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Madras High Court
RAMAPRASADA RAO,SURYA MURTHY
Md.Sultan Moideen - Appellant
Versus
Official Trustee, Madras - Respondent
Decided On : 06/21/1977
MADRAS BUILDINGS (LEASE AND RENT CONTROL) ACT - LEASE DEED - INTERPRETATION - SECTION 2(8) - TENANT - LEGAL REPRESENTATIVES - CONTINUITY IN TENANCY - REQUIREMENTS - AMENDMENT - RETROSPECTIVE OPERATION - EXTS. A-1 AND A-2 - NATURE OF TRANSACTION - AGENCY WITH INTEREST - NO LANDLORD-TENANT RELATIONSHIP - SUIT FOR POSSESSION - MAINTAINABILITY - NOTICE OF DETERMINATION OF TENANCY - VALIDITY - OFFICIAL TRUSTEE' S REPRESENTATION OF SHAREHOLDERS - CHALLENGABILITY.
Fact of the Case:
The Official Trustee, Madras, entered into an arrangement with M. A. Mohamed Burhanuddin Sahib under Exs. A-1 and A-2, styled as lease deeds, enabling Sahib to collect rents from the Connemera Market in Pudupet, Madras. Sahib failed to surrender possession after the lease was determined by the Official Trustee. The Official Trustee filed a suit for possession, which was decreed in his favor. Sahib's legal representatives appealed, arguing that the Madras Buildings (Lease and Rent Control) Act, 1960 (Act XVIII of 1960) applied, barring the suit, and that the notice of determination of tenancy was invalid. The appellants also filed an application to set aside an order by Mohan J. allowing the Official Trustee to constructively take possession of the property.
Finding of the Court:
The court held that the Act did not apply because Exs. A-1 and A-2 did not create a landlord-tenant relationship between the Official Trustee and Sahib. The court found that Sahib never occupied or conducted business in the premises and that the arrangement was more akin to an agency with an interest, where Sahib was authorized to collect rents and appropriate the excess collections, while paying a fixed rent to the Official Trustee. The court also held that the amendment to Section 2(8) of the Act in 1973, which clarified the definition of 'tenant' to include legal representatives who were associated with the deceased tenant in the business carried on in the premises, was merely declaratory of the pre-existing legislative intent and therefore applied retrospectively. The court further held that the notice of determination of tenancy was valid and that the Official Trustee's representation of only a portion of the shareholders did not affect the maintainability of the suit.
Issues: 1. Whether the Madras Buildings (Lease and Rent Control) Act, 1960 applied to the arrangement between the Official Trustee and Sahib. 2. Whether the notice of determination of tenancy was valid. 3. Whether the Official Trustee's representation of only a portion of the shareholders affected the maintainability of the suit. 4. Whether the amendment to Section 2(8) of the Act in 1973 applied retrospectively.
Ratio Decidendi: 1. The court held that the Act did not apply because Exs. A-1 and A-2 did not create a landlord-tenant relationship between the Official Trustee and Sahib. The court found that Sahib never occupied or conducted business in the premises and that the arrangement was more akin to an agency with an interest, where Sahib was authorized to collect rents and appropriate the excess collections, while paying a fixed rent to the Official Trustee. 2. The court held that the notice of determination of tenancy was valid, as it was issued by the Official Trustee, who represented the entire estate, except for the second defendant, who had become a legal representative of the first defendant after his death. 3. The court held that the Official Trustee's representation of only a portion of the shareholders did not affect the maintainability of the suit, as the other shareholders could work out their rights against the Official Trustee. 4. The court held that the amendment to Section 2(8) of the Act in 1973, which clarified the definition of 'tenant' to include legal representatives who were associated with the deceased tenant in the business carried on in the premises, was merely declaratory of the pre-existing legislative intent and therefore applied retrospectively.
Final Decision: The court dismissed both appeals, upholding the judgment of the lower court and the order of Mohan J.
RAMAPRASADA RAO, J. :- These two appeals are somewhat connected. L. P. A. No. 12 of 1976 is directed against the judgment of N. S. Ramaswami J. in App. No. 19 of 1972 and O. S. A. 3 of 1976 is against an order of Mohan J. in Appln. No. 3234 of 1975 in O. P. 158 of 1920. We shall first deal with the L. P. A. No. 12 of 1976.
2. M. A. Mohamed Burhanuddin Sahib entered into an arrangement with the Official Trustee, Madras, under Exs. A-1 and A-2 dated 12-5-1961 and 4-1-1963, which were styled as lease deeds, in and by which Mohamed Burhanuddin Sahib (hereinafter referred to as the original tenant) obtained a right to collect the rents from a market called Connemera Market in Pudupet, Madras. There are a number of stalls in the said market which is used as a daily market. Apparently for administrative convenience, the Official Trustee enabled Mr. Sahib to collect the rents from the various stalls in the market and pay him a monthly rent of Rs. 970 and the tenant was obliged to perform various other obligations which he undertook under the lease deed. For the purposes of this appeal, it is unnecessary to state in detail the terms and conditions under which the arrangement was entered into between the Official Trustee and late Mr. Sahib. The lessee, as Mr. Sahib was called, was to meet all the commitments as regards electricity, cause minor repairs and pay the water supply charges as also the charges to the Corporation of Madras for running the market in accordance with the rules of the Corporation of Madras, and the lessor, i.e., the Official Trustee, was to pay the property tax on the premises and continue the arrangement as above for a period of five years from 1-3-1961, with option to Sahib to renew the so-called lease for a further period of three years on the same terms and conditions enumerated in what is known as the lease deed. Under Ex. A-4, the Official Trustee determined the lease with effect from 31-3-1969 and called upon Sahib, who was the first defendant in the main suit instituted by the Official Trustee, to surrender possession. The first defendant failed to do so. Hence the suit for possession was filed by the Official Trustee impleading the said Mohammed Bahrunuddin Sahib as the first defendant and the second defendant who is said to have purchased a share in the property in ancillary proceedings. The Official Trustee impleaded the above second defendant only by way of abundant caution and never sought relief against him. The first defendant' s contentions were threefold. Firstly, his contention was that the Madras Buildings (Lease and Rent Control) Act, XVIII of 1960 (hereinafter referred to as the Act) was applicable to the building and therefore, a bare suit for eviction in a civil court and for consequential possession does not lie. He questioned the jurisdiction of the Civil Court to entertain the suit for possession. Secondly, he would say that the notice of determination of the tenancy was not in order and therefore, the suit has to fail. He also contended that the Official Trustee did not represent all the interests of the shareholders and that, therefore, the suit as such and as framed is not maintainable. The suit was originally tried in the City Civil Court and it resulted in a decree in favour of the Official Trustee. The first defendant filed an appeal to this court, but he died pending appeal on 11-5-1972. Thereupon, the present appellants including the second defendant were brought on record as the deceased first defendant' s legal representatives. N. S. Ramaswami J. once again considered the objections of the appellants and would not agree with them. In particular, he would not countenance the contention that in view of the amendment of S. 2 (8) of Act XVIII of 1960 by Act XXIII of 1973, the present proceeding for possession against them is incompetent as they have secured a statutory right to continue in the premises under the provisions of Act XVIII of 1960 and that, therefore, the suit f
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