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2024 Supreme(Ker) 1563

IN THE HIGH COURT OF KERALA AT ERNAKULAM
A. MUHAMED MUSTAQUE, P. KRISHNA KUMAR, JJ.
CATHOLIC SYRIAN BANK LIMITED – Petitioner
Versus
R. LATHA – Respondent
R.C.R. Nos. 85, 103 of 2020
Decided On : 10-12-2024

Advocates:
Advocate Appeared:
For the Petitioners: R. BINDU, PRASANTH M.P.
For the Respondents: T.C. SURESH MENON, B. DEEPAK

IMPORTANT POINT
Bona fides in eviction cases must be assessed objectively, focusing on the landlord's genuine intention rather than the specifics of the proposed construction.

Headnote:

(A) Kerala Buildings (Lease and Rent Control) Act - Sections 11(3) and 11(4)(iv) - Eviction petition filed by a bank for reconstruction was allowed under Section 11(4)(iv), but denied under Section 11(3) for bona fide needs. The court emphasized that bona fides must be assessed objectively, focusing on the landlord's genuine intention. The authorities erred in their subjective analysis, leading to the conclusion that the need projected by the bank was bona fide. (Paras 1, 4, 6, 7)

(B) The court clarified that the nature of the building does not negate the bona fides of the landlord's need, and the inquiry should focus on the authenticity of the need rather than the specifics of the proposed construction. (Paras 5, 6)

Facts of the case:

The bank, as the landlord, sought eviction of tenants for reconstruction under the Act. The Rent Control Court allowed eviction for reconstruction but denied it for bona fide needs, leading to the bank's revision petition. (Paras 1, 2)

Findings of Court:

The court found that both authorities had erred in their assessment of the bona fide need and warranted interference under Section 20 of the Act, ordering eviction. (Paras 6, 8)

Issues: The main issues were the assessment of bona fides for eviction and whether the nature of the proposed construction affected the bona fide need. (Paras 3, 5)

Ratio Decidendi: The court ruled that bona fides must be assessed objectively, and the absence of mala fides necessitates granting eviction. (Paras 4, 6)

Result: Rent Control Revisions are allowed, granting tenants two months to vacate the building. (Para 8)

JUDGMENT :

A. MUHAMED MUSTAQUE, J.

1. The bank is the revision petitioner in both the rent control revisions. The bank is the landlord in respect of a row of buildings. The bank filed rent control petition for eviction under Sections 11(3) and 11(4)(iv) of the Kerala Buildings (Lease and Rent Control) Act (for short “the Act”). The Rent Control Court as well as the Appellate Authority allowed eviction under Section 11(4)(iv) of the Act for reconstruction. However, it declined the eviction sought under Section 11(3) for bona fide needs of the bank. The bank, aggrieved by the order declining eviction under Section 11(3) of the Act, has come up with the revision invoking Section 20 of the Act.

2. The bank had produced Ext.A7 plan. Ext.A7 plan is the proposed construction after eviction. Ext.A8 is also plan. These plans indicate that there exists twelve shop rooms in the proposed construction. Taking note of the fact that the plans indicate that the ground floor has been divided into twelve shop rooms and bank cannot occupy those shop rooms for the purpose of banking business, The Rent Control Court as well as the Rent Control Appellate Authority found that bona fide need claimed is bereft of bona fides.

3. What is bona fides? Does it require a subjective element for assessment or it requires to be objectively considered or not.

4. How the Rent Control Court will have to assess bona fides? The bona fides is the state of mind. The adjective “bona fide” prefixing the verb “need” is to denote the mind of the Landlord, the adjective is the focus of enquiry conducted by the Rent Control Court rather than subjecting “need” for analyse with elements that would constitute a need. The Court will have look for external factors that might suggest bad faith, ulterior motives etc. The term “bona fide” when used to qualify the verb “need” signifies the Landlord, genuine intention or honest state of mind. Therefore, the Courts' enquiring should center in determining the authenticity or sincerity of this need, rather than deconstructing the concept of “need” into abstract components. It may be difficult to discern such a state of mind when an institution itself seeks eviction. Nevertheless, it is possible if circumstances shrouded in seeking such eviction reflects mala fides of collective mind of an institution, the Court can very well decline such relief. After all, even an institution or any other legal entity is managed by human whose decision is collectively expressed through a resolution of such body or institution.

5. The nature of building or type of proposed constructions is not decisive to hold that the petition for eviction for bona fide need lacks bona fides. It is always open for such banking institution to alter or modify the nature or lie of such building. In what manner a banking business will have to be accommodated in such building is purely a matter to be decided by that institution. If it contains different compartmentalised rooms, how to utilise that compartmentalised rooms is left to the choice of the landlord. But the Court cannot find lack of bona fides by merely looking at the nature of proposed building. If there is no mala fides, the enquiry thereafter will have to be confined to the objective analyse of such need in the circumstances.

6. Here, we note that both the authorities did not reject the need projected by the bank. In that sense, it follows that need is bona fide. The enquiry in such matter, therefore, needs to be focal on the objective part relatable to the bona fides. In the light of the fact that there is no reason to reject the need projected and in the absence of any mala fides, the Court will have to invariably order eviction rather than rejecting such application for eviction. Absolutely no evidence has come out on record that shows that the need is mala fide.

7. Both the authorities erred themselves in analysing the provisions under Section 11(3) in true perspective by travelling beyond to analyse the need in ve

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