VERY IMPORTANT POINT
A petition u/s. 21(1)(h) of the Karnataka Rent Control Act, 1961 for eviction of a tenant under a contractual fixed term lease (in this case for 99 years), would not be maintainable on the ground of reasonable and bona fide requirement of the landlord before the expiry of the lease (by efflux of time) because of non-obstante clause in Section 21 of the Karnataka Rent Control Act, 1961.
[Editorial Note : This case depicts that even after more than 2 decades there is difficulty in understanding the law declared by seven Judges, judgment in AIR 1979 SC 1745 : even by the Apex Court. This can cause anxiety among landlords and tenants in the area of Rent Control vis-a-vis transfer of property Act, the so called general law of landlord and tenant].

Headnote:Transfer of Property Act, 1882-Sections 107 and 111-How lease is created and determined-Karnataka Rent Control Act, 1961-Section 21 (1)(h)-Effect of non-obstante clause on grounds of eviction in case of fixed term lease-Lease for 99 years-Lessor filing petition u/s 21(1)(h) of Karnataka Rent Control Act, 1961 on ground of his bona fide need for commercial purpose before expiry of said lease-Lessee alleging petition not maintainable before expiry of fixed term-District Munsif decreed the petition u/s 21(1)(h)-In revision, District Judge reversed it on ground Karnataka Rent Act is not applicable to lease which is of permanent nature -On further revision to High Court, District Judge reversed and District Munsif restored-Appeal by Lessee to Supreme Court-Whether a petition u/s 21(1)(h) of the Karnataka Rent Control Act, for eviction of a tenant, would be maintainable on the ground of reasonable and bona fide requirement of the landlord? (No)-Appeal allowed-AIR 1993 Karnataka 90 (FB) which was overruled by Supreme Court in ILR (1994) Karnataka 1659 (Supreme Court) approving contrary view in AIR 1997 Karnataka 311(FB) is held to have laid down correct interpretation of AIR 1979 SC 1745 (seven Judge decision).
       Held : A perusal of the judgment of the High Court indicates that one of the two contentions raised before it was that the finding of the District Court, holding that it was a perpetual lease is erroneous. According to the lessor, the lease was for a fixed period of 99 years. Alternatively, the submission was even if it was a permanent lease, provisions of Section 21 of the Karnataka Rent Control Act would be applicable for seeking eviction of the lessee on the basis of the provisions of the Statute. The High Court came to the conclusion that lease in question is fixed term contractual lease of 99 years with option of one renewal. It will however not be necessary, for us, to go into the question relating to perpetual or non-perpetual nature of lease in view of submission made on behalf of the appellant that their endeavour will be to show that the Karnataka Rent Control Act would not apply even for termination of a fixed term subsisting lease. Therefore, no submissions have been made before us to show that the lease is a perpetual lease. We would, therefore, proceed to examine the other question relating to applicability of Section 21(1)(h) of the Karnataka Rent Control Act to a subsisting fixed term contractual lease, as in the case in hand. (Paras 7 and 8)
       The effect of non obstante clause, in our view has been rightly explained in the Full Bench decision in the case of Sri Ramakrishna Theatres Ltd. v. General Investments and Commercial Corporation Ltd. & Ors. AIR 1993 Karnataka 90 (FB). In one of the decision of this Court reported in 1989(2) SCC 686 Modern Hotel v. V.K. Radhakrishnaiah, it has been held that period of a subsisting lease for fixed term could not be curtailed in absence of a forfeiture clause in the lease. The effect of the non-obstante clause contained under Section 21 of the Karnataka Rent Act on the fixed term contractual lease may be explained as follows:-
        (i) On expiry of period of the fixed term lease, the tenant would be liable for eviction only on the grounds as enumerated in Clauses (a) to (p) of sub-section (1) of Section 21 of the Act.
        (ii) Any ground contained in the agreement of lease other than or in addition to the grounds enumerated in Clauses (a) to (p) of sub-section (1) of Section 21 of the Act shall remain inoperative.
        (iii) Proceedings for eviction of a tenant under a fixed term contractual lease can be initiated during subsistence or currency of the lease only on a ground as may be enumerated in Clauses (a) to (p) of sub-section (1) of Section 21 of the Act and it is also provided as one of the grounds for forfeiture of the lease rights in the lease deed, not otherwise.
        (iv) The period of fixed term lease is ensured and remains protected except in the case indicated in preceding paragraph.
       With great respect therefore, in our view, the decision in the case of Dhanapal Chettiar (supra) has not been correctly construed in the case of Sri Lakshmi Venkateshwara Enterprises Pvt. Ltd. (supra) and it no more holds good nor the Full Bench decision following it, in the case of Bombay Tyres International Ltd. (supra). The earlier judgment of the full Bench of the High Court in the case of Sri Ramakrishna Theatres Ltd.(supra) lays down the law correctly. As a result of the discussion held above, the impugned judgment of the High Court cannot be sustained. The appeal is allowed and the judgment and order passed by the High Court is set aside. In the facts and circumstances of the case, there would however be no order as to costs. (Paras 16, 17, 18, 19, 20)

JUDGMENT

Brijesh Kumar, J.-The question that directly falls for consideration in this appeal is whether or not, a petition under Section 21 (1)(h) of the Karnataka Rent Control Act, for eviction of a tenant under a contractual fixed term lease, would be maintainable on the ground of reasonable and bona fide requirement of the landlord. On certain occasions earlier, the question has been considered by this Court as well as High Courts including Full Benches of the Karnataka High Court but there does not seem to be a cohesion of views.

2. The brief factual background giving rise to the point is that in the year 1905, the mother and guardian of one Gurappa Channabasappa Belaguri, holding a power of attorney, leased out his non-agricultural land to Anant Parashuram Nagaonkar for a period of 99 years, to establish a factory. In the year 1907, the lessee Nagaonkar aforesaid, assigned the lease in favour of Ramdas Vithaldas Darbar for a sum of Rs. 8,500/- The original parties to the agreements have all died and their heirs have stepped into their shoes and they are parties to the present proceedings.

3. In the year 1986 the lessors served a notice to the lessees calling upon them to vacate the premises on the ground that the lessees did not pay rents for the period 1.3.85 to 31.3.86 and that the property was also bona fide required for their occupation. Reply to the notice is said to have been sent by the lessees denying default in payment as alleged and asserted inter alia that the lessors had no right to terminate the lease in view of the 99 years fixed term lease under the agreement. Thereafter, however, the lessors filed an application under Section 21(1)(h) and 21(1)(p) of the Karnataka Rent Control Act 1961 on the ground that the premises were bona fide required by them for starting their own business,

4. Ths lessees contested the petition on the ground that the fixed term lease was subsisting which expires only on 29.2.2004. It was also pleaded that in fact it was a perpetual lease which could not be terminated. The trial court, namely, the District Munsif allowed the petition and passed an order dated 2.3.1990 for eviction of the lessees under clause (h) of sub-section (1) of Section 21 of the Act holding that it was not a permanent lease and that Section 21 of the Karnataka Rent Control Act would be applicable to the lease in question.

5. Both parties preferred revision before the District Court, the lessors against part of the order rejecting their petition under Clause (p) of Section 21(1) of the Karnataka Rent Control Act whereas the lessees against the part of the order of evicting them under Cl. (h) of sub-section (1) of Section 21 of the Act. The learned District Judge held that it is a lease of permanent nature. Section 21 (1) of the Karnataka Rent Control Act therefore will not be applicable. The order of the District Munsif was reversed except the part by which eviction under Section 21(1)(p) of the Act was refused.

6. The respondent-lessors preferred a revision before the Hon ble High Court. It has been allowed, holding that the Distt. Court erred in finding that the lease was perpetual in nature. It is further observed that there cannot be any presumption in favour of perpetual lease since there should be clear and unambiguous language to infer such a lease. The provisions of the Karnataka Rent Control Act have been held to be applicable, de hors the contract of lease and, the lessor has been found to be entitled to move a petition for eviction of the lessee under Section 21(1)(h) of the Act, even before the expiry of fixed term of 99 years.

7. A perusal of the judgment of the High Court indicates that one of the two contentions raised before it was that the finding of the District Court, holding that it was a perpetual lease is erroneous. According to the lessor, the lease was for a fixed period of 99 years. Alternatively, the submission was even if it was a permanent lease, provisions of Section 21 of the Karnat

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2001 Supreme(SC) 1169

Cases Referred (2)