Important point
It is always the prerogative of landlord that if he requires premises for his bona fide use for expansion of business and that cannot be a ground to say that landlord had already business at two places and it was not genuine need.

Headnote:(i) Kerala Buildings (Lease and Rent Control) Act, 1965—Section 11(3)—Eviction petition on a ground of bona fide need for two sons of landlord to start their business—1st appellant authority on re-appraisal of evidence found that one of the sons of landlord had requisite qualification for starting computer institution whiled to establish the same and others for extension of their business and thus need was bona fide—Order was upheld in revision by High Court—Appeal—Landlords had their business spreading over Chennai and Hyderabad but if they wanted to expand their business at Calicut where suit premises was situated, it could not be said to be unnatural thereby denying eviction—It was always prerogative of landlord to need premises for expansion of business—Need could not be said to be sham merely because some of the sons of landlord had multifarious activities and were already established in some other business and that one of sons had already gone to United States of America—View taken by appellate Court and High Court was justified.
       Held : The landlords have led evidence to show that one of their sons who had requisite qualification for starting a computer institute wants to establish the same at Calicut and others for extension of their business. The trial court as well as the first appellate court and the High Court examined the statements of P.Ws. 2 & 3 and after considering their evidence, the appellate court reversed the finding of the trial court and held that the need of the respondent-landlords to start business at Calicut, is bona fide & genuine. It was held that it cannot be said that a person who is already having business at one place cannot expand his business at any other place in the country. It is true that the landlords have their business spreading over Chennai and Hyderabad and if they wanted to expand their business at Calicut it cannot be said to be unnatural thereby denying the eviction of the tenant from the premises in question. It is always the prerogative of the landlord that if he requires the premises in question for his bona fide use for expansion of business this is no ground to say that the landlords are already having their business at Chennai and Hyderabad 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. However, the trial court held in favour of tenant-appellant. But the appellate court as well as the High Court after scrutinizing the evidence on record, reversed the finding of the trial court and held that the need of establishing the business at Calicut by the landlords cannot be said to be lacking in bona fide. (Para 4)
       When two sons are there and if they want to expand their business at Calicut then it cannot be said that the need is a sham one. It is not possible for the landlords and their sons to wait till the disposal of the case. They have to do something in life and they cannot wait till the appellant is evicted from the premises in question. It is common experience that landlord tenant disputes in our country take long time and one cannot wait indefinitely for resolution of such litigation. If they want to expand their business, then it cannot be said that the need is not bona fide. It is alleged that one of the sons of the landlords has settled in the U.S.A. That does not detract from the fact that the other sons of landlords want to expand their business at Calicut. Indian economy is going global and it is not unlikely that prodigal sons can return back to mother land. He can always come back and start his business at Calicut. On this ground we cannot deny the eviction to the landlords. (Para 5)
       (ii) Kerala Buildings (Lease & Rent Control) Act, 1965—Section 11(17)—Eviction petition on bona fide ground—Resisted on plea that tenant was in occupation of suit premises prior to 1940—Appellant tenant did not lead any evidence to show that same firm which was inducted tenant in 1918 was later on converted into a private limited company with same Directors—Benefit of Section 11(17) of the Act was rightly denied to appellant-tenant.
       Held : On review of all these cases it clearly transpires that the appellant-tenant has failed to substantiate that the private limited company which was formed in the year 1948 carried the same partners on the Board of Directors as were there prior to 1948. In view of the ratio laid down by this Court in the aforesaid decisions, various tests were laid down obtaining in the facts of each case. But the common ratio which runs in all these cases is that if there is voluntary transfer by the company to a newly incorporated company then in that case one has to plead and prove that all the members of the old firm continued in the new firm and it is essentially the same. The only exception which has been made is that the transfer of the old company to a new one is under the statute or law. Therefore, in the present case after verifying the records of the case, we have found that all the three courts have consistently observed that the benefit of Section 11(17) of the Act cannot be extended to the appellant in this case and we are of opinion that the view taken by the courts below is correct and there is no ground to interfere in this appeal. (Paras 19 and 20)

Judgment

A.K. Mathur, J.—This appeal is directed against the order passed by the Division Bench of the High Court of Kerala whereby the Division Bench by its order dated 9.11.2001 has affirmed the finding of the appellate court directing eviction of the tenant under Section 11(3) of the Kerala Buildings (Lease and Rent Control) Act, 1965 (hereinafter referred to as the “Act”) and denying eviction to the landlord under Sections 11(4)(i) and 11(4)(ii) of the Act and dismissed both the revision petitions.

2. Brief facts which are necessary for disposal of this appeal are that the building in question was owned by a joint Hindu family of which Nagjee Amarsee was the senior most member. He had a younger brother, Purushotham Amarsee. Nagjee Amarsee had a son, Jayananthan Amarsee. Purushotham Amarsee had three sons, one of whom died at the age of 20. He had two surviving sons namely, Naranjee and Makeklal. There was a partnership firm consisting of the members of the joint family. The building in question was let out to the firm. The firm was the tenant and later on it was converted into a private limited company. In a partition, the major portion of the building was allotted to the group represented by the landlords. Gradually, the interest of the landlords in the company was taken over by the members of the family representing the tenant’s group. The property scheduled to the rent control petition was a major portion of the building which was admittedly set apart to the share of the branch of the family represented by the landlords. The landlords filed a suit for eviction on the ground that the respondent Nos. 5, 6, & 9 (herein) had completed their education and were sitting idle and they wanted to start business of their own in the scheduled building and they needed the scheduled building for their own occupation at Calicut. Therefore, they claimed eviction of the tenant under Section 11(3) of the Act. They also pleaded the ground of sub-letting to a tailor who was impleaded as a party in the rent control proceedings. It was pleaded that sub-letting was unauthorized and without the consent of the landlords. Hence, the landlords were entitled for eviction under Section 11(4)(i) of the Act. They also alleged material alteration in building and sought a decree under Section 11(4)(ii) of the Act. The tenant resisted the eviction petition and pleaded that he was perpetual lessee and could not be evicted by the landlords. He also denied the bona fide need of plaintiffs and denied alteration in the premises in question. It was also pleaded that the tenancy has commenced prior to 1940. As such, the tenant could not be evicted on the ground of bona fide need by virtue of Section 11(17) of the Act. The tenant contested that the landlords were not entitled to an order of eviction. The parties led evidence before the Rent Controller. The Rent Control Court held that the landlords were not entitled to an order of eviction either under Section 11(3) of the Act or under Section 11(4)(i) of the Act. The landlords preferred an appeal before the appellate authority. The appellate authority on re-appraisal of the relevant evidence came to the conclusion that the landlords had made out a claim for eviction under Section 11(3) of the Act on the ground of bona fide need for their own occupation but they could not substantiate their claim for eviction under Sections 11(4)(i) & 11(4)(ii) of the Act. Thus, the appellate authority partly allowed the appeal filed by the landlords and granted a decree of eviction on the ground of bona fide need under Section 11(3) of the Act while the plea of sub-letting and material change in premises under Sections 11(4)(i) & 11(4)(ii) of the Act was declined. Both the landlords and the tenant filed revision petitions i.e. the landlord’s revision petition was for decree of eviction on the ground of sub-letting and alteration in premises under Sections 11(4)(i) & 11(4)(ii) of the Act and the tenant filed the revision petition

Click Here to Read the rest of this document

2005 Supreme(SC) 606

Important pointIt is always the prerogative of landlord that if he requires premises for his bona fide use for expansion of business and that cannot be a ground to say that landlord had already business at two places and it was not genuine need.

Cases Referred (9)

Important point
It is always the prerogative of landlord that if he requires premises for his bona fide use for expansion of business and that cannot be a ground to say that landlord had already business at two places and it was not genuine need.