Maragani Ramalingam v. Kondapalli Gurumurthi Reddi
1954-05-06
CHANDRA REDDI, GOVINDA MENON
body1954
DigiLaw.ai
Chandra Reddy, J.- Both the appeals relate to the same subject-matter and raise the question whether the 1st respondent in C.M.A. No.87 of 1953 (4th respondent in C.M.A. No.88 of 1953) can invoke the provisions of the Madras Buildings (Lease and Rent Control) Act XV of 1946 (hereinafter referred to as the Act). The background of this litigation is this: The property involved in these appeals, a cinemahall originally belonged to a family which consisted of Anjayya and his three sons. Anjayya was adjudged an insolvent in I.P. No.36 of 1930 and the insolvent’s estate was vested in the Official Receiver on 4th January, 1932. In the course of the administration of the estate, the Official Receiver sold the property involved in "these appeals along with some other items and it was purchased by the father of the 1st appellant in C.M.A. No.87 of 1953 (and the appellant in C.M.A. No.88 of 1953). Subsequently one of the sons of the insolvent filed a suit O.S. No.35 of 1940 on the file of the Subordinate Judge’s Court, Masulipatam, for partition and separate possession of his one-fourth share on the ground that the Official Receiver’s sale did not bind his share. This suit was dismissed by the trial Court but was decreed on appeal by this Court. Pending the passing of the final decree, the plaintiff in the suit applied to the Court in I.A. No.1217 of 1948 for the appointment of a Receiver to take possession of the cinema-hall and lease it out for a period of one year and to deposit the amount in Court. The following order was passed on that application: "Both sides are willing to have an auction of the cinema-hall (excluding articles claimed in O.S. No.70 of 1947) to the highest bidder. Advertise in Krishna Patrika that auction will be held on 7th October, 1948, before the Principal Subordinate Judge. Petitioner may make the aforesaid advertisement. Hearing adjourned to 7th October, 1948". On the adjourned date bids for the lease-hold interest for one year from 1st November, 1948, were taken before the Court and it was knocked down in favour of the 1st respondent who happened to be the highest bidder for Rs.8,100 and the interlocutory application was allowed. On 26th October, 1948, a further order was passed.
On the adjourned date bids for the lease-hold interest for one year from 1st November, 1948, were taken before the Court and it was knocked down in favour of the 1st respondent who happened to be the highest bidder for Rs.8,100 and the interlocutory application was allowed. On 26th October, 1948, a further order was passed. "As it is now represented that further directions are necessary, the following is issued: The purchaser of lease-hold interest may take possession of the hall from 1st November, 1948. and may run the cinema subject to rules ". It now appears that the lessee could get possession of the property only a few months later as it was in a state of dis-repair and that he had to spend some money to effect the necessary repairs. When the lease was about to expire, the appellants moved the Subordinate Judge of Masulipatam by I.A. No.1278 of 1949 to appoint a Receiver to auction the lease-hold rights of the property involved in these appeals for the year 1949-50. This was opposed by the 1st respondent, inter alia, on the ground that he was entitled to the benefits of the Madras Buildings (Lease and Rent Control) Act. Overruling these objections of the 1st respondent, a Receiver was appointed. This order was set aside on appeal by this Court and the petition was remanded for fresh disposal. One of the questions which the trial Court was directed to decide was whether the Rent Control Act applied or not. Subsequently I.A. No.732 of 1951 was filed for a relief similar to the one in I.A. No.1278 of 1949 for the succeeding year namely from 1st November, 1950, to 1st November, 1951. The opposition to this was based on the same grounds as in the earlier application. The learned Subordinate Judge agreed with applicability of the Madras Buildings (Lease and. Rent Control) Act and dismissed the applications. It is these orders that are now Under appeal. The view of the learned Subordinate Judge is canvassed by the appellants.
The opposition to this was based on the same grounds as in the earlier application. The learned Subordinate Judge agreed with applicability of the Madras Buildings (Lease and. Rent Control) Act and dismissed the applications. It is these orders that are now Under appeal. The view of the learned Subordinate Judge is canvassed by the appellants. In support of these appeals, it was first urged that the provisions of the Act do not apply to this case as the respondent had taken the property on lease only for one year after the Act had come into operation and had agreed to deliver possession of the same at the expiry of the period, the effect of which was to contract himself out of the benefits of the Act. In support of this contention reliance was placed on Raja Chetty v. Jagannathadas Govindas 1 . There a lease of cinema-theatre with furniture, fittings, talkie-equipment, machinery, etc., was given by a registered agreement after the commencement of Madras Act XV of 1946. The lease, inter alia, provided that if the rent remained unpaid for two tenancy months after the same became payable, the landlord was entitled to re-enter upon the demised premises. In an application for eviction under section 7(2)(i) of the Act default in payment of a month’s rent on the due date, two questions arose for consideration whether the Act was applicable as the lease was not of a mere building and furniture only but of fittings talkie-equipment, machinery, etc., and secondly whether the default in payment of one month’s rent entitled the. landlord to ask for ejectment in spite of the provisions in the lease that the landlord could re-enter upon the premises demised when there was default in payment of two months’ rent. Both the questions were answered against the landlord. Dealing with the second question, the learned Chief Justice remarked that since section 7(2)(i) was enacted for the benefit of the landlord and there was no express prohibition against contracting out of it, it was open to a landlord to enter into a contract with the tenant giving the latter larger rights and greater privileges than those conferred on him by the Act.
It was held that the landlord could not apply for eviction for default in payment of one month’s rent as contemplated under section 7(2) as it was expressly provided that it was only if the rent remained unpaid for two tenancy months after the same became repayable that he could re-enter upon the premises. It looks to us that this decision does not govern the case on hand. That the learned Judges did not intend to lay down a broad proposition that it was up to the tenant also to contract himself out of the benefits of the Act appears from the observations of Rajamannar, C.J., who was a party to Raja Chetty’s case1 in George Oakes, Ltd. v. Chief Judge, Small Cause Court, Madras2. “I would like to say something about the doubt expressed by my learned brother whether the decision in Raja Chetty’s case,1 would impliedly lead to the conclusion that the tenant can also contract himself out of the benefits conferred on him by the Act by taking a lease after the Act containing terms and conditions which operate to curtail the rights and privileges conferred upon him by the Act. There was no doubt in our mind that he could not. I would be prepared to go to the length of holding that it would be against public policy and the spirit of the Act. The provisions of section 6 embody the principle that the tenant can be saved from the terms of an express agreement when such terms are to his detriment”. Although these observations are obiter, they have a direct bearing on the present enquiry. It is clear from this passage that the tenant can invoke the provisions of section 7 despite the fact that the lease was taken for a fixed period after the coming into force of the Act. As pointed out by the learned Chief Justice section 6 of the Act was enacted to save the tenant from the terms of an express agreement when the terms are to his detriment and it applied not only to leases created prior to the Act but even to those coming into existence after the Act.
As pointed out by the learned Chief Justice section 6 of the Act was enacted to save the tenant from the terms of an express agreement when the terms are to his detriment and it applied not only to leases created prior to the Act but even to those coming into existence after the Act. Referring to Raja Chetty’s case1, Viswanatha Sastri, J., another member of the Bench, said: “I therefore doubt whether the learned Judges who decided Raja Chetty v. Jagannathadas Govindas1, would have held in such circumstances that the tenant had validly contracted himself out of the right to a fair rent and immunity from eviction, conferred on him by the Act”. On a reading of the provisions of sections 6 and 7 of the Act and from the pronouncement in George Oakes, Ltd. v. Chief Judge, Small Cause Court, Madras2, the conclusion we have reached is that a tenant cannot contract himself out of the rights conferred on him by the Act and that he could take advantage of the provisions of the Act notwithstanding that the please was for a specified period. It follows that the 1st respondent could not be evicted although what was auctioned was only the lease-hold right for one year if he is a tenant within the meaning of the Act. This leads us to the next contention put forward on behalf of the appellants that the 1st respondent could not claim the advantage of the relevant provisions of the Act as there was no lease to attract the applicability of the Act. The position is put thus by the learned Government Pleader for the appellants. The bids were called for in this case by the Court. A Court cannot transfer an interest in immovable property and hence the transaction cannot amount to a lease but should be regarded as a licence for occupying the cinema-hall for a fixed period on payment of a premium. The answer to this is furnished by the order of the Subordinate Judge, dated 7th October, 1948, and the memorandum of grounds of appeal. In the face of these documents, it is futile to contend it is not a lease but a licence. For one thing it is uncontrovertible that bids were called for only for lease-hold interest in the cinema-hall fora period of one year. This is made absolutely clear in the order itself.
In the face of these documents, it is futile to contend it is not a lease but a licence. For one thing it is uncontrovertible that bids were called for only for lease-hold interest in the cinema-hall fora period of one year. This is made absolutely clear in the order itself. Even in the memorandum of grounds of appeal the counsel for the appellants proceeded only on the footing that it was a lease of the premises for a period of one year. There is therefore no substance in the contention that the transaction amounted only to a licence and not a lease. On the question whether a lessor was the Court or the Receiver, there can be little doubt that the lease was by the Receiver. The prayer in the affidavit in support of the petition for leasing out the property was that “it was just and convenient that the Receiver already appointed by the Court should be directed to lease out item 7 of the suit property namely cinema-hall for a period of one year, etc.” The final order thereon was “I.A. allowed”. In this situation there is very little force in the argument that the lease was not by the Receiver merely because bids were taken before Court. On the materials on record the only conclusion that could be reached is what was auctioned was the lease-hold interest in the cinema-hall and the lease was by the Receiver. It is therefore unnecessary for us to consider whether a Court acting on behalf of parties could be a landlord within the meaning of the Act. For these reasons we must hold that the 1st respondent in C.M.A.No.87 of 1953 (4th respondent in C.M.A. No.88 of 1953) cannot be evicted and the judgment of the lower Court should be affirmed though for different reasons on the second point. In the result the appeals are dismissed but we make no order as to costs. R.M. ------- Appeals dismissed.