VERY IMPORTANT POINTS
1. According to the definition of the "Building" in the State Rent Act the building would include any other additional super structure in the same premises and appurtenant land.
2. The words "part of the building" in Kerala Rent Control Act do not refer to the land on which the building is constructed but it refers to any other super structure which is part of that main building e.g. in addition to the main building if there is any other super structure in the said premises i.e. motor garage or servant quarter and the same would be part of the building and not the land on which the building has been so constructed.
3. When the tenanted shop has been completely destroyed, the tenancy right stands extinguished as the demise must have a subject matter and if the same is no longer in existence, there is an end of the tenancy and therefore, Section 108(B)(e) of the Act has no application in case of premises governed by the State Rent Act when it is completely destroyed by natural calamities.
4. If a building is governed by the State Rent Act the tenant cannot claim benefit of the provisions of Sections 106, 108 and 114 of the Transfer of Property Act.

Headnote:(i) Kerala Buildings (Lease and Rent Control) Act-Section 11 r/w Transfer of Property Act, 1882-Section 108(B)(e)-Eviction of tenant whose premises stood destroyed completely-Shop let out-Shop razed to ground due to accidental fire-Tenant constructed new shop on same site without consent of landlord-Suit for eviction and mandatory injunction for demolition of new shop-Tenancy extinguished on total destruction of premises governed by Rent Control Act-Building does not include vacant land over which premises one stood-When shop was completely destroyed tenancy right stood extinguished for want of subject matter of demise-Section 108(B)(e) has no application in case of premises governed by Rent Control Act when it is completely destroyed by natural calamities-Eviction Petition under Rent Control not possible-Remedy available is civil suit for recovery of possession of land.
       If a building is governed by the State Rent Act the tenant cannot claim benefit of the provisions of Sections 106, 108 and 114 of the Transfer of Property Act. A perusal of Section 108(B)(e) shows that where a premises has fallen down under the circumstances mentioned therein the destruction of the shop itself does not amount to determination of tenancy under Section 111 of the Act. In other words there is no automatic determination of tenancy and it continues to exist. If the tenancy continues, the tenant can only squat on the vacant land but cannot use the shop for carrying on business as it is destroyed and further he cannot construct any shop on the vacant land. Under such circumstances it is tenant who is to suffer as he is unable to enjoy the fruits of the tenancy but he is saddled with the liability to pay monthly rent to the landlord. It is for such a situation the tenant has been given an option under Section 108(B)(e) of the Transfer of Property Act to render the lease of the premises as void and avoid the liability to pay monthly rent to the landlord. Section 108(B)(e) cannot be interpreted to mean that the tenant is entitled to squat on the open land in hope that in future if any shop is constructed on the site where the old shop existed he would have right to occupy the newly constructed premises on the strength of original contract of tenancy. The lease of a shop is transfer of the property for its enjoyment. On destruction of the shop the tenancy cannot be said to be continuing since the tenancy of a shop presupposes a property in existence and there cannot be subsisting tenancy where the property is not in existence. Thus when the tenanted shop has been completely destroyed, the tenancy right stands extinguished as the demise must have a subject matter and if the same is no longer in existence, there is an end of the tenancy and therefore: Section 108(B)(e) of the Act has no application in case of premises governed by the State Rent Act when it is completely destroyed by natural calamities. (Para 19)
       The provisions of Kerala Rent Control Act would show that where a building is governed by the State Rent Act the landlord is not free to let out the building to a tenant of his own choice or on a rent which he may dictate to the tenant and the tenancy that comes into existence is not a contractual tenancy and further the State Rent Act is applicable to the building and not to the vacant land. In V. Kalpakam Amma v. Muthurama Iyer Muthurkrishna Iyer, AIR 1995 Kerala 99 the Kerala High Court relying up on the definition of the "building" in the State Rent Act held that there cannot be a building without a site and once a structure is put up in the land the site becomes part of the structure and thereafter the site becomes part of the building and on that basis the High Court held that once the premises covered by the State Rent Act is razed to the ground tenancy continues to survive in respect of the vacant land. In our view this is not the correct interpretation of Section 2(1) of the State Rent Act. Section 2(1) uses the words "part of a building or hut". The words "part of the building" in Kerala Rent Control Act do not refer to the land on which the building is constructed but it refers to any other super structure which is part of that main building e.g. in addition to the main building if there is any other super structure in the said premises i.e. motor garage or servant quarter and the same would be part of the building and not the land on which the building has been so constructed. So far the appurtenant land which is beneficial for the purpose of use of the building is also the part of the building. Thus according to the definition of the "Building" in the State Rent Act the building would include any other additional super structure in the same premises and appurtenant land. We are, therefore, of the view that the interpretation put by the Kerala High Court of Section 2(1) for holding that the words "part of a building" means the land on which the building has been constructed is not correct. The provisions of the State Rent Act clearly show that the State Rent Act is self contained Act and the rights and liabilities of landlord and tenant are determined by the provisions contained therein and not by the provisions of the Transfer of Property Act or any other law. The rights of a landlord under the general law are substantially curtailed by the provisions of the State Rent Act as the Act is designed to confer benefit to tenants by providing accommodation and to protect them from unreasonable eviction. In the present case what we find is that the subject matter of tenancy was the shop room which was completely destroyed on account of accidental fire and it was not possible for the tenant to use the shop for which he took the shop on rent. After the shop was destroyed the tenant, without consent or permission of the landlord, cannot put up a new construction on the site where the old structure stood. If it is held that despite the destruction of the shop, tenancy over the vacant land continued unless the tenant exercises his option under Section 108(B)(e) of the Act the situation that emerges is that the tenant would continue as a tenant of a non-existing building and liable to pay rent to the landlord when he is unable to use the shop. The tenancy of the shop, which was let out, was a super structure and what is protected by the State Rent Act is the occupation of the tenant in the super structure. If the argument of appellant s counsel is accepted then it would mean that although the tenant on the destruction of the shop cannot put up a new structure on the old site still he would continue to squat on the vacant land. Under such situation it is difficult to hold that the tenancy is not extinguished on the total destruction of the premises governed by the State Rent Act. Under English Law in a contractual tenancy in respect of building and land the liability to pay the rent by the tenant to the landlord continues even on the destruction of the building whereas there is no liability of the tenant to pay rent to the landlord on the destruction of the premises governed by the State Rent Act. Therefore, the view taken by the Bombay High Court in Hind Rubber Industries Pvt. Ltd. v. Tayebhai Mohammedbhai Bagasarwalla (AIR 1996 Bombay 389) does not lay down the correct view of law. (Paras 21 & 22)
       However, the situation would be different where a landlord himself pulls down a building governed by the State Rent Act. In such a situation the provisions contained in Section 11 of the State Rent Act would be immediately attracted and the Rent Control Court would be free to pass appropriate order. (Para 23)
       The tenancy in the present case was of a shop room which was let out to the tenant. What is protected by the State Rent Act is the occupation of the tenant in the super structure. The subject matter of tenancy having been completely destroyed the tenant can no longer use the said shop and in fact he has ceased to occupy the said shop. Section 11 of the State Rent Act does not provide for eviction of the tenant on the ground of destruction of the building or the super structure. Thus when there is no super structure in existence the landlord cannot claim recovery of possession of vacant site under the State Rent Act. The only remedy available to him is to file a suit in a Civil Court for recovery of possession of land. In view of the matter the Civil Court was competent to entertain and try the suit filed by the respondent landlord. (Para 24)
       (ii) Transfer of Property Act, 1882-Sections 108(B)(e) r/w Section 106, 114 and 111-Rights and liabilities of lessee-If building is governed by State Rent Act tenant cannot claim benefit of provisions of Sections 106, 108 and 114-When tenanted premises has been completely destroyed by natural calamities tenancy right stands extinguished-Section 108(B) (e) has no application in case of premises governed by State Rent Act. (Para 19)
       (iii) Kerala Buildings (Lease and Rent Control Act)-Section 2(1)- Building - Part of building -Meaning of-Words part of building do not refer to land on which building is constructed-Appurtenant land which in beneficial for purpose of use of building is part of building-Building would include any additional superstructure in the same premises and appurtenant land. (Para 22)

JUDGMENT

Khare, J.-In these appeals, two questions that arise for consideration are these - (a) whether the tenancy in respect of the premises governed by The Kerala Buildings (Lease and Rent Control) Act (hereinafter referred to as "the State Rent Act") is extinguished by destruction of the subject matter of tenancy i.e. the premises by natural calamities and (b) on the destruction of property whether the civil court has jurisdiction to entertain and try the suit for recovery of possession of land brought by the landlord.

2. The case in brief is that the predecessor-in-interest of the respondent landlord let out a shop to the defendant-appellant herein. The said shop was razed to the ground due to accidental fire on 9.1.1990 and there remained only the vacant land. The appellant-tenant, after destruction of the shop constructed a new shop on the same site without the consent and permission of the respondent-landlord. Under such circumstances, the respondent landlord filed a suit for mandatory injunction for demolition of the new shop constructed by the appellant and for recovery of possession of the land on which the old super structure stood. The contention of the appellant in the suit was that he was entitled to put up a new super structure in place of the old one since by virtue of Section 108(B)(e) of the Transfer of Property Act (hereinafter referred to as "the Act") he, having not opted to render the tenancy void, the tenancy subsists. The trial court was of the view that after the destruction of the shop the tenancy in respect of land still subsists and the plaintiff is not entitled to recover the possession of the site over which the old shop existed. However, the trial Court granted decree for mandatory injunction directing the appellant to demolish and remove the new shop constructed by him as the same having been constructed without the consent and permission of the landlord. The plaintiff-respondent, as well as the defendant-appellant, filed separate appeals against the decree of the trial court. The First Appellate Court dismissed both the appeals and affirmed the decree of the trial court. Aggrieved, both the defendant-appellant and the plaintiff-respondent preferred two separate Second appeals. The High Court allowed the second appeal filed by the plaintiff-respondent, whereas, the second appeal filed by the defendant-appellant was dismissed. The High Court was of the view that on the total destruction of the premises by natural calamity the tenancy stood extinguished and, therefore, the landlord is entitled to the decree for recovery of possession of the land. It is in this way the defendant-appellant is in appeal before this Court.

3. Before we proceed to discuss the questions formulated above, it is necessary to state the admitted facts of this case. It is not disputed that the shop of which the appellant was a tenant was governed by the State Rent Act. It is also not disputed that the tenanted shop was completely destroyed due to natural calamity i.e. by fire and it was not pulled down by the landlord. It is also admitted that as a result of destruction, the land on which the super structure stood was reduced to vacant land. It is also not disputed that what was let out to the appellant was shop and not land beneath the shop. It is also not disputed that the tenant made a new construction on the same site without the permission and consent of the landlord and the same was unauthorised.

4. Learned counsel appearing for the appellant urged that even if the tenanted shop was totally destroyed, there was no destruction of the tenancy. His argument is that the appellant is entitled to squat on the vacant land by virtue of Section 108(B)(e) of the Act, as he has not exercised the option for rendering the tenancy void. In other words, the argument is that even if the tenanted shop has been completely destroyed making it impossible for the tenant to occupy or use it, still the tenancy subsists in favour of the appellan

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2000 Supreme(SC) 2038

Cases Referred (4)