IN THE HIGH COURT OF BOMBAY
Gajendragadkar P.B. and Gokhale B.N. , JJ.
Appellants: Vinayak Gopal Limaye
Vs.
Respondent: Laxman Kashinath Athavale
Civil Revn. Appln. Nos. 695 and 941 of 1955
Decided On: 12.03.1956
Counsels:
For Appellant/Petitioner/Plaintiff: V.M. Tarkunde, Adv.
For Respondents/Defendant: Y.V. Chandrachud, Adv.
Rents - Building Leases - Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947) - Section 6(1)
Fact of the Case:
The case involved the interpretation of Section 6(1) of the Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947) in relation to building leases. The Court considered whether the lease in question attracted the provisions of the Rent Act, particularly in the context of open plots being let for residence, education, business, trade, or storage.
Finding of the Court:
The Court found that the purpose of the lease must be determined from the terms of the lease itself, and if the lease falls within the categories specified in Section 6(1), the provisions of Part II of the Act would apply. The Court emphasized that the question of whether a particular lease falls within Section 6(1) is a question of fact and must be determined on a case-by-case basis.
Issues: The main issue was whether building leases in respect of open plots could fall under Section 6(1) of the Act, particularly in relation to the purpose for which the premises were let.
Ratio Decidendi: The Court held that a fair and reasonable construction of Section 6(1) should be adopted, and an open plot should not be excluded from Section 6(1) solely on the ground that it cannot be used for residence or education unless a structure is built on it. The purpose for which the open plot was let by the lessor to the lessee should be the determining factor in deciding whether the lease falls under Section 6(1).
Final Decision: The Court set aside the lower court's decision and remanded the matters back for the fixation of standard rent in accordance with the law.
1. These two civil revisional applications along with tour others have been ordered to be placed before a Division Bench because it appeared that they raised a common question of law under Section 6 Sub-section (1) of the Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947). In all these cases, one of the questions which arose for decision in the Courts below was whether the lease in question attracted the provisions of the Rent Act, and naturally the decision of this question depended on the construction of Section 6 (1). Section 6 Sub-section (1) provides that, in areas specified in Schedule I, Part II of the Act shall apply to premises let for residence, education, business, trade or storage. If the lease in question can be regarded as falling within the purview of Section 6 (1) then the provisions of Part II would apply. If, on the other hand, the lease does not fall within Section 6 (1), the provisions of Part II would be inapplicable. All the leases in these cases can be broadly described as building leases, and the decisions under revision disclose a sharp difference of opinion on the question as to whether a building lease can attract the provisions of Section 6 (1) or not. We were told that in some districts, and even in the Court of Small Causes at Bombay, there has been a divergence of judicial opinion on this point, and so the learned Advocates who appeared In the six civil revision applications before us attempted to argue the matter on general lines and suggested that we should lay down some general principles which would apply to leases which are sometimes described as building leases. In one set of cases it has been held that an open plot can never be let for residence because unless a building is constructed on the open plot the, purpose of residence can never be served, and so a building lease on this preliminary consideration would he excluded from the operation of Section 6 (1) of the Act. On the other hand, some decisions have proceeded on the view that even an open plot can be let for residence if the terms of the lease clearly indicate that the object of the lessor and the lessee was that the plot should be used for a building which should ho let out to tenants for their residence. There does not appear to he uniformity in the view taken in some of the unreported decisions of this Court; but no decision which binds us has been cited before us on this point and the question can, therefore, be decided by us on the" basis that it is res integra.
2. It is, however, necessary to emphasize at the outset that the question as to whether a particular lease falls within section 6(1) of the Act; or not would always be a question of fact. It would be possible to lay down certain general consideration which would govern the construction of section 6(1), But it would, be difficult, if not impossible and, we apprehend, it would be unwise to lay down any general principles which would apply to the construction of ail leases which can be described in a general way as building leases. A building lease is a lease by the lessor in respect of an open plot, and the lessee under such a lease is expected to build on the open plot. The building thus constructed by the lessee may be used either for residence or for education, business, trade or storage or any other purpose. In dealing with such leases, it would be necessary to remember the legal position regarding the rights of the lessor and the lessee. Section 108(h) of the Transfer of Property Act provides that, in the absence of a contract to the contrary, the lessee may, even after the determination of the lease, remove all things which he has attached to-the earth, which of course includes structures or buildings put up by him. In other words this section contemplates a dual ownership in such cases. The lessor is the owner of the open plot and the lessee who builds a structure on the open plot is the owner of the structure. It is because of the two
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