Law Web: Whether tenancy rights will be extinguished if tenanted building is destroyed?

The tenancy cannot be said to have been determined by attracting applicability of the doctrine of frustration consequent upon demolishing of the tenancy premises. Doctrine of frustration belongs to the realm of Law of Contracts; it does not apply to a transaction where not only a privity of contract but a privity of estate has also been created inasmuch as lease is the transfer of an interest in immovable property within the meaning of Section 5 of the Transfer of Property Act (wherein the phrase 'the transfer of property' has been defined), read with Section 105, which defines a lease of immovable property as a transfer of a right to enjoy such property. (See observations of this Court in this regard in Raja Dhruv Dev Chand Vs. Raja Harmohinder Singh & Anr., MANU/SC/0179/1968 : 1968 (3) SCR 339). It is neither the case of the appellants nor of the respondents No.2 and 3 that the subject matter of lease was the building and the building alone, excluding land whereon the building forming subject matter of tenancy stood at the time of creation of lease.

20. In Woodfall's Laws of Landlord and Tenant (28th Edition, Vol.1) the relevant law is so stated:

Where the lessee covenants to pay rent at stated period (without any exception in case of fire), he is bound to pay it, though the house be burnt down; for the land remains, and he might have provided to the contrary by express stipulation, if both parties had so intended. And this rule applies, although the lessee's covenant to repair contain an exception in case of fire. Similarly, an action for use and occupation still lies in respect of the whole period of the tenancy notwithstanding the destruction of the premises by fire." (Para 1-0778)

In a lease of land with buildings upon it the destruction of even the entirety of the buildings does not affect the continuance of the lease or of the lessee's liabilities under it, unless so provided by express contract." (Para 1-2055)

A demise must have a subject-matter, either corporeal or incorporeal. If the subject-matter is destroyed entirely, it is submitted that the lease comes automatically to an end, for there is no longer any demise. The mere destruction of a building on land is not total destruction of the subject-matter of a lease of the land and building, so the demise continues. But if by some convulsion of nature the very site ceases to exist, by being swallowed up altogether or buried in the depths of the sea, it seems clear that any lease of the property must come to an end." (Para 1-2056)

21. A lease of a house or of a shop is a lease not only of the superstructure but also of its site. It would be different if not only the site but also the land beneath ceases to exist by an act of nature. In the present case the appellants who are the successors of the tenancy right have demolished the superstructure but the land beneath continues to exist. The entire tenancy premises have not been lost. Moreover, the appellants cannot be permitted to take shelter behind their own act prejudicial to the interest of the respondent No.1 under whom the respondents no.2 and 3 were holding as tenants and then inducted the appellants.

22. In D.G. Gouse & Co. (Agents) Pvt. Ltd. Vs. State of Kerala & Anr., MANU/SC/0330/1980 : (1980) 2 SCC 410, while dealing with Entry 49 of List II of the Seventh Schedule of the Constitution, making a reference to Oxford English Dictionary, this Court has held that the site of the building is a component part of the building and therefore inheres in the concept or ordinary meaning of the expression 'building'. Referring to Corporation of the City of Victoria Vs. Bishop of Vancouver Island, AIR 1921 PC 240, it was held that the word 'building' must receive its natural and ordinary meaning as 'including the fabric of which it is composed, the ground upon which its walls stand and the ground embraced within those walls".

IN THE HIGH COURT OF BOMBAY

Civil Revision Application No. 115 of 2010

Decided On: 10.01.2012

Pius Bonaventure Fernandes Vs. Manu Narang

Hon'ble Judges/Coram:

G.S. Godbole, J.

Citation: 2012(2) Bom CR,2012(2) ALLMR 112,2012(2) MHLJ68

1. Can a Landlord who has accepted the status of the Plaintiff as a tenant turn back and say that the Plaintiff is not the tenant? Can a Landlord who has made a statement before the Court that he has given undertaking to the BMC that the Defendant Landlord will allot the Plaintiff portion of equivalent area at the same place and location of the repaired/reconstructed building thereafter turn back and say that the tenant has no right to claim any tenancy in respect of the building which is constructed after demolition of the old structure? These are the principal questions which have to be answered in this Civil Revision Application.

2. By an order dated 31/3/2010, the learned Single Judge (J. H. Bhatia, J) had directed that the Petition will be finally disposed of. Subsequently by order dated 27/6/2011 rule was issued and liberty was granted to apply for a fixed date of hearing. Accordingly, the Petition has been heard by me. Respondent No. 1(c) Ashok Narang has died but his heirs are already on record as Respondent Nos. 1(a) and 1(b).

BRIEF RESUME OF FACTS

3. It is necessary to give a brief resume of facts. The Petitioner was the tenant of residential premises situated at 6th Floor on the rear side of the building known as 'Gorden House' situated at 5, Battery Street, Colaba, Mumbai for an approximate carpet area of 364.36 sq. feet. One Manu Narang (Predecessor in title of the Respondents) purchased the said building and thus became landlord. In the month of May, 1989 a portion of the said building collapsed. As a result of which the Mumbai Repairs and Reconstruction Board which is a constituent Board of Maharashtra Housing and Area Development Authority (MHADA) established under the Maharashtra Housing and Area Development Act, 1976 took steps under Chapter 8 of the MHAD Act, 1976. The Petitioner was granted temporary transit accommodation in a transit camp at Borivali in the month of November, 1989. The Petitioner was thus an occupant in respect of the said building "Gorden House".

4. On 3rd September, 1999, the Petitioner filed R.A.D. Suit No. 1412 of 1999 in the Court of Small Causes against Manu Narang for the following reliefs :

(a) For a declaration that the Plaintiff is the tenant of the Defendant in respect of the premises in the repaired/ reconstructed building known as "Gordon House", or by any other name situate at 5, Battery Street, Colaba, Mumbai 400 039 and for an order and direction to the Defendant to allot the Plaintiff and put him in occupation and possession of a suitable and adequate premises in the said building;

(b) for interim and ad-interim reliefs;

(d) for the cost of this suit.

Subsequently by an amendment prayer (a)(i) was added to the plaint which reads thus :

(a)(i) That the Defendants be decreed and ordered to put back the Plaintiff in possession of the newly constructed premises in lieu of his old tenanted premises admeasuring 650 sq. ft. or equivalent thereto viz. 6th floor, rear side (front side 3rd floor), building known as Gordon House, or by any other name situate at 5, Battery Street, Colaba, Mumbai 400 039.

5. Briefly stated it was the case of the Petitioner that he was monthly tenant of the premises on the 6th floor, rear side and that the Defendant was landlord. That on 11th May, 1989 a portion of the building collapsed whereby the Petitioner was dishoused and he was allotted temporary accommodation at Borivali in the transit camp. That the tenants of the building came together and made efforts for redevelopment of the building, but for want of funds they were unable to do so. That the Plaintiff was the only dishoused person. That it was the obligation of the Defendant to provide alternate accommodation once MHADA had granted NOC for redevelopment. That MHADA had issued notice of ejectment from the transit camp on 7/1/1998. That the Defendant got the new building plans sanctioned on 13/2/1997. That the Plaintiff was evicted from the transit camp on 27/4/1999. The plaint was subsequently amended to narrate subsequent developments which had taken place namely that the Defendant had constructed the building. That Plaintiff had filed Writ Petition No. 2202 of 2003 seeking a writ of mandamus which was disposed of by the Division Bench on 12/9/2003 on the ground that the declaratory suit was pending.

6. In this suit the Plaintiff filed Injunction Notice No. 4455 of 1999 and following order was passed on 21/9/1999.

ORDER

Ld. Advocate for both the parties are present. Ld. Advocate for the Defendant submits that the Plaintiff is the tenant of the Defendant is not dispute & he has given undertaking to the BMC that the Defendant will allot the Plaintiff the portion of the equivalent area at the same place and location of the repaired building & required for the time for further reply.

In view of above it is adjourned to 5/10/1999 at 3.00 p.m. for reply.

Sd/-

Judge

(V.D.Dongare)

21/9/1999

C. R. No. 17.

Thus the status of the Plaintiff as a tenant was not only admitted but a representation was made to the Court that the Petitioner/ Plaintiff would be given accommodation in the newly constructed building as a tenant of the landlord.

7. In the year 2000, the Petitioner filed an Appeal alongwith Mis. Application No. 72 of 2000 before the Appellate Officer of the Government of Maharashtra exercising powers under the MHAD Act, 1976 and by Order dated 27/4/2001 said appeal was allowed with the following order.

ORDER

The eviction by Respondent-Board of the Appellant of suit premises is unwarranted and unauthorised.

The Respondent Board is herewith ordered to restore the possession of suit premises under rule 24 Chapter V of the Maharashtra Housing Area and Development (Appeal) Regulation 2000.

Parties to bear their own respective cost.

Principal, Appellate Office

Mumbai

sd/-

Date : 27/04/2001

D.S. Ambadkar

8. The original Defendant filed Written Statement on 13/9/2002 and the reliefs claimed in the Suit were opposed. It was contended that the Suit premises were not capable of being ascertained or identified and that the description of the suit premises was vague. It was also submitted that the Suit was barred by law of limitation and that on account of demolition of original building, the provisions of the Bombay Rent Act, 1947 were not applicable. It was contended that the Plaintiff was not the tenant of Defendant at all and a defence about jurisdiction was raised. In paragraph-10 of the Written Statement it was averred thus :

10. With reference to paras 1 and 2 of the plaint, the Defendants state that the claim of the Plaintiff is in respect of one room admeasuring 400 square feet on the rear side sixth floor of the building Gordon House. The said room referred to as the suit premises is not in existence and was demolished. Thus the suit premises as described by any means is not in existence and the suit is thus without foundation or cause and does not survive. The Plaintiff's claim to be the tenant is denied and in any event and alternatively was extinguished/terminated.

9. On these pleadings following issues and additional issues were framed on 1/10/2002 and 14/9/2004 :

Coram: Mr. S.R. Jante,

Judge

01.10.2002

R.A.D. Suit No. 1412 of 1999

ISSUES

1) Does Plaintiff prove that he is tenant of the Defendants in respect of suit premises ?

2) Whether suit premises is correctly described ?

3) Whether suit is barred by the law of Limitation ?

4) Whether this court has jurisdiction to entertain and try this suit ?

5) Is Plaintiff entitled to the relief of declaration as prayed for ?

6) Is he entitled to the relief of possession of the suit premises as prayed for ?

7) What order and decree ?

No more sought.

"Coram: Mr. V.D.Dongare

Judge

14.09.2004

In view of amended pleadings, in my opinion additional issues are required to be framed in this suit. I frame the same as follows :

ADDITIONAL ISSUES

1. Does the Plaintiff prove that the Defendants are liable to put the Plaintiff in possession of the newly constructed premises in lieu of his old tenanted premises ?

2. Whether the Plaintiff is entitled to the decree in terms of prayer a(i) ?

JUDGE

14.9.2004

10. During the course of evidence various documents were produced in the Suit. The Defendant had filed 2 undertakings namely undertaking dated 19/1/1996 submitted to the Executive Engineer of Bombay Repairs and Reconstruction Board (MHADA Unit) and undertaking dated 17/12/1997 submitted to the Municipal Commissioner of the Mumbai Municipal Corporation. Both the documents were produced and proved. The relevant portion of the first undertaking reads thus :

Sub: Proposed repairs to building at 5, Battery Street, known as "Gordon House", "A" Ward.

Ref : Your letter No. E.E./A-Div/131 of 1996 dated 17/1/1996.

Whereas by your letter referred hereinabove, it is requested to give undertaking to you as stated in para number 2 therein.

I, Shri Manu Narang, N.O.C. Holder for the said scheme of repairs etc. do hereby solemnly undertake to accommodate the tenant/s, occupant/s staying in transit camps, if any, in the completed building at the same place and location by allotting equivalent area in their possession prior to repairs.

I also further give solemn undertaking that all the tenants/occupants shall be allotted the equivalent area at the same location occupied by them prior to undertaking the said repairs.

....

The undertaking shall be binding on all my successors, nominees,assignees etc. or whosoever derives title and interest in the above property though on underlie.

Solemnly affirmed at Bombay this 19th day of January, 1996.

sd/-

MANU NARANG

Relevant portion of the Undertaking dated 17/12/1997 reads thus :

The Municipal Commissioner

Municipal Corporation of

Greater Mumbai

Mahapalika Marg,

Mumbai - 400001.

Sub : Repairs to the building at 5, Battery Street, "Gordon House", "A" Ward, Colaba Division.

Ref : EEDPR/4966/A-R-R dated 13/2/1997.

Whereas, the Executive Engineer Building Proposals (City) R.R. Cell, has approved the above proposal, subject to conditions and an undertaking and agreement to re-allotment, demolition and completion of the repairs to the building thereafter is one of the conditions among others. AND WHEREAS all the tenants/ occupants save and except one Shri P.B. Fernandes (former occupant of the collapsed portion) have duly completed the agreements inter alia their consent to demolition by Owners/N.O.C. holder and the latter viz. N.O.C. holder's solemn undertaking to allot them the equivalent area at the same location in the repaired premises, as would be directed by M.B.R. & R. Board, a MHADA unit, AND these agreements have been sent to the E.E.B.P. (City) R.R.

AND WHEREAS, the agreement with the said P.B. Fernandes is availed pending certain formalities. AND, therefore, WHEREAS, with conclusion of finalizing the required formalities e.g. Agreements and undertaking with tenants/occupants holding together area as much as 88% of the total built up area, have been completed to enable the E.E.B.P. (City) R.R. To issue commencement certificate. I, Shri Manu Narang, Owner and N.O.C. holder do hereby solemnly agree to undertake to allot the said Shri P.B. Fernandes, the possession of the equivalent area at the same place and location in the repaired building.

These were the undertakings which were referred in the Order dated 21/9/1999 referred hereinabove.

11. At the time of trial of the Suit, oral evidence was recorded. The Petitioner examined himself in support of his claim by filing Affidavit of Examination-In-Chief. He produced original electricity bill, telephone bill, ration card and rent receipts issued by the earlier landlord Mrs. Soonabai H. Furdoonji, as also the rent receipt issued by the original Defendant Manu Narang in respect of the suit premises and various other documents. The original electricity bill was admitted in evidence and was given Exh. A, original telephone bill was admitted in evidence and was given Exh. B and the original ration card was admitted in evidence and was given Exh. C. The original rent receipts were proved and marked as Exh. D-1 and Exh. D-2. The allotment letter dated 20th November, 1989 was admitted in evidence and marked Exh. E and the correspondence between the Plaintiff and MHADA was admitted and marked as Exh. F1 to F7 and G. The Plaintiff examined Shri. Pramod Karekar, an Architect to prove the list of tenants given by the Defendant to the Plaintiff and said Shri. Karekar and the letter dated 3/5/1999 written by him to the Estate Manager and the sanctioned plan of the new building prepared and signed by him. P.W. 2 Architect stated that the carpet area of the premises occupied by the Plaintiff was 364.36 sq. ft.

12. On behalf of the Defendants, none of the heirs of the original deceased Defendant stepped in the witness box, but one Kantilal Sethia was examined. In the Examination-In-chief he stated that the Plaintiff was occupying a room on the rear side of the 6th floor of Gorden House and the area of the room was 364.36 sq. ft. He further stated that the portion of the building collapsed on 11/5/1985 and that according to him the tenant had told the original landlord Shri Manu Narang that he had no intention to come back and occupy premises in the new building. In the cross-examination the said witness admitted as under:

.. The suit premises were on the sixth floor in the rear side of the suit building. It was admeasuring around 360 to 370 sq. ft. The plaintiff was occupying the suit premises. The suit building was one. I cannot say how many total tenements were in the suit building.... My statement that the tenancy of the plaintiffs came to an end after collapse of the old suit building is based on legal advice.

The defendants have served notice of termination of tenancy to the plaintiff in respect of the suit premises in the old building. Now the new building has been constructed.....

...There is no occupant in the newly constructed suit building except Narang family. I am not personally aware where all the old tenants in the suit building have gone.

13. By Judgment and Order dated 18/10/2006, the learned Judge of the Court of Small Causes dismissed the Suit. Issue No. 1 was answered in the negative and it was held that the Plaintiff has not proved tenancy. Issue No. 2 was answered in the negative by holding that the suit premises is not correctly described. Issue No. 3 was answered in the affirmative by holding that the Suit was barred by limitation. It was however held that the Small Causes Court has jurisdiction to try and entertain the Suit. In so far as the limitation is concerned, it was held that since the Plaintiff has been dishoused on 11/5/1989, the Suit for declaration of tenancy rights and possession filed on 6/9/1999 was barred by limitation under Article 58 of the Schedule to the Limitation Act. It was held that limitation will be only 3 years from the date of being dishoused. On the merits of the controversy, it was held that the Suit premises had collapsed naturally and, hence, tenancy rights of the Petitioner did not survive, by following the observations of the Supreme Court in the case of Vannattankandy Ibrayi v/s. Kunhabdulla Hajee MANU/SC/0816/2000. 2001(1) All M.R. 548 (S.C.) : (2001) 1 SCC 654 Based on these findings the Suit was dismissed.

14. Aggrieved by this Order, the Petitioner filed Appeal No. 214 of 2007 under Section 29 of the Bombay Rent Act, 1947 which was heard by the Division Bench of the Court of Small Causes. The Appellate Court concurred with the Trial Court on all issues. It was held that since no rent was paid by the Plaintiff to the Defendant since 1989 as the premises were not in existence, there was allegedly no privity of contract to allot any portion of building after reconstruction to the Plaintiff. The learned Judges held that the Defendant had proved that the Plaintiff's rights over the suit premises have ceased. On the aspect of limitation, it was held that Article 58 would govern the Suit and since the Suit was filed 10 years after being dishoused, the Suit was barred by limitation.

SUBMISSIONS OF RESPECTIVE ADVOCATES

15. I have extensively heard Smt. Usha Purohit, learned Advocate for Petitioner. She advanced following submissions:

a) She contended that the portion of the building Gorden House in which the Petitioner was staying as a tenant had become dilapidated, as a result of which a notice of vacating premises was issued by Mumbai

b) She criticised the Judgments of the Courts below by contending that once Repair Board steps in under Chapter 8 of MHAD Act, 1976 then the status of the landlord is displaced. She relied upon the provisions of Section 77(6) of the MHAD Act, 1976 as also provisions of Sections 88 and 89 of the said Act.

c) Relying on Section 90(4) of the said Act she submitted that during the period within which the premises are demolished and pending reconstruction the relationship of landlord and tenant does not come to an end, but it is merely suspended temporarily. She submitted that the dispossession really took place when MHADA issued an eviction notice for eviction of the Petitioner from transit accommodation and, hence, the Suit was within limitation.

d) In so far as the description of the suit property is concerned, she submitted that the Suit property was properly described in the plaint and in view of the averments in the Written Statement, there was an admission about the description of the Suit property.

e) In so far as the question of limitation is concerned, she submitted that the Suit was a suit for possession by a tenant based on prior possession and hence, the same was not barred by limitation.

f) She submitted that none of the Respondents had entered witness box and did not offer themselves for cross-examination and, hence, an adverse inference needs to be drawn. It was submitted that only a paid employee of the Respondents had stepped in the witness box who is not even a constituted attorney of the Defendants and had no personal knowledge.

g) In so far as question regarding extinguishment of the tenancy rights is concerned, she submitted that there was no extinguishment of tenancy rights since the building had not collapsed on account of any natural calamity but has collapsed on account of failure of the landlord to carry out proper tenantable repairs. She submitted that the Defendant had made a positive representation to the Court that relationship of landlord and tenant subsisted, which representation was in the nature of the undertaking given to the Court and that now Defendant cannot be allowed to turn back and dispute the relationship of landlord and tenant.

h) She relied upon the provisions of Section 108 and 111 of the Transfer of Property Act, 1882 and contended that there was neither any surrender of tenancy nor any decree passed by the Court of competent jurisdiction. She submitted that the relationship of landlord and tenant subsisted and hence Trial Court ought to have passed decree for directing that the Petitioner should be put back in possession of equivalent premises equal in area to the tenanted premises.

i) She relied upon the following Judgments :

Ramkishore Pandit v/s. Vijayabahadursingh Jagtapsingh MANU/MH/0017/1964 1963 LXV BLR 712 and submitted that the Small Causes Court had exclusive jurisdiction to deal with the Suit. Importers & Manufactures Ltd. v/s. Pheroze Framroze Taraporewala & ors. MANU/SC/0071/1952 : AIR 1953 SC 73 was relied upon to contend that the Small Causes Court had exclusive jurisdiction to try and entertain all the disputes between landlord and tenant. The Division Bench Judgment in the case of S.M. Deshmukh v/s. Ganesh Krishnaji Khare 1973 LXXVI BLR 405 was relied upon to contend that the Court had ample power under Section 151 to direct restoration of possession. Judgment of the Supreme Court in Janaki Vashdeo Bhojwani & anr. V/s. Indusind Bank Ltd. and Ors. MANU/SC/1030/2004 : 2005(1) Mh. L.J. 1170 was relied upon in support of her submission that an adverse inference should be drawn against the Defendants. Judgment of the learned Single Judge (Sujata Manohar, J as she then was) was relied upon to show that it was one of the duties of the Repairs Board to undertake the repairs of the dilapidated buildings. She relied on the Judgment of the Supreme Court in T. Lakshmipathi and others v/s. P. Nithyananda Reddy and others MANU/SC/0263/2003 : 2003 (3) Scale 523 and submitted that since tenancy was in respect of premises on the 6th floor of the building, tenancy cannot be determined by mere collapsing or demolition of the building. She submitted that other Judgment of the Supreme Court in Vannattankandy Ibrayi (supra) had no application to the facts of the case since in that case entire demised premises had been extinguished on account of natural calamity.

j) She ultimately submitted that considering the fact that the entire building was available with the Respondents, by allowing the Revision Application, the Respondents shall be directed to induct the Petitioner as a tenant in one tenement having equal area as the tenement earlier occupied by the Petitioner or, in the alternative, the Court should award appropriate monetary compensation as damages to the Petitioner.

16. On the other hand, Mr. P.S. Dani, learned Advocate for Respondents advanced following submissions :

(a) He submitted that collapse of the building was not on account of any act of the landlord. He relied upon the findings recorded by the Trial Court in paragraph-25, as also the findings recorded by the Appellate Court in paragraph-18 and contended that the said findings of fact clearly show that the premises had collapsed naturally. He submitted that since the Bombay Rent Act, 1947 is applicable, provisions of Transfer of Property Act, 1882 do not apply. He relied upon the Judgment of the Supreme Court in Vannattankandi Ibrayi(supra) and submitted that if collapse of the building is on any ground other than neglect of the landlord, state Rent Act does not confer any right on the tenant.

(b) Mr. Dani sought to distinguish the Judgment of T. Lakshmipathi & others (supra) by contending that this Judgment is only about theory of merger and not a precedent about the extinction or otherwise of the tenancy rights. He has taken me through paragraphs 19 and 21 of the said Judgment and contended that the said Judgment did not consider the earlier Judgment of the Supreme Court in Vannattankandy Ibrayi (supra). He submitted that the word "premises" is defined under Section of the Bombay Rent Act, 1947 and land and buildings are different concepts under the said definition. He submitted that only land can also be premises and building can also be premises under the said definition and hence, the Judgment of the Supreme Court in T. Lakshmipathi & ors(supra) will not be applicable. He submitted that there is absolutely no pleadings in the plaint that the tenant has a right in the land. He submitted that without such pleadings, plea of the tenant of having rights in the land cannot be considered.

(c) He submitted that the Judgment of the Supreme Court in Vannattankandy Ibrayi (supra) is the Judgment which has to be applied to the facts of this case. He relied upon the Judgment of the learned Single Judge (N.A. Britto, J) in Shivram Ladu Nitardekar v/s. Alex Fernandes & ors. 2006(1) B.C.R. 846 He also relied upon another Judgment of learned Single Judge (A.M. Khanwilkar, J) in the case of Sidharam Ganpati Mulage v/s. Bashir Elahibaksh Tamboli MANU/MH/0327/2009 : 2009(5) Bom. C. R. 410. He relied upon the observations in paragraph-11 of the Judgment of the Shivram Nitardekar (supra). He submitted that the Plaintiff was never in possession of the land. He submitted that two learned Single Judges namely, N.A. Britto, J and A.M. Khanwilkar, J had followed the Judgment in Vannattankandy Ibrayi (supra).

(d) Mr. Dani submitted that there is no contradiction or difference between the 2 judgments of the Supreme Court in Vannattankandy Ibrayi(supra) and T. Lakshmipathi & ors.(supra). Relying upon the paragraphs 19 and 23 of the Judgment of the T. Lakshmipathi & ors. (supra) it was contended that there is no inconsistency in the two judgments since the second judgment does not deal with the State Rent Act. He submitted that since the State Rent Act namely, Bombay Rent Act, 1947 defines the word "premises" in Section 5(8), the case is covered by the Judgment of Sidharam Ganpati Mulage(supra), particularly when there is no finding that the landlord is responsible for demolition. He submitted that the Petitioner is not without the remedy and though suit as filed under the Bombay Rent Act, 1947 was not maintainable, the Plaintiff has remedy elsewhere and not before the Rent Court.

(e) In so far as the provisions of MHAD Act, 1976 are concerned, Mr. Dani submitted that the Writ Petition No. 2202 of 2003 was filed against MHADA and the landlord. Allegations were made about change of plan and a prayer for mandamus was sought against MHADA which prayer was rejected.

(f) In so far as description of the property is concerned, Mr. Dani submitted that the property was not properly described.

(g) In so far as the issue of limitation is concerned, Mr. Dani submitted that the Suit had to be filed within 3 years and Article 58 of the Schedule to the Limitation Act, 1963 will apply. According to Mr. Dani Article 64 of the Schedule will not apply because the word "title" used in Article 64 is not used in the context of "ownership". He submitted that even otherwise Article 64 does not apply since, unless declaration was prayed for, final relief claimed by the Plaintiff cannot be granted. He submitted that for Article 64 to apply there has to be a declaration to the relief which was sought and the relief of possession under Article 64 cannot be prayed for without seeking a declaration under Article 58.

(h) In so far as the undertakings given to MHADA and MCGM, Mr. Dani submitted that these undertakings were not duly proved and exhibited. He submitted that no undertaking was given to the Court and the Order dated 21/9/1999 does not indicate any undertaking given to the Court. He submitted that the first part of the said order is completely contrary to the law. He submitted that the Suit based on undertaking given to the MHADA or MCGM will not lie in the Small Causes Court. He therefore submitted that since 2 Courts have concurrently recorded findings of facts and law and since there is no error of jurisdiction, the High Court should not exercise its jurisdiction under Section 115 of the Code.

17. In rejoinder Smt. Purohit, Advocate for the Petitioner advanced following submissions :

a) She submitted that the Judgment of the learned Single Judge (A.M. Khanwilkar, J) in the case of Sidharam Mulage (supra) was not applicable since in that case entire premises was burnt down and the premises were not in existence. She submitted that in the present case only a part of the building had collapsed and the remaining building was demolished by Landlord. She submitted that the tenancy rights of the Petitioner were specifically preserved and acknowledged by the statement made before the Small Causes Court.

b) In so far as the Judgment of the learned Single Judge (A.M. Khanwilkar, J) is concerned, she invited my attention to the observations in paragraph-8 of the Judgment of the learned Single Judge (A.M. Khanwilkar, J) and submitted that the said observations were clearly contrary to the provisions of law and the Supreme Court Judgment in T. Lakshmipathi (supra).

c) She also invited my attention to the various admissions given by the witness of the Defendants in the cross-examination. On the issue of limitation she submitted that knowledge has to be attributed and unless and until it is shown that the Petitioner is having knowledge from a particular day, period of 3 years will not begin to run even if Article 58 is held to be applicable. She pointed out that P.W. 2 Karekar as Architect of the landlord had duly proved the letters given to MCGM and MHADA. She submitted that since tenancy has not extinguished, this Court should set aside the Judgment of the two Courts below and allow the C.R.A.

CONSIDERATION OF SUBMISSIONS

18. I have carefully considered the rival submissions of the respective Advocates. In my opinion, following issues arise in this Revision.

(i) Whether the Suit was barred by limitation and which Article of the Limitation Act would govern the Suit ?

(ii) Whether the Suit premises had been properly described ?

(iii) Whether the tenancy rights of the Petitioner can be held to have exstinguished on account of partial collapse of part of the building in which the Petitioner was occupying part of the 6th floor as a tenant ?

In my opinion, answer to these 3 questions will alone lead to a proper determination of the controversy involved in this C.R.A.

19. In so far as the question of limitation is concerned, in my opinion, the Trial Court and the Appellate Court have clearly overlooked the real substance of the reliefs claimed in the Suit. By amending plaint in the Suit, prayer (a-1) was added which I have quoted hereinabove. That was the main prayer in the Suit. In my opinion, even with prayer clause (a) which was a prayer for declaration, prayer (b) which was a prayer for possession was clearly governed by Article 64 of the Schedule to the Indian Limitation Act, 1963. Prayer (a) was really in the nature of surplusage. Even if it is assumed that it was necessary to seek declaration, still the Suit was not barred by limitation. It is an admitted position that the relationship between the Petitioner tenant and Respondent landlord was governed by the provisions of Bombay Rent Act, 1947. Once such relationship was governed by the Bombay Rent Act, 1947 there can only be two modes of exstinguishment of tenancy rights. The first is by an express surrender of tenancy by a tenant which is not the case in hand. The second mode of extinguishment of tenancy is by a decree of competent Court. In V. Dhanpal Chettiar v/s. Yesodai Ammal MANU/SC/0505/1979 : 1979 (4) SCC 214 : AIR 1979 SC 1745, the Constitution Bench of the Supreme Court has clearly held that in respect of the premises governed by the Bombay Rent Act, 1947, the tenancy does not get terminated even by issuance of a notice of termination of tenancy and can come to an end only by a decree of a competent Court. This legal position is well established. Therefore even in respect of relief of declaration the time will begin to run only from express denial of tenancy rights of the Plaintiff by the Defendant. In the present case, in fact, even after filing of the Suit, the Defendant did not deny the tenancy rights of the Plaintiff as is evident from the order dated 21/9/1999 passed in the present Suit which is quoted hereinabove. In view of this, it was not open for the Defendant to contend that the Suit was barred by limitation. I have therefore no hesitation to hold that the findings on the question of limitation as recorded by the Trial Court and the Appellate Court are perverse and the same are liable to be quashed and set aside and are accordingly quashed and set aside.

20. In so far as second question regarding description of the suit property is concerned, in my opinion, the Trial Court and the Appellate Court have clearly committed an error apparent on the face of record. The suit premises had been properly described in the plaint. Even in the oral evidence, from the admissions of the witnesses of the Defendants, it is clear that the Defendants were fully aware as to what is the suit premises. Dimensions of the suit premises have been duly proved by the P.W. 2 who was the Architect engaged by the Defendant at the relevant time. Thus, there was more than sufficient identity of the suit premises. The intention of giving description of immovable property is to ensure that the parties exactly know the case pleaded by the adversary. That intention has been sufficiently fulfilled by the description given in the plaint and the evidence which was placed on record. Hence, even the findings on the question of description of the property as recorded by the Trial Court and the Appellate Court is perverse and the same deserves to be set aside and is accordingly quashed and set aside.

21. This takes me to the third and most crucial aspect of the controversy as to whether the tenancy rights of the Petitioner got exstinguished on account of the fact that a part of the building in which the Plaintiff was residing as a tenant has collapsed. For properly answering this vexed issue it would be necessary to very carefully read the two Judgments of the Supreme Court in T. Lakshmipathi (supra) and Vannattankandy Ibrayi (supra). It will also be necessary to deal with the 2 Judgments of the learned Single Judges of this Court in Sidharam Mulage (supra) and Shivram Nitardekar(supra).

22. At the outset, it is necessary to note that the Judgment in Vannattankandy Ibrayi (supra) is earlier in point of time and both the Judgments are by the bench of same strength, namely, 2 Judges of the Supreme Court. It is also necessary to note that the earlier Judgment overrules the Judgment of this Court in Hind Rubber Industries (P) Ltd. v/s. Tayebhai Mohammedbhai Bagasarwalla MANU/MH/0066/1996 : AIR 1996 Bom. 389 : 1996 (4) Bom. C.R. 414 whereas the later Judgment in T. Lakshmipati (supra) specifically approves the Judgment of this Court in Hind Rubbers Industries (P) Ltd. (supra). Thus there is an apparent conflict in the aforesaid 2 Judgments of the Supreme Court and it is not possible to ignore such a conflict of opinion. It is necessary to bear in mind that the first Judgment in the case of Vannattankandy Ibrayi (supra) is clearly distinguishable on the fact of that case. In the said case, it was undisputed that the tenanted shop was completely destroyed due to a natural calamity i.e. by fire and it was not pulled down by the landlord. This is clear from observations in paragraph 3 of the Judgment. It is also undisputed that the tenant in that case had made construction of new shop without obtaining any consent of the landlord. In our case, the partial collapse of the part of the building in which the Petitioner was staying as a tenant is not on account of any natural calamity whatsoever. In fact under the State Rent Act, it is statutory obligation of the landlord to carry out tenantable repairs. On account of lack of tenantable repairs as also on account of the fact that the building was quite old, a part of the building had collapsed. It is not the case of even the Respondent landlord that entire building had been razed to ground on account of any natural calamity. In fact the building was demolished after obtaining a development permission/commencement certificate from the local authority namely MCGM by submitting plans for construction by demolition of the old building and constructing a new building in its place. Thus, the case in hand is neither a case of complete demolition/destruction of the building nor is it a case of destruction by natural calamity. Merely because part of the 6th floor of the building in which the premises occupied by the Petitioner tenant were located as collapsed, that situation cannot be equated with the complete collapse of the entire building. It is pertinent to note that the Hon'ble Supreme Court in Vannattankandy Ibrayi (supra) was considering the situation of complete collapse and of a total destruction of the demised premises, which is not the case in hand. The observations of the Supreme Court will have to be understood in that context. In the case of Vannattankandy Ibrayi(supra) the Supreme Court observed thus in paragraphs 13 to 15 and 20.

13. The aforesaid decisions show that where the tenancy is exclusively for premises and not for land and on the destruction of the subject matter the tenancy stands extinguished. However, the Bombay High Court in Hind Rubber Industries Pvt. Ltd. vs. Tayebhai Mohammedbhai Bagasarwalla (MANU/MH/0066/1996 : AIR 1996 Bom 389) and a Division Bench of Kerala High Court in V.Kalpakam Amma vs. Muthurama Iyer Muthurkrishna Iyer (MANU/KE/0021/1995 : AIR 1995 Ker 99) have taken a contrary view of the matter.

14. Learned counsel appearing for the appellant pressed into service the aforesaid two decisions, one in Hind Rubber Industries Pvt Ltd. (supra) and second in V. Kalpakam Amma (supra) and contended that on the destruction of the building the tenancy right of the tenant is not extinguished. It is also stated that a special leave petition filed against the decision in Hind Rubber Industries Pvt. Ltd. (supra) was dismissed by this Court and, therefore, the said decision has seal of approval by this Court. In the case of Hind Rubber Industries Pvt. Ltd. (supra) the plaintiff was the owner of the building. The said building was let out to the defendant and the building so let out caught fire and the building occupied by the defendant was gutted and destroyed. The plaintiff brought a suit in the City Civil Court, Bombay for mandatory injunction restraining the defendant from carrying out any work or construction on the disputed land or enter upon the said laid. The defendant raised an objection that the suit filed by the plaintiff in City Civil Court was not maintainable. A preliminary issue was struck as to whether the Court had jurisdiction to entertain the suit. The trial Court held that it had jurisdiction to entertain and try the suit. On a Civil Revision petition filed by the defendant, the Bombay High Court held that since on the destruction of the property the tenancy is not extinguished and relationship of landlord and tenant continued to exist, therefore the City Civil Court had no jurisdiction to entertain and try the suit. While holding so the High Court relied upon Section 108(B) (e) of the Act which runs as under:

108(B)(e) If by fire, tempest or flood, or violence of any army or of a mob, or other irresistible force, any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void;

Provided that, if the injury be occasioned by the wrongful act or default of the lessee, he shall not be entitled to avail himself of the benefit of this provision;

The aforesaid Section provides that in case of destruction of the property by fire, tempest or flood, or violence of any army lease may be rendered void at the option of the lessee provided that such injury to the leased property has not been occasioned by the wrongful act or default of the lessee. According to the High Court the rights of the tenant in leased property subsisted even if the leased premises has been destroyed by fire, unless the tenant exercises his option that the tenancy is rendered void. The question therefore arises whether on destruction of tenanted shop governed by the State Rent Act, the tenant can assert his possession on the vacant land on the footing that the tenancy continued to exist under Section 108(B)(e) of the Act. In other words whether in the aforesaid situation the provisions of Section 108 (B) (e) has any application.

15. In V. Kalapakam Ammas case (supra) the Kerala High Court held that where a premises governed by the State Rent Act is destroyed by fire the tenancy does not continue to exist under Section 108 (B) (e) since the said Section has no application to such a situation. However, the High Court held that the tenants tenancy continued to exist under the State Rent Act by virtue of the definition of the building in the Act.

20. From the aforesaid decisions there is no doubt that if a building is governed by the State Rent Act the tenant cannot claim benefit of the provisions of Sections 106, 108 and 114 of the Act. Let us test the arguments of learned counsel for the appellant that on the destruction of the shop the tenant can resist his dispossession on the strength of Section 108(B)(e). In this case what was let out to the tenant was a shop for occupation to carry on business. On the destruction of the shop the tenant has ceased to occupy the shop and he was no longer carrying on business therein. A perusal of Section 108(B)(e) shows that where a premises has fallen down under the circumstances mentioned therein the destruction of the shop itself does not amount to determination of tenancy under section 111 of the Act. In other words there is no automatic determination of tenancy and it continues to exist. If the tenancy continues, the tenant can only squat on the vacant land but cannot use the shop for carrying on business as it is destroyed and further he cannot construct any shop on the vacant land. Under such circumstances it is tenant who is to suffer as he is unable to enjoy the fruits of the tenancy but he is saddled with the liability to pay monthly rent to the landlord. It is for such a situation the tenant has been given an option under Section 108(B)(e) of the Transfer of Property Act to render the lease of the premises as void and avoid the liability to pay monthly rent to the landlord. Section 108(B)(e) cannot be interpreted to mean that the tenant is entitled to squat on the open land in hope that in future if any shop is constructed on the site where the old shop existed he would have right to occupy the newly constructed premises on the strength of original contract of tenancy. The lease of a shop is transfer of the property for its enjoyment. On destruction of the shop the tenancy cannot be said to be continuing since the tenancy of a shop presupposes a property in existence and there cannot be subsisting tenancy where the property is not in existence. Thus when the tenanted shop has been completely destroyed, the tenancy right stands extinguished as the demise must have a subject matter and if the same is no longer in existence, there is an end of the tenancy and therefore, Section 108(B)(e) of the Act has no application in case of premises governed by the State Rent Act when it is completely destroyed by natural calamities.

These observations of the Supreme Court will have to be considered as observations in the facts of that case namely, on a complete destruction of the demised premises.

23. On the other hand the Judgment of the Supreme Court in T. Lakshmipathi (supra) is more aptly applicable to the point involved in this Suit. In that case, it was noticed in paragraph-9 that the tenanted premises had been demolished and new premises had been reconstructed in place of the old one. The facts of the case in hand are identical. In that context what is observed by the Supreme Court in paragraph-18 to 23 needs to be reproduced & noticed:

18. It was submitted by the learned senior counsel for the appellants that assuming if the tenancy has not determined by merger still what was held by the respondents No.2 and 3 on tenancy was 'building' or super structure only and not the land beneath. Admittedly, the building has been demolished. As tenancy premises have ceased to exist, the tenancy has come to an end in view of the very subject matter of tenancy having ceased to exist. Assuming also that the act of the appellants is wrongful still the remedy of the respondent No.1 who is only a co-owner in the property would be to sue for partition and seek recovery of damages; a suit based on landlord-tenant relationship and seeking recovery of possession is misconceived and must fail, submitted the learned senior counsel Shri P.P. Rao.

19. The tenancy cannot be said to have been determined by attracting applicability of the doctrine of frustration consequent upon demolishing of the tenancy premises. Doctrine of frustration belongs to the realm of Law of Contracts; it does not apply to a transaction where not only a privity of contract but a privity of estate has also been created inasmuch as lease is the transfer of an interest in immovable property within the meaning of Section 5 of the Transfer of Property Act (wherein the phrase 'the transfer of property' has been defined), read with Section 105, which defines a lease of immovable property as a transfer of a right to enjoy such property. (See observations of this Court in this regard in Raja Dhruv Dev Chand Vs. Raja Harmohinder Singh & Anr., MANU/SC/0179/1968 : 1968 (3) SCR 339). It is neither the case of the appellants nor of the respondents No.2 and 3 that the subject matter of lease was the building and the building alone, excluding land whereon the building forming subject matter of tenancy stood at the time of creation of lease.

20. In Woodfall's Laws of Landlord and Tenant (28th Edition, Vol.1) the relevant law is so stated:

23. We are, therefore, of the opinion that in the event of the tenancy having been created in respect of a building standing on the land, it is the building and the land which are both components of subject matter of demise and the destruction of the building alone does not determine the tenancy when the land which was site of the building continues to exist; more so when the building has been destroyed or demolished neither by the landlord nor by an act of nature but solely by the act of the tenant or the person claiming under him. Ample judicial authority is available in support of this proposition and illustratively we refer to George J. Ovungal Vs. Peter, MANU/KE/0012/1991 : AIR 1991 Ker 55, Rahim Bux & Ors. Vs. Mohammad Shafi, MANU/UP/0003/1971 : AIR 1971 All 16, Hind Rubber Industries Pvt. Ltd. Vs. Tayebhai Mohammedbhai Bagasarwalla & Ors., MANU/MH/0066/1996 : AIR 1996 Bom 389 and Jiwanlal & Co. & Ors. Vs. Manot & Co., Ltd., MANU/WB/0450/1960 : 64 CWN 932. The Division Bench decision of Kerala High Court in Dr. V. Sidharthan Vs. Pattiori Ramadasan, MANU/KE/0039/1984 : AIR 1984 Ker 181, appears to take a view to the contrary. But that was a case where the building was totally destroyed by fire by negligence of the tenant. It is a case which proceeds on very peculiar facts of its own and was rightly dissented from by Bombay High Court in Hind Rubber Industries Pvt. Ltd. Vs. Tayebhai Mohammedbhai Bagasarwalla & Ors., (supra).

24. For the same reasons, Judgment of the learned Single Judge (A.M.Khanwilkar, J) Sidharam Mulage(supra) is clearly distinguishable. Even in that case, the entire tenanted premises had been destroyed by a natural calamity namely fire and in that context, the learned Single Judge followed the ratio in Vannattankandy Ibrayi(supra). In so far as the Judgment of the learned Single Judge (N.A. Britto, J) in Shivram Nitardekar(supra) is concerned, that was a case where the Court was considering a factual situation where the demolition of the building was by act of tenant. In the facts of that case, the tenancy was in respect of hut/structure which was abandoned by the Plaintiff and thereafter it collapsed on account of natural causes. In the present case, entire building in which the suit premises were situated had admittedly not collapsed and 37 cra115.10 only part of the building is collapsed. The land beneath the building had never been brought in the state of open land by any involuntary act of parties but the building was demolished by the defendant by giving express assurance to the Bombay Repairs and Reconstructions Board, as also to the Planning Authority namely, MCGM that the Defendant will rehabilitate the Plaintiff tenant. The letters written by the Architect of Defendant Landlord to the aforesaid 2 statutory authorities have been duly proved in the evidence of the Architect of the Defendant and the contents of these letters clearly show that the Defendant had made a positive representation to the said authorities that the Plaintiff will be provided accommodation as a tenant in an equivalent area in the newly constructed building. Acting on these assurances and undertakings of the Defendant the Statutory Authorities sanctioned the development plans/construction plans of the Defendant and only after sanction of such plans the Defendant demolished the building. Even after filing of the Suit the Defendant acknowledged the fact that the tenancy of the Plaintiff is subsisting which is very clear from the order dated 21/9/1999 quoted hereinabove. Even the learned Judge of the Court of Small Causes was given an assurance that the Plaintiff is the tenant of the Defendant and that the Defendant will abide by his undertakings given to the BMC(MCGM) which is the local authority and planning authority under the provisions of MR & TP Act, 1966.

25. In my opinion, the Judgment of Vannattankandy Ibrayi(supra) is even otherwise distinguishable on facts in as much as in the present case, by the conduct of the parties it can be easily held that both the parties by their conduct conceded and agreed that the tenancy of the Petitioner Plaintiff subsists and even the Trial Court, at the hearing of the interlocutory application, was given the same impression. Only after the Defendant could avoid interim order by giving such impression and assurance to the Court, and only after the Defendant demolished the entire old building, there was a sudden change in the stand and the Defendant started contending that the tenancy had extinguished. In my opinion even on account of conduct of Defendant Landlord, he was clearly estopped from claiming that the tenancy in question has extinguished.

26. For all these reasons I have no hesitation to hold that tenancy rights of the Petitioner Plaintiff/tenant had not extinguished and the tenancy rights subsisted.

27. Logical consequence of this discussion is that the Plaintiff is entitled to a decree for possession. However, the original premises and the original building are no longer in existence and completely new building has been constructed by the Respondents. The Respondents cannot however, escape from the liability of providing equivalent area to the Petitioner/tenant. The relationship between the Petitioner and Respondents will be now governed by the Maharashtra Rent Control Act, 1999 which repealed the Bombay Rent Act, 1947 with effect from 31/3/2000. After having held that the tenancy right subsists, it is not possible to deny relief to the Petitioner who has been waiting for justice for last several years and has been denied justice. The action of the Defendants by declining to allot the premises in a new building equivalent to the area of the tenanted premises is clearly illegal, and, that illegality has to be cured. The Revision Application therefore deserves to succeed and is accordingly allowed.

28. The impugned Judgment and Order dated 18/10/2006 passed by the learned Judge of the Court of Small Causes presiding in C.R. No. 16 in R.A.D. Suit No. 1412 of 1999 as also the impugned Judgment and Order 40 cra115.10 dated 30/9/2009 passed by the Appellate Bench of the Court of Small Causes at Mumbai in Appeal No. 214 of 2007 are quashed and set aside. It is declared that the Petitioner is lawful tenant of the Respondents and continues to be such a tenant. R.A.D. Suit No. 1412/1999 will stand decreed. From the evidence on record it is clear that the Petitioner was a tenant in respect of the premises admeasuring 364.36 sq.ft. in the old building and hence he shall be allotted premises of equivalent area in the new building which was constructed by demolition of the old building "Gorden House" as a tenant. The Standard Rent of the new premises shall be determined by the competent Rent Court viz. Court of Small Causes if the parties do not reach an agreement about the quantum of rent of the new premises. The rent will be payable from the date on which the Petitioner Tenant is given actual possession of the new premises. The Respondents shall pay costs of the Suit and Appeal, as also this Revision Application quantified at Rs. 25,000/- to the Petitioner.

29. Rule is made absolute in the aforesaid terms.

Pages

Sunday, 4 March 2018

Whether tenancy rights will be extinguished if tenanted building is destroyed?

No comments:

Post a Comment