor is most suitable for starting a furniture business. It appears that during cross examination, the need that is projected by her is that of ## **`R.C.R.No.502/2005`** ## **-:2:-** partnership firm as well. It has also come out that an adjacent residential building is vacant. The tenanted premises was let out to the tenant for non residential purpose and the tenant, it appears, is doing a business in garments by name, “Family”. During cross examination of Geetha, she has deposed that partnership firm will pay rent to the landlady after it start occupying the tenanted premises. 3. In the light of factual background as above, Shri Mathew John appearing for the tenant, has raised three questions of law in this revision, viz.- (1) whether need of a dependant can be the need of a partnership firm of which dependent is a partner; (2) whether payment of rent by the partnership firm after eviction will amount to creation of tenancy and if so, a petition under Section 11(3) of the Act is maintainable to create a tenancy after eviction and; (3) whether failure to plead and prove special reasons for non occupation of a residential building in possession of the landlady is fatal in eviction of non ## **`R.C.R.No.502/2005`** ## **-:3:-** residential building under first proviso to Section 11 (3). 4. In the pleadings, the need projected is that of the dependant-Geetha, However, during the course of cross-examination, she has deposed that the need is that of partnership as well. An eviction that can be sought under Section 11(3) is for the landlord himself or for the purpose of occupation of any member of his family dependent on him. So long as the need projected by the petitioner does not vary substantially or fundamentally to cause prejudice to the tenant, there is no impediment in law in granting eviction once landlord has established _bona fides_ . The court in such situation is only concerned about whether requirement could be accommodated within the ambit of Section 11(3) of the Act as such. It is in this background, the need projected by the dependant has to be understood. Section 11(3) of the Act, clearly mentions that eviction can be granted for own occupation or for the occupation of any member of his family. That means the ## **`R.C.R.No.502/2005`** ## **-:4:-** dependant is permitted to occupy and landlord retains ultimate control of the tenanted premises after eviction. The occupation of the tenant can be for himself or through a partnership firm in which the dependant is a partner. The need of the dependant can be the need of the partnership firm in which the dependant is a partner. In law, partnership is a relationship between persons who have agreed to share profits of the business carried on by all or any one of them acting for all. The test of determination as to the occupation in such situation is the real and actual involvement of the dependant in the business. This has to be decided with reference to the pleadings and evidence. If the need is not projected for exclusive occupation by the firm, independent of the dependent, there is nothing wrong in seeking eviction for the dependent which may benefit the firm as well. It has to be noted that partnership is only a compendious mode of persons, who have agreed to carry on business in partnership. Thus, it is always open to the dependant ## **`R.C.R.No.502/2005`** ## **-:5:-** to form partnership for running a business. It is for the landlord or the dependant to decide the nature and structure of the business proposed by them. So long as the need set up is not a claumoflage or clandestine to transfer possession of the building to a third party, such arrangement between the dependant and the landlord need not be doubted. In this case there is nothing on record to disbelieve the claim of the landlady. The pleadings and evidence clearly disclose the active and real participation of the dependent in the business. Therefore, we are of the view that the need projected by the dependant to occupy the building by the partnership firm, in which she is a partner, is _bona fide_ and maintainable under Section 11(3) of the Act. 5. As has been noted above, Section 11(3) of the Act commands, eviction sought is to retain control of the possession with the landlord. In cases where the eviction is sought for the member of the family who is dependent on him, the dependant can use the building for his occupation. He cannot claim possession of the ## **`R.C.R.No.502/2005`** ## **-:6:-** building. In the Rent Control Act, possession and occupation are used distinctly in different contexts. In lease, the essential feature is creation of exclusive transfer of possession. An eviction cannot be sought under Section 11(3) of the Act for transferring possession to a third party or even to a dependent. Section 11(3) of the Act does not contemplate “need “ to transfer possession by the landlord. On the other hand, it clearly indicates legal and actual possession must be with the landlord after eviction and landlord himself shall occupy or he can permit his dependant to occupy the tenanted premises. In the case of lease, there is a transfer of exclusive possession. Permitting someone to occupy the building is nothing but a licence. Therefore, eviction under Section 11(3) of the Act cannot be sought for creating another tenancy by the landlord as it only permits occupation by the landlord or by the dependant. The question is whether the payment of rent by the dependant or by the partnership firm consisting of the ## **`R.C.R.No.502/2005`** ## **-:7:-** dependant can be considered as a creation of tenancy. The question is to be addressed with reference to the facts involved. If the dependant or partnership firm in which the dependant is a partner seeks exclusive possession as against the landlord, necessarily, the payment of rent will imply that landlord has intended to create a lease. In the absence of claim for exclusive possession by the dependant or the partnership firm, there cannot be any creation of lease. In law, one can be in possession of tenanted premises and the other can be the user of the tenanted premises. Possession is an interest in the property. Transfer of Property Act defines “lease” as transfer of a right to enjoy the property (see Section 105). Mere occupation of the property does not create “interest” in favour of the occupant (see definition of licence under Section 52 of Easement Act). The Hon'ble Supreme Court in **C.M Beena and another Vs. P.N Ramachandra Rao [(2004) 3 SCC 595]** explained licence as follows: ## **`R.C.R.No.502/2005`** ## **-:8:-** “Only a right to use the property in a particular way or under certain terms given to the occupant while the owner retains the control or possession over the premises results in a licence being created; for the owner retains legal possession while all that the licensee gets is a permission to use the premises for a particular purpose or in a particular manner and but for the permission so given the occupation would have been unlawful.” In this context the possession denotes control on use of the building and occupation denotes actual use of the building. There is nothing wrong in landlady collecting rent for occupation by the dependant or by the partnership firm in which dependant is a partner. Mere payment of rent as occupational charges will not create a lease by implying that there is an exclusive transfer of interest, (possession). The evidence adduced clearly indicate that the dependant has no claim for eviction to have exclusive possession and the offer made to pay the rent is to create a tenancy. ## **`R.C.R.No.502/2005`** ## **-:9:-** 6. The learned counsel Shri Mathew John, relying on the decision of this Court in **New Woodlands Hotel v. Varkey [1974 KLT 867], Raghavan v. Govindan Nambiar [1995 (1) KLT 596], and Janatha Drugs v. Maithri Construction [2007 (4) KLT 625]** argued that in the absence of special reasons stated by the landlady for non occupation of the adjacent residential building for the purpose of requirement of the dependant, application for eviction is hit by the first proviso to Section 11(3) of the Act. In this context it is apposite to refer to the first proviso to Section 11 (3): “Provided that the Rent Control Court shall not give any such direction if the landlord has another building of his own in his possession in the same city, town or village except where the Rent Control Court is satisfied for special reasons, in any particular case it will be just and proper to do so.” There is no dispute to the fact that landlady has another residential building adjacent to the tenanted premises. It has also come out that landlady is not ## **`R.C.R.No.502/2005`** ## **-:10:-** residing in that building (presumably vacant). The building referred in the first proviso according to the learned counsel for the petitioner (tenant) will include any building in the possession of the landlady. It is submitted that therefore, even if the tenanted premises has been let out for non residential purposes, landlady has to explain special reasons for non occupation of the residential building for the need projected under Section 11(3) of the Act. Learned counsel further submits that the landlady failed to give any reason for non occupation of the residential building and, therefore, eviction under Section 11(3) is hit by first proviso to Section 11(3) as held in the judgments referred to above. 7. Section 2(1) defines “building” with reference to the nature and purpose for which the building is let or intended to be let. The purpose is either for residential or for non residential purposes. Therefore, if the building is let out for residential purpose, the building is a residential building and if ## **`R.C.R.No.502/2005`** ## **-:11:-** the building is let for non residential purpose, the building is understood as a non residential building. The first proviso with regard to building must be understood with reference to the purpose for which the building was let. In this case the building was let for non residential purpose. In such situation, the landlady need not plead or prove special reasons for non occupation of the residential building in a claim for eviction of non residential building. 8. In view of the discussion as above, we do not find any merit in the Rent Control Revision and we accordingly dismiss the Rent Control Revision. However, we grant four months' time to the tenant to vacate the building on the following terms and conditions: i. The tenant shall file an affidavit unconditionally undertaking to vacate the building within four months from today. The affidavit shall be filed before the Rent Control Court within one month from today. ## **`R.C.R.No.502/2005`** ## **-:12:-** ii. The tenant shall pay the entire arrears of rent, if any, within six weeks from today and shall promptly continue to pay the monthly rent till he actually vacates the building. No costs. Sd/- **K.T.SANKARAN, JUDGE** Sd/- **A.MUHAMED MUSTAQUE, JUDGE** ms