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1961 Supreme(Pat) 42

PATNA HIGH COURT
V.Ramaswami and N.L.Untwalia JJ.
Jugal Kishori Devi
Versus
Ashok Mills And Foundries
Miscellaneous Judicial Case No. 282 of 1959 ;
Appeal From Appellate Decree No. 1018 of 1958 ;
Decided On : MARCH 14, 1961

The definition of "building" under rent control legislation should be interpreted in light of the true nature and character of the lease, considering the primary purpose and subject-matter of the agreement.

Headnote:

LEASE - BUILDING - DEFINITION - LEASE OF LAND FOR CONSTRUCTION OF FACTORY AND OTHER BUILDINGS - WHETHER A LEASE OF BUILDING - BIHAR BUILDINGS (LEASE, RENT AND EVICTION) CONTROL ACT, 1947 (BIHAR ACT III OF 1947), SEC. 2 (AA).

Fact of the Case:

The dispute arose from a lease agreement executed in 1948 for a period of 30 years, where the lessee was granted the right to erect factory and other buildings on the leased land. The issue was whether the lease fell under the purview of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 (Bihar Act III of 1947), which regulated the letting of buildings and controlled their rent.

Finding of the Court:

The court held that the lease in question was not governed by the provisions of Bihar Act III of 1947, but by the more general provisions of the Transfer of Property Act. The court reasoned that the true subject-matter of the lease was not a "building" as defined in the Act, but vacant land for the purpose of erecting buildings for industrial use.

Issues: 1. Whether the lease agreement in question falls within the definition of "building" under the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 (Bihar Act III of 1947).

Ratio Decidendi: The court applied the legal test of determining the true nature and character of the lease to ascertain its classification. It held that the primary purpose of the lease was to provide vacant land for the lessee to construct factory and other buildings, rather than the leasing of an existing building. The court relied on precedents from the Madras and Travancore-Cochin High Courts, which had adopted a similar approach in interpreting the definition of "building" in their respective rent control laws.

Final Decision: The court issued a writ of certiorari under Article 226 of the Constitution, quashing the order of the Commissioner of Patna Division that had held the lease to be governed by Bihar Act III of 1947. The court also dismissed the lessee's appeal challenging the trial court's decision that the lease was not subject to the provisions of the Act.

Judgment

1. In Miscellaneous Judicial Case No. 282 of 1959 respondent No. 1 took a registered lease from Sri Guru Prasad Singh of certain property comprising holding No. 30 of Ward No. 7 of the Dinapur Nizamat Municipality on the 16th of January, 1948, for a period of thirty years. On the 16th of May, 1953, Guru Prasad Singh made a gift of the property to the Petitioners and notice of the gift was sent to respondent No. 1. Subsequently, in the year 1956, respondent No. 1 made an application for fixation of fair rent under Sec. 5 of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947, Bihar Act III of 1947. On the 24th of January, 1957, the Controller dismissed the application on the ground that the lease was governed not by the Provisions of Bihar Act III of 1947, but by the Transfer of Property Act, Respondent No. 1 took the matter in appeal to the Collector, and the appeal was dismissed on the 4th of December, 1958. Respondent No. 1 took the matter in revision to the Commissioner who reversed the decision of the Collector and held that the lease was governed by Bihar Act III of 1947, and the matter was remanded to the Controller for fixation of fair rent. The order of the Commissioner is dated the 4th of March, 1959. Against this order the petitioners have moved the High Court for grant of a writ in the nature of certiorari under Article 226 of the Constitution.

2. With regard to the same lease the Petitioners instituted a Money Suit, namely Suit No. 79 of 1956, against respondent No. 1 for recovery of arrears of rent. The suit was contested by the respondent on the ground that no fair rent had been fixed. But the learned Subordinate Judge overruled the contention of the defendants and held that the case was not governed by Bihar Act III of 1947, but by the Transfer of Property Act. In this view the Subordinate Judge granted a decree to the plaintiffs for arrears of rent. An appeal against the decree was dismissed by the Additional District Judge of Patna. The defendants to the suit have presented Second Appeal No. 1018 of 1958, against the decision of the Additional District Judge of Patna.

3. In Miscellaneous Judicial Case No, 282 of 1959 and Second Appeal No. 1018 of 1958, therefore, the same question of law arises for determination, namely, whether the lease executed by Guru Prasad Singh in favour of respondent No. 1, dated the 16th of January, 1948, is governed by the provisions of Bihar Act III of 1947 or whether the lease is governed by the provisions of the Transfer of Property Act.

4. It is necessary at this stage to set out the relevant provisions of Bihar Act III of 1947. The Act is entitled :-

-

"An act to regulate the letting of buildings and the rent of such buildings and to prevent unreasonable eviction of tenants therefrom in the Province of 2 Bihar."

The preamble of this Act states as follows:-

"Whereas it is expedient to regulate the letting of buildings, to control the rent of such buildings and to prevent unreasonable eviction of tenants therefrom in the Province of Bihar;

It is hereby enacted as follows:-

x x x x x

"Sec.2 (aa) of the Act defines the expression "building" to mean -- "any building or hut or part of a building or hut, let or to be let separately for residential or non-residential purposes, and includes -- (i) the garden, grounds and out-houses, if any, appurtenant to such building or hut or Part of such building or hut; and

(ii) any furniture supplied by the landlord for use in such building or hut or part of a building or hut."

The provisions of the lease dated the 16th of January, 1948, which is the subject-matter of a controversy in the present case, are set out in Annexure A to the application at Page 10 of the paperbook. Paragraph 1 of the lease states that -- "In consideration of the rent hereinafter reserved and the covenants on the part of the Lessees hereinafter contained in the document the lessor hereby demises to the Lessees for the Purpose of building factory and ot

























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