JUDGMENT : A.D. DESAI, J. 1. In these two revision applications an interesting question of law is raised and it is whether the Tribunal constituted under section 13(3-B) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the Act), is required to hear a tenant before granting a certificate in favour of the landlord as required by section 13(3-A) of the Act. 2. The relevant facts are that the petitioner in both the revision applications is the owner of final plot No. 558 measuring 5931 sq. yards of Ellis Bridge, Town Planning Scheme No. 3. It is a composite block of land containing many buildings units including two tenement buildings occupied by the tenants. One of these tenements buildings consists of ground floor and upper floor. The ground floor and the first floor of this building are separately let out to the respondents in these petitions in the year 1964 the petitioner through his Engineer, approached the then Executive Engineer, Road and Buildings with tentative plans for obtaining a certificate under section 13(3-B)(a) and (b) of the Act. The Executive Engineer granted the certificate to the petitioner. The petitioner thereafter filed Civil Suits Nos. 1619 and 1606 of 1965 against said tenants Chandrakant and Anandilal, for ejectment under section 13(1)(hh) of the Act in the Court of the Small Causes, Ahmadabad. The petitioner produced the requisite certificate of the Tribunal along with the plaint in each suit. The two suits were consolidated for trial and were decided by a common judgment of the Court dated March 30, 1968. The trial Court held that the petitioner's requirement was neither bona fide nor reasonable on the sole ground that only ¼th area of the premises was to be utilised for the new premises. The petitioner then tiled Civil Appeals Nos. 200 and 201 of 1968 before the Appellate Bench of the Small Causes Court, Ahmadabad, which were ultimately dismissed. These two revision applications were, therefore, filed challenging the said decision in appeals. The revision applications came up for hearing before the learned Single Judge of this Court, who referred to a Division Bench the issue whether the Tribunal is required to hear the tenant before granting a certificate in favour of the landlord as provided in section 13(3-A) of the Act.
The revision applications came up for hearing before the learned Single Judge of this Court, who referred to a Division Bench the issue whether the Tribunal is required to hear the tenant before granting a certificate in favour of the landlord as provided in section 13(3-A) of the Act. It must be noted that the point referred to us was argued before the learned Judge and at the time of arguments the petitioner admitted that the tenants were not heard by the Tribunal during the proceedings of granting the certificate under Section 13(3-B) to the landlord. 3. Mr. Nanavati appearing for the petitioner contended that the question whether an authority is a Tribunal having power to decide judicially or an administrative body assigned with the functions which are to be discharged in the administrative manner must depend upon the provisions of the concerned statute. The provisions of the Act restrict the right of the landlord to evict a tenant and section 13 of the Act provides the grounds on which the landlord can evict a tenant. One of the grounds on which the landlord can ask for a decree of possession is section 13(l)(hh) of the Act. Sections 13(3-A) and (3-B) put further restrictions on the right of a landlord to obtain a decree of eviction under section 13(l)(hh) of the Act. The restrictions placed by the provisions of sections 13(3-A) and (3-B) of the Act are in the nature of a condition precedent and this is clear because the said provisions amongst other things require production of a certificate under subsection (3-B) of section 13 of the Act at the time of the institution of the suit. While issuing a certificate under Section 13(3-B) of the Act the Tribunal is not adjudicating upon any right of the parties. The plaintiff-landlord requires the certificate under section 13(3-B) of the Act to satisfy a condition precedent. The landlord has to produce a Tribunal's certificate as to whether plans are properly prepared and approved by the Municipality, whether there are necessary funds with the landlord and whether the landlord is the owner of the property in dispute. The landlord is again required to establish the aforesaid facts before the Rent Court to show his reasonable and bona fide requirement of the premises for erecting a new building after demolition.
The landlord is again required to establish the aforesaid facts before the Rent Court to show his reasonable and bona fide requirement of the premises for erecting a new building after demolition. It is open to the tenant to raise objections in the Court with respect to the validity of the certificate as well as with regard to the plans, estimates, title and the financial condition of the landlord and a full fledged inquiry is not contemplated by sections 13(3-A) and 13(3-B) of the Act. A certificate is required to be issued by the Tribunal to enable the landlord to obtain a decree of eviction against the tenant on the basis of the right given to the landlord under section 13(1) (hh) of the Act. In issuing a certificate the Tribunal has not to act in arbitrary or mechanical manner but has to exercise its discretion on the basis of objective facts. Guideline for exercising the power of issuing certificate is given as per the provisions of the rules framed by the Government under the power vested in it. The aforesaid rules and provisions of the Act do not make specific provision for issuing a notice to the tenant before a certificate is granted and there is no provision which requires that the tenant should be heard at that stage. 4. Mr. Oza for the respondents on the other hand contended that a Tribunal constituted under section 13(3-B) of the Act has to grant a certificate to the landlord after its satisfaction with regard to the matters mentioned in sub-section (3-B) of section 13 of the Act. the satisfaction has to be reached by the Tribunal on the basis of evidence produced before it. The decision of the Tribunal is bound to affect a tenant because eviction proceedings shall be initiated in a court of law against the tenant under section 13(1)(hh) of the Act on the basis of the certificate and thus the right to the tenant to remain in possession of the premises will be seriously threatened. The legislature by enacting the provisions of sections 13(34) and 13(3-B) of the Act conferred a power to decide and grant a certificate and on the production of such certificate a suit for eviction against a tenant can be instituted under the provisions of section 13(1)(hh) of the Act.
The legislature by enacting the provisions of sections 13(34) and 13(3-B) of the Act conferred a power to decide and grant a certificate and on the production of such certificate a suit for eviction against a tenant can be instituted under the provisions of section 13(1)(hh) of the Act. The legislature calls the authority a Tribunal and confers upon it a jurisdiction to decide and issue a certificate without which no decree of eviction can be passed. In exercise of the power conferred on it the Government has also laid down the procedure which has to be followed before granting a certificate under section 13(3-B) of the Act. In short a quasi-judicial Tribunal is constituted to issue a certificate. That being the legal position the right of a tenant to be heard is implied in the provisions. Before issuing a certificate the Tribunal has to satisfy itself with regard to the matters mentioned in section 13(3-B) of the Act and on the basis of the satisfaction the tribunal has to issue a certificate. This certificate can be conclusive evidence or has a presumptive at least an evidentiary value and shall shift the burden on the tenant to disprove the facts which the certificate certifies. 5. In order to appreciate these contentions it is necessary to refer to relevant legal provisions. Section 13 of the Act so far relevant runs as follows : "13(1) Notwithstanding anything contained in this Act but subject to the provisions of section 15, a landlord shall be entitled to recover possession of any premises if the Court is satisfied. (hh) That the premises consist of not more than two floors and are reasonably and bona fide required by the landlord for the immediate purpose of demolishing them and such demolition is to be made for the purpose of erecting new building on the premises sought to be demolished.
(hh) That the premises consist of not more than two floors and are reasonably and bona fide required by the landlord for the immediate purpose of demolishing them and such demolition is to be made for the purpose of erecting new building on the premises sought to be demolished. (3-A) No decree for eviction shall be passed on the ground specified in clause (hh) of sub-section (1), unless the landlord produces at any time of the institution of the suit a certificate granted by the Tribunal under sub-section (3-B) and gives an undertaking- (a) That the new building to be erected by him, shall, subject to the provisions of any rules, by-laws or regulations made by a local authority, contain not less than two times the number of residential tenements, and not less than two times the floor area, contained in the premises sought to be demolished ; (b) That the work of demolishing the premises shall be commenced by him not later than one month, and shall be completed not later than three months, from the date he recovers possession of the entire premises ; and (c) That the work of erection of the new building shall be completed by him not later than fifteen months from the said date. (3-B)(a) For the purpose of sub-section (3-A), the State Government may from time to time constitute a Tribunal consisting of such persons and for such local area as it thinks fit. (b) The tribunal constituted under clause (a) may grant a certificate after being satisfied that - (i)The plans and estimates for the new building have been properly prepared ; (iii) The necessary funds for the purpose of the erection of the new building are available with the landlord ; and (iv) Such other conditions as the State Government may by general or special order specify, have been satisfied.." In exercise of the powers conferred by clause (c) of sub-section (3-B) of section 13 and section 49 of the Act the Government framed the following rules :- 1. These rules may be called the Bombay Rents, Hotel and Lodging House Rates Control (Tribunal) Rules, 1951. 2.
These rules may be called the Bombay Rents, Hotel and Lodging House Rates Control (Tribunal) Rules, 1951. 2. A landlord applying to the Tribunal for a certificate under sub-section (3-B) of section 13 of the Act shall forward along with his application - (1) Copies, in duplicate, of plans, duly certified by a qualified architect or engineer, showing the layout, plan and area of each of the tenements in the existing premises sought to be demolished, and showing the layout, plan and area of each of the tenements in the new buildings or building to be erected ; (2) Copies, in duplicate, of estimates, duly certified by a qualified architect or engineer, of the cost of construction of the new building to be erected, and (3) Copies, in duplicate, of statements showing the monthly rent of each of the tenements in the existing premises sought to be demolished, and shall produce for inspection by the Tribunal - (1) Documents in original, together with a copy of each proving his present title to the land on which his existing premises stand ; (2) Documents, in original, such as Bank Account Books, Securities and Bonds showing that the total amount of his existing financial assets is not less than one-third of the estimated cost of construction of the new building to be erected. 3. Upon being satisfied with the material furnished under rule 2, the Tribunal shall grant provisional approval to the plan and estimates of the new building to be erected. 4. The Tribunal shall then return one copy of the plan and estimates of the new building so approved by it to the landlord, and shall ask him to re-submit the plan to the Tribunal after obtaining the approval of the Municipality and other authorities concerned as may be necessary to it. 5. On resubmission by the landlord of the plan of the new building, duly approved by the Municipality and other authorities concerned, the Tribunal shall grant to the landlord a certificate finally, approving the plan, and shall return the copy of the plan duly approved by the Municipality and other authorities concerned, if any, and one copy of the plan of the existing premises. 6.
6. The remaining copies of the plans, estimates and documents received or produced for inspection with the original application of the landlord shall form part of the record of the 'tribunal." It must be noted that the legislative intent in enacting section 13(l)(hh) of the Act is to enable the landlord to provide in the interest of public more housing accommodation by providing more area and more tenements and that too in accordance with rules and regulations relating to construction of new building as prevalent from time to time. At the same time the legislature to prevent the abuse of the new provisions by the landlord introduced several other provisions in the Act to the effect (1) that the evicted tenants get in lieu of their original premises new premises in the new buildings at the standard rent ; (2) that the landlords do not demolish the buildings without obtaining necessary certificate from the Tribunal, appointed in that behalf, to scrutinise the prescribed credentials and capabilities of the landlord, proposing to demolish such building ; (3) that such landlords even after obtaining necessary certificate from the Tribunal should give an undertaking to the court in prescribed terms to carry out certain conditions, before the Court passes an ejectment decree in their favour ; (4) that the extenants are given certain rights to approach the Court in case the landlords commit a breach of this undertaking either to demolish the original building, to erect the new building or to provide tenements in the newly constructed buildings, and the Courts are empowered to grant appropriate reliefs to the ex-tenants ; (5) that the breach of these conditions is made an offence punish. able with imprisonment and/or fine ; vide sections 13(3-A), 13(3-B) 17-A 17-B and 17-C of the Act. Now section 12 of the Act provides that a landlord shall not be entitled to recover possession if the tenant pays rent and is ready and willing to perform other conditions of tenancy. To obviate the difficulties created against the landlords by section 12 of the Act, provision is made in section 13 entitling the landlord to get an ejectment decree and recover possession on the grounds mentioned in clauses (a) to (1) of section 13,1) of the Act.
To obviate the difficulties created against the landlords by section 12 of the Act, provision is made in section 13 entitling the landlord to get an ejectment decree and recover possession on the grounds mentioned in clauses (a) to (1) of section 13,1) of the Act. The provisions of the Act in the first instance completely deprive the landlord of the ordinary rights of a suit to eject the tenants in accordance with the provisions of the Transfer of Property Act. By the provisions of section 13 of the Act a right is conferred on the landlord, if the landlord is in a position to satisfy the Court as regards the matters mentioned in sub-clauses (a) to (1) of section 13(l) of the Act. The provisions of section 13(1)(hh) of the Act have to be read with the provisions of sub-sections (3-A) and (3-B) of section 13 of the Act. When so read to is clear that the landlord can obtain a decree of eviction of a tenant if the requirements of production of the certificate granted under sub-section (3-B) of section 13 is satisfied at the time of the institution of the suit filed on the ground mentioned in section 13(1)(hh) of the Act. This requirement of production of the certificate at the time of the institution of the suit has to be substantially complied with. The object of the Legislature in enacting the provisions of sub-sections (3-A) and (3-B) of section 13 of the Act is also to prevent the landlord from harassing tenants by institution of frivolous and vexatious suits for eviction against them. To put in short, the conditions prescribed in subsections (3-A) and (3-B) of section 13 of the Act prevent a landlord from abusing the right conferred on him by section 13(1)(hh) of the Act. Now sub-section (3-B) of section 13 provides for a Tribunal and empowers it to issue a certificate on its being satisfied as to the matters referred to in clauses (1) to (iv) of that sub-section. The material expression used in sub-section (3-B) is "the Tribunal constituted under clause (a) of sub-section (3-B) may grant a certificate after being satisfied" and this expression has two aspects. The first is that the Tribunal has a discretion to grant a certificate and this is so because the word used in the expression is "may".
The material expression used in sub-section (3-B) is "the Tribunal constituted under clause (a) of sub-section (3-B) may grant a certificate after being satisfied" and this expression has two aspects. The first is that the Tribunal has a discretion to grant a certificate and this is so because the word used in the expression is "may". The discretion has to be exercised on the basis of the Tribunal's satisfaction and not arbitrarily or mechanically or as a matter of right. The authority to issue the certificate has to be exercised after considering evidence relating to the title, the landlord's immediate financial resources and plans and estimates of new construction as provided by the rules. The provisions do not contemplate a full fledged inquiry. There is no specific provision of giving a notice to a tenant or of hearing him before issuing the certificate. For the purpose of exercising discretion on the basis of satisfaction, a procedure has been provided by the provisions of law. The legislative intent was that subjective satisfaction must be based on the guide-lines given for the exercise of the power. The Tribunal cannot exercise powers arbitrarily or as it likes or on the basis of irrelevant consideration or omitting to consider relevant factors. If the Tribunal acts in that manner the certificate can be challenged in the suit for eviction which the landlord files. A certificate granted by the Tribunal is an evidence that the landlord has title to the premises, that the plans are valid, legal and approved by the municipality, that the estimates of the architect or engineer are proper and that the landlord has satisfactory financial resources to demolish and erect a new building but that is so only on the date on which the certificate has been granted. Such certificate has no evidentiary value beyond that date. The provisions relating to granting of certificate under section 13(3-B) of the Act are like the provisions of granting sanction to prosecute in criminal cases. It must be noted that the Government has constituted the Executive Engineer of Roads and Buildings Division within whose jurisdiction the property is situated as a Tribunal and given it the power to consider the questions of title and financial capacity of the landlord which are normally the functions to be discharged by a Civil Court.
It must be noted that the Government has constituted the Executive Engineer of Roads and Buildings Division within whose jurisdiction the property is situated as a Tribunal and given it the power to consider the questions of title and financial capacity of the landlord which are normally the functions to be discharged by a Civil Court. It must also be noted that no appeal is provided against the order granting a certificate or rejecting a certificate. The relevant provisions considered from all aspects lead to the conclusion that the legislature constituted an administrative Tribunal to issue a certificate. The Tribunal constituted under sub-section (3-B) of section 13 of the Act is neither a quasi-judicial nor power to decide a lis between the parties is given to it. This is also apparent if the provisions of section 13(1) (hh) of the Act are considered. The provisions of section 13(1)(hh) are that a landlord shall be entitled to possession of premises if the court is satisfied that the premises consisting of not more than 2 floors are reasonably and bona fide required for demolition and for erecting a new building. The court has to judge reasonable and bona fide requirement of the landlord for the purpose of section 13(1)(hh) of the Act. As observed by Their Lordships of the Supreme Court, while considering the provisions of section 21 of the Mysore Rent Control Act, which are analogous to section 13(l)(hh) of the Act, vide M/s. Panchmal Nayayana Shenoy v. Basthi Venkenesh Shenoy, AIR 1971 Supreme Court 942, reasonable and bona fide requirement of the landlord has to be judged by surrounding circumstances which will include his means and other steps taken by him in that regard. Therefore, in considering reasonable and bona fide requirement of the landlord under the clause, the court shall take into consideration the question regarding the plans of new construction, the title of the landlord, financial resources of the landlord to erect the new construction, etc. and the landlord is duty bound to satisfy the Court on these points before he can obtain a decree under section 13(l)(hh) of the Act. That burden to prove the aforesaid facts lies on the landlord and is not in any manner shifted to the tenants.
and the landlord is duty bound to satisfy the Court on these points before he can obtain a decree under section 13(l)(hh) of the Act. That burden to prove the aforesaid facts lies on the landlord and is not in any manner shifted to the tenants. Issuance of the certificate by the Tribunal, even after considering the validity of plans, title of the landlord or satisfactory financial condition of the landlord does not in any manner whittle down the power of the Court to consider the said points while examining the question of reasonable and bona fide requirement of the landlord for erecting a new building after demolition of the existing one under section 13(l)(hh) of the Act. The legislature does not contemplate any full- fledged inquiry at both the stages in respect of the same factors, namely. one before the Tribunal and another before the Court as this would be costly affairs in most cases for the tenants. The legislative intent, therefore, in enacting the provisions of section 13 (3-A) and section 13(31-B) of the Act is to protect tenants from frivolous and vexatious litigation's for evicting them from the premises on the ground mentioned in section 13(1)(hh) of the Act. The relevant provisions do not contemplate full-fledged inquiry before the Tribunal and the work done by the Tribunal is not of judicial investigation. The Tribunal has to act as an administrative officer. In order that the Tribunal acts fairly and justly the procedure is prescribed by rules framed by the Government. It must be made clear that it is open to the tenant to challenge the certificate granted by the Tribunal in a suit of his eviction under section 13(l)(hh) of the Act and there is no dispute on this point because Mr. Nanavati conceded to the point. Aforesaid view is also taken by the Bombay High Court, vide Vijpal Dhanji v. Chhotubhai R. Desai., Miscellaneous No. 139 of 1953, decided on July 2, 1953. 6. In support of his contention Mr. Oza relied upon the decision of the Supreme Court Lala Shri Bhagwan and another v. Ram Chand and another, AIR 1965 Supreme Court 1787 which was a case under the U.P. (Temporary) Control of Rent and Eviction Act, 1947.
6. In support of his contention Mr. Oza relied upon the decision of the Supreme Court Lala Shri Bhagwan and another v. Ram Chand and another, AIR 1965 Supreme Court 1787 which was a case under the U.P. (Temporary) Control of Rent and Eviction Act, 1947. The question which arose in that case was whether revision application to Government against the order granting permission to sue in eviction granted by the authority to the landlord required the exercise of a purely administrative function. Ordinarily a landlord could evict a tenant by complying with the relevant provisions of the Transfer of Property Act but the provisions of section 3(a) of the U P. (Temporary) Control of Rent and Eviction Act, 1947 imposed a statutory limitation on the said power by requiring the proof of one or-the other of the seven grounds stated in clauses (a) to (g) of section 3(l) before he could seek to evict his tenant. That limitation was removed by the sanction which the District Magistrate might grant. The order of the District Magistrate was revisable by the Commissioner whose order in turn was revisable by the Government. It is clear that the order passed under the said section affected statutory right of the tenants and, therefore, the Court held that it was necessary to hear the tenant before the Government disposed of the revision application. It is evident that the facts of that case are quite different from the facts of the present case, and, therefore, the observations made in the said case or the ratio laid down therein is inapplicable to the facts of the present case. 7. For the reasons aforesaid we answer the question referred to us that it is not necessary for the Tribunal to hear a tenant before granting certificate under Section 13(3-B) in favour of the landlord as provided in section 13(3-A) of the Act. 8. The result is that both the revision applications are now to be placed before a learned Single Judge for final disposal. Order accordingly.