JUDGMENT : This is a second appeal filed by the original defendant-tenant, under Section 28 of the Saurashtra Rent Control Act, 1951 (which will be hereinafter referred to as 'the Act'), against the decree for eviction passed against him and in favour of the respondent in Civil Appeal No. 111 of 1963 by learned District Judge, Bhavnagar, Mr. N.J. Mankad. 2. The material facts for this second appeal, briefly stated, are as under : The respondent owns a house in Marine Society, Bhavnagar, which is rented to the defendant on a monthly rent of Rs. 45/-. He had filed Civil Suit No. 636 of 1958 to evict the defendant on the ground of personal requirement, but that suit was settled and the defendant continued under a fresh rent note of 1st July, 1959 on the same terms. The respondent filed present Civil Suit No.316 of 1961 against the appellant-defendant to recover possession of the leased premises, arrears of rent and mesne profits, etc. Possession was sought for, initially on several grounds with which we are not concerned in the present appeal. We are concerned with a ground raised by him by a subsequent amendment made in the plaint. He pleaded therein that the suit house was constructed in the year, 1956 A.D. and, therefore, in view of the provisions of sub-section (2) of Section 4 of the Act, he was entitled to exemption and hence, the provisions of the Act did not apply to the suit house. 3. The learned trial Judge recorded a finding that though the premises had been erected anew after 1st January, 1951, the landlord was not entitled to the exemption clause as the suit premises were again let to the defendant after compromise in the earlier suit on execution of a rent note dated 1st July, 1959. According to the learned trial Judge, this being a second letting of the suit premises after 1st January, 1951, the plaintiff was not entitled to get exemption from the provisions of the Act. In that view of the matter, he dismissed the plaintiff's suit for possession with costs in proportion to the relief claimed. Regarding the money-claim, a decree was passed against the defendant for an amount of Rs.395-50 Nps. 4. Against that judgment and decree passed against the plaintiff, the plaintiff filed Civil Appeal No. 111 of 1963 in the District Court at Bhavnagar. 5.
Regarding the money-claim, a decree was passed against the defendant for an amount of Rs.395-50 Nps. 4. Against that judgment and decree passed against the plaintiff, the plaintiff filed Civil Appeal No. 111 of 1963 in the District Court at Bhavnagar. 5. The learned District Judge found that the plaintiff was entitled to exemption in view of the provisions of Section 4, sub-section (2) of the Act. According to him, this subsequent letting will not mean that the condition of the premises having been let for the first time on or after 1st January, 1951, is not satisfied. According to the learned District Judge, if the premises were new premises erected on or after 1st January, 1951 and they were let for the first time, on or after 1st January, 1951, such premises were intended to be exempted from the provisions of the Act. It did not matter if such a newly constructed house which was first time let on or after 1st January, 1951, came to be let second time or third time after its construction. He interpreted that section in that manner, observing : "The object of sub-section (2) is clearly to encourage construction of new premises by allaying the fears of the landlords and assuring them that they would not be subjected to the rigours of the Rent Control Act so far as their houses constructed after 1st January, 1951 are concerned. The provision is clearly intended to encourage house-building activity which would also be for the benefit of the general body of tenants. If the Legislature had intended that the Act should not apply to premises erected on or after 1st January, 1951, it is difficult to appreciate that it should have further intended that the benefit would be lost as soon as the first letting ends and the newly constructed house is let for the second time after its construction. To say this is not merely to interpret sub-sec. (2) with reference to the real, apparent or supposed intention of the legislature. Even the words used in sub-section (2) cannot mean that the Act would apply to new premises when they are let for the second time in their career.
To say this is not merely to interpret sub-sec. (2) with reference to the real, apparent or supposed intention of the legislature. Even the words used in sub-section (2) cannot mean that the Act would apply to new premises when they are let for the second time in their career. New premises let for the second time would also be premises which were 'let for the first time on or after 1st January, 1951.' So, even on the very words of sub-section (2), it is not possible to argue that the benefit conferred on new premises by sub-section (2) enures only for the period of its first letting and it is lost from its secondletting. The meaning which the lower Court appears to have assigned to this sub-section cannot be supported either in view of the intention of the legislature or the words of the sub-section. This provision for the benefit of new premises, meant for encouraging house-building activity for the benefit of both classes of landlord and tenant has been in force for over 13 years and so far I have not heard it being suggested at any time that landlords of new premises cannot evict their tenants under second further letting except on the grounds laid down in Section 13." 6. In view of this opinion of his, he allowed the appeal and passed a decree for eviction in favour of the plaintiff, directing the defendant to give vacant possession of the suit house to the plaintiff on or before Akha-Trij, i. e. 14th May, 1964. Parties were ordered to bear their own costs in both the Courts. 7. Against that judgment and decree, the original defendant-tenant has preferred the present second appeal to this Court. 8. Mr. D.U. Shah, learned Advocate, appearing for the appellant, urged that this interpretation made by the learned District Judge was not justified.
Parties were ordered to bear their own costs in both the Courts. 7. Against that judgment and decree, the original defendant-tenant has preferred the present second appeal to this Court. 8. Mr. D.U. Shah, learned Advocate, appearing for the appellant, urged that this interpretation made by the learned District Judge was not justified. If the legislature had intended to give exemption from the provisions of the Act, to the new premises erected on or after 1st January, 1951, irrespective of the fact that they were being let or re-let from time to time after 1st January, 1951, the legislature would have used the words in sub-section (2) of Section 4 of the Act - "this Act shall not apply to new premises erected on or after 1st January, 1951." It would not have been necessary for the legislature in that event to introduce the words "and let for the first time on or after 1st January, 1951." It was contended by Mr. Shah that the real object of the legislature was to see that this building activity goes on and the landlords are induced to erect new buildings and as they would be assured that for the 1st letting they do, during the period of that first letting the rigours of the Act would not apply. The legislature never intended that such new premises erected on or after 1st January, 1951, were to be exempted for all time to come, so long as this Act remains in force, even if there was 2nd letting, 3rd letting and so on. In support of his argument, he invited my attention to two unreported decisions of this Court, one decision of a Division Bench and one decision of a single Judge of this Court. 9. I will first refer to the decision of a single Judge of this Court, relied upon by Mr. Shah, Sompura J., in Second Appeal No.467 of 1965, D/-20-11-1968 (Guj), had to deal with a case where in an old building owned by the landlord, there was a tenant. A compromise was entered into between the parties whereby the tenant was to be given the premises which were to be reconstructed after the demolition of the old building on an agreed rent of Rs. 10/- per month. The tenancy of that tenant had admittedly come into force prior to 1st January, 1951.
A compromise was entered into between the parties whereby the tenant was to be given the premises which were to be reconstructed after the demolition of the old building on an agreed rent of Rs. 10/- per month. The tenancy of that tenant had admittedly come into force prior to 1st January, 1951. As the premises were re-erected on or after 1st January, 1951, the landlord came forward with a plea that he would get the benefit of this exemption clause and the tenant could not get the protection under the Rent Act. That contention was negatived by Sompura. J., observing : "In order that Section 4(2) of the Act would apply, two conditions should be fulfilled : (1) The premises must be newly erected for the first time on or after 1st January, 1951. (2) The premises must be let for the first time after 1st January, 1951. It is an admitted fact that the premises in this case were erected from the foundation in the year, 1959 or 1960. Hence the first condition that the new premises are erected for the first time after 1-1-1951 is satisfied in this case. But we will have to consider whether second condition as to they were let for the first time on or after 1st January, 1951 is satisfied. This is not the case in which after reconstruction in the year 1959-60 the premises were let to a new tenant or to the present-defendant afresh." As there was letting prior to the 1st January, 1951, Sompura, J. came to the conclusion that the landlord was not entitled to the exemption from the provisions of the Act. That decision does not support the submission made by Mr. Shah. On the contrary, that decision indicates as to why the legislature was careful in wording this sub-section (2) of Section 4 of the Act in the manner it has been worded. There could be cases where there may be previous tenants in the old building. That building may be demolished and the building reconstructed after 1st January, 1951. That condition referred to in Section 4(2) of the Act would be satisfied in that event.
There could be cases where there may be previous tenants in the old building. That building may be demolished and the building reconstructed after 1st January, 1951. That condition referred to in Section 4(2) of the Act would be satisfied in that event. But the legislature intended that this exemption should be confined to the cases where such newly erected premises are let for the first time after 1st January, 1951, otherwise such old tenants who agreed to hand over possession for reconstruction would lose benefit of the provisions of Act. 10. Mr. H.P. Sompura, learned Advocate, appearing for the respondent, in support of his argument, relied upon the decision of a single Judge of this Court in Second Appeal No.328 of 1962, D/-11-10-1968 (Guj), Mehta J., who has decided that appeal, had to deal with this very question in that second appeal. After referring to Section 4(2) of the Act which reads : "This Act shall not apply to new premises erected and let for the first time on or after the 1st January, 1951." it is observed : "This is the exemption section and the exemption is attracted to the new premises. The exemption is with reference to the particular premises falling within Section 4(2) and it does not depend on the person concerned. The entire scheme of Section 4 is to exempt certain premises............" It is further observed therein : "Exemption under Sec.4(2) would be attracted if the premises in question fulfil the following conditions : (1) they must be new premises, (2) erected and let, (3) for the first time, (4) on or after 1-1-51." In that case also, there was no controversy that the premises were erected and let for the first time on or after 1st January, 1951. The contention raised therein was that as part of the new premises was further let on more than one occasion subsequently, such letting ceased to be the letting for the first time and, therefore, the premises to which the exemption was originally attracted ceased to enjoy such exemption. The whole controversy therefore was in regard to the interpretation of the words "let for the first time on or after 1st January, 1951" and particularly, as regards the expression "first".
The whole controversy therefore was in regard to the interpretation of the words "let for the first time on or after 1st January, 1951" and particularly, as regards the expression "first". It was observed by Mehta, J. : "On a plain, literal, grammatical interpretation, in the context of the exemption in respect of certain newly erected premises, it is obvious that once the exemption is attracted on fulfilment of these two conditions, to the new premises, which are erected and let for the first time on or after 1st January, 1951, the exemption could never be lost because of the subsequent letting of the premises. The exemption does not depend on the different occasions when it is let. What is material is that the new premises which are erected must have been let for the first time on or after 1-1-51. It is not for me to go into the question as to whether the expression "for the first time on or after 1-1-51" governs both the words "erected and let" in this case. In Lalsing v. Hamidmiyan, (1966) 7 Guj LR 861, my learned brother Sarela, J., has in terms held at p. 864 that the expression "for the first time" has reference to "erection" and "letting". My learned brother in terms held that for a building to be new or newly erected it was not necessary that there should be no building at that place before. If a building was destroyed and a different building took its place, whether on the whole or part of the area on which the old building stood, it would be reasonable to call it a new building. If the building was not destroyed but underwent a reconstruction, then whether or not the result was a new building, would depend upon the nature of the reconstruction. If there had been change of identity then what had come into existence was a new building. If the building was new in accordance with this test, the premises could be called new premises within the meaning of Section 4(2). In such cases if the letting was done prior to 1-1-51 and the old tenant had continued, it is obvious that the second condition would not be fulfilled, even if the construction of the new building in this sense had been done after 1-1-51.
In such cases if the letting was done prior to 1-1-51 and the old tenant had continued, it is obvious that the second condition would not be fulfilled, even if the construction of the new building in this sense had been done after 1-1-51. That explains the import of the expression "for the first time" even in the context of letting, and these words would not be redundant as contended by Mr. Shah. Mr. Shah's argument that what is let for the second or third time could never be said to be let for the first time on or after 1-1-51 is completely misconceived. Once these necessary conditions are fulfilled by the new premises, because of being erected and let for the first time after the relevant date, they would not cease to fulfil the said two conditions on the occasion of the subsequent letting. Second or third letting would itself imply that there was first letting and so long as the first letting was on or after 1-1-51, the second ingredient in Section 4(2) would be necessarily fulfilled, even on the occasion of the subsequent letting. Therefore, there is no substance whatever in Mr. Shah's argument that on this Construction, the words "for the first time" would be rendered redundant and the legislature could have equally contended Itself by deleting that clause, if it intended to exempt all such new premises erected and let on or after 1-1-51. As we have already stated, the context of this exemption is by reference to certain premises let first on or after 1-1-51, and so if the letting of the premises satisfied this relevant condition of the first letting on or after 1-1-51, the exemption would not be lost because of any subsequent letting. This construction would be more in accordance with the scheme of this exemption which is not with reference to persons who are on the premises, but with reference to premises itself. It would also carry out the purpose of this exemption. The legislative intention of exempting new premises would be of encouraging building activity so that more houses can be provided for the tenants. If any other construction is adopted, the whole purpose of encouraging building activities by exempting new premises constructed and let after the relevant date would be frustrated, as the exemption which would be attracted would be lost immediately after the first letting was over.
If any other construction is adopted, the whole purpose of encouraging building activities by exempting new premises constructed and let after the relevant date would be frustrated, as the exemption which would be attracted would be lost immediately after the first letting was over. It may be within few days or few months or even years, it was made to depend on subsequent letting. That would not only change the entire character of this exemption as to particular premises in Section 4(2), but would defeat its very object of encouraging building activities, sought to be achieved by taking out these new premises from the scope and ambit of the rent control legislation." It thus appears that all these questions raised by Mr. Shah were raised by him before my learned brother Mehta, J. and all those contentions have been negatived. In my opinion, that has been rightly done. Furthermore, that decision also is binding on me. 11. It was contended by Mr. Shah that in view of the decision of a Division Bench of this Court in Second Appeal No.443 of 1963, D/-13-12-1968 (Guj) the correctness of the decision given by Mehta, J., could not be accepted. On considering the decision of a Division Bench in Second Appeal No.443 of 1963, I do not find any ratio therein which runs counter to the decision of Mehta, J. The Division Bench also referred to the decision of Sarela, J., in (1966) 7 Guj LR 861 (supra) and approved the view taken by Sarela, J. It was contended before the Division Bench on behalf of the respondent (original plaintiff) : "If the present premises are erected for the first time or after January 1, 1951 then only they can be let out and no question of letting out would arise unless the new premises are first erected. It was, therefore, contended that the only possible construction would be that Section 4(2) applies to those new premises which are erected but which are erected at any time either before or after January 1, 1951; but are let out for the first time on or after January 1, 1951. This construction was accepted by the learned District Judge. With respect, we are unable to accept his conclusion.
This construction was accepted by the learned District Judge. With respect, we are unable to accept his conclusion. In the first place, it is possible that there may be an existing tenant in a building, which was in existence prior to January 1, 1951 and the existing tenant may enter into an argreement with the landlord under which the old building is pulled down and a new building with a new identity comes into existence; but by virtue of the agreement under which the landlord was permitted to pull down the old building and put up the new building, the old tenancy is agreed to be continued between the landlord and the tenant. In such a case though the premises are new and are erected for the first time on or after January 1 1951, they cannot be said to have been let for the first time on or after January 1, 1951. The legislature had to provide for all possible contingencies when it laid down the exemption clause under Section 4(2) and, therefore, it has laid down the datum line both as regards the erection as well as for letting out. An illustration of the kind which we have just given is provided by the facts in Second Appeal No. 467 of 1965 (Guj) decided by our learned brother Sompura, J., on November 20, 1968." The Division Bench has approved the correctness of that decision of Sompura, J., which I have also referred to earlier. There is, therefore, nothing in this decision of the Division Bench which runs counter to the ratio of the decision of Mehta, J. 12. Mr. Shah laid emphasis on the observations made in the decision of this Division Bench which I will presently refer to. It is observed therein : "It is, therefore, to provide against all possible contingencies that the legislature has advisedly laid down three conditions viz., that the premises must be new secondly, that the new premises must be erected on or after January 1, 1951; and thirdly, that they must be let out for the first time on or after January 1, 1951.
It was contended on behalf of the original plaintiff before us that the words : "for the first time" occurring immediately after the word "let" in Section 4(2) indicate that the datum-line of January 1, 1951, is applicable only to letting and not to the erection of the building. It was contended in this connection that once the building is erected, the erection lasts permanently and there cannot be any question of a building being erected for the first time and since the words : "for the first tune" are connected with the words : "on or after 1st January, 1951" it must be taken that only it is letting which is capable of being for the first time on or after 1st January 1951 and not the erection of the building. This argument cannot be accepted because there cannot be any question of building being erected for the first time. The words "for the first time" must go with "letting" but so far as the datum-line 1st January 1951 is concerned, it must go both with the erection and letting for the first time." The construction of Section 4 (2) which has appealed to us is, in our opinion, also in consonance with the policy of the legislature under which on the one hand protection is sought to be given to the tenants and on the other hand an attempt is made to encourage new construction so that the landlords and owners of properties might be induced to put up new structures and let them out. In respect of such premises which are erected after 1st January, 1951 and let for the first time after 1st January, 1951 there cannot be any question on the interpretation that we put upon Section 4(2), that such premises would not be exempt from the operation of the Saurashtra Rent Control Act, and thereby there would be an inducement to the owners of property and landlords to put up new structures and let them out." The only contention negatived therein was that such premises which are newly constructed need not have been erected or constructed before 1st January 1951.
There is nothing in this decision even to suggest indirectly that such second letting of admittedly new premises erected after 1st January, 1951 and which were first let on or after 1st January, 1951, would lose the benefit of exemption as they came to be re-let. I am, therefore of opinion that the argument of Mr. Shah that this decision of the Division Bench of this Court has raised a doubt about the correctness of the decision of my learned Brother, Mehta, J., is not well founded. In my opinion Mehta, J.. has rightly decided the case and I see no good reason to refer it to a larger Bench. The result is that the appeal fails. 13. On behalf of the plaintiff-respondent cross-objections have been filed in regard to the mesne profits in lieu of rent for use and occupation from the date of the suit upto the date of the delivery of possession. 14. It appears that through oversight, the learned District Judge has forgotten to pass this order regarding mesne profits. Such an order ought to have been passed when the plaintiff succeeded in getting a decree for eviction. The agreed rent was Rs. 45/- per month. Mesne profits have been claimed at that rate. The plaintiff is entitled to claim mesne profits at that rate from the date of the suit till the delivery of possession. It is stated at the Bar that possession of the suit premises has already been handed-over by the appellant to the respondent. Cross-objections are therefore allowed. 15. The point that was raised by Mr. Shah in the appeal was a controversial question. When the appeal was filed, there was no decision of this Court on this point. The question was a debatable one. Taking into consideration these facts and circumstances, it will be proper and just to order each party to bear its own costs in this appeal as well as in cross-objections. 16. So far as cross-objections are concerned through oversight the learned District Judge had forgotten to pass an order regarding mesne profits. 17. The appeal is dismissed. Cross-objections are allowed and the decree passed by the learned District Judge is modified. The appellant-defendant is directed to pay mesne profits at the rate of Rs. 45/- per month to the plaintiff respondent from the date of the suit upto the delivery of possession of the suit premises.
17. The appeal is dismissed. Cross-objections are allowed and the decree passed by the learned District Judge is modified. The appellant-defendant is directed to pay mesne profits at the rate of Rs. 45/- per month to the plaintiff respondent from the date of the suit upto the delivery of possession of the suit premises. The decree passed for eviction is confirmed. Each party is ordered to bear its own costs in this second appeal as well as in cross-objections.