Tribbunan Nath Mehrotra v. District Judge, Allahabad
1988-04-08
S.D.AGARWALA
body1988
DigiLaw.ai
JUDGMENT S.D.Agarwala, J. 1. This is a petition under Article 226 of the Constitution of India arising out of proceedings under section 21 (1) (a) of U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (hereinafter referred to as the Act). 2. Smt Kusum Kumari, wife of Ram Govind Misra is the landlady of the premises in dispute. The petitioner, Tribhuwan Nath Mehrotra is the tenant. The property in dispute is a shop in premises No. 87/131, K. P. Kakkar Road (Zero Road), Allahabad. The petitioner is carrying on the optical business therein under the name and style of "Swan and Company". The landlady filed an application for release of the shop on the ground of her personal need and the need of her sons to carry on cloth business in the disputed shop. According to her, she has no other source of livelihood. This application was contested by the petitioner. According to the petitioner-tenant, the respondent no. 3 has many houses and shops. She has other sources of livelihood and the allegation is that this release application has been filed simply to get it released and thereafter, give it on high rent. The Prescribed Authority by an order dated 15th September, 1980 dismissed the application for release. Aggrieved by the judgment dated 15th September, 1980, the landlady filed an appeal under section 22 of the Act. This appeal was allowed by the District Judge, Allahabad on 30th January, 1982. The judgment dated 30th January, 1982 has been impugned in the present writ petition. I have heard Sri K. M. Dayal, Senior Advocate on behalf of the petitioner and Sri A. K. Yog on behalf of respondent no. 3. 3. Learned counsel for the petitioner has urged fistly, that the findings recorded in regard to the bonafide need and on the question of hardship are vitiated in law, as the lower appellate court has reversed the findings on mere assumptions, without there being any basis on the record of the case.
3. 3. Learned counsel for the petitioner has urged fistly, that the findings recorded in regard to the bonafide need and on the question of hardship are vitiated in law, as the lower appellate court has reversed the findings on mere assumptions, without there being any basis on the record of the case. The second submission of learned counsel is that after the filing of the present petition in this Court, subsequent events have taken place which have a material bearing on the question whether the petitioner should be evicted from the property or not and consequently, it is a case where the matter should be remanded to the appellate court for giving an opportunity to the petitioner to place the subsequent events for consideration while arriving at the finding of bonafide need as well as in regard to the question of hardship. The last submission of learned counsel is that the application under section 21 (1) (a) of the Act is barred by contract, as the contract had been entered into between the landlady and the petitioner-tenant to the effect that the petitioner shall not be evicted from the premises in suit in perpetuity. 4. In regard to the first submission, I have examined the judgment of the lower appellate court. The lower appellate court has come to the conclusion that in the event the landlady is evicted from the building in which the cinema is being run, the landlady would be deprived of her only source of livelihood. The appellate authority has further found that the rent from the building would be hardly sufficient for maintenance of her family. In arriving at this finding, no evidence has been considered as to how much is the rent available to the landlady and as to whether that would suffice for livelihood or not. In my opinion, this finding is not supported by the evidence. Similarly on the question of hardship, the appellate court has found that the tenant petitioner is supplying lenses at Optical House, Sitapur. He has brushed aside the hardship of the tenant petitioner on the ground that the job of preparing lenses and supplying lenses can be carried on at secluded places and no building is required for the said business in a commercial area in my opinion, this view taken by the appellate court is wholly perverse.
He has brushed aside the hardship of the tenant petitioner on the ground that the job of preparing lenses and supplying lenses can be carried on at secluded places and no building is required for the said business in a commercial area in my opinion, this view taken by the appellate court is wholly perverse. Even if the lenses are prepared elsewhere, the petitioner has to carry on the business of supplying the same from some place. Where he can sell his goods. In any case, the finding, in my opinion, arrived at by the appellate court is wholly cryptic and no reasons have been given as to why the finding recorded by the Prescribed Authority is liable to be set aside. In the circumstances, in the interest of justice, I think it proper that the question of bonafide need as well as the question of hardship should be considered by the appellate court in the proper perspective. The first submission made by learned counsel for the petitioner, consequently, in my opinion, is well founded. In regard to the second submission made by learned counsel for the petitioner, after the filing of the present petition, one application was made on 9-9-1985 bringing certain subsequent events to the notice of the court. Thereafter, another application was made before I commenced the hearing of the petition on 7th April, 1988. In the application made on 9-9-1985, it has been averred that the landlady has let out the first floor of the building to M/s Sirsa Finance Private Limited. It has further been averred that the lodge, by the name of Allahabad Lodge, has been opened. The license of the said lodge is in the name of Sarad Kumar Misra, one of the sons of the landlady. It has been further averred that the landlady is going to construct a new cinema hall as her tenanted Naaz Cinema was under litigation. In this connection a suit no. 17 of 1977 was filed by the landlady against Someshwar Nath Bhargava for specific performance of the agreement to sell the land which was purchased by the landlady for the purpose of constructing a cinema hall. This suit was decreed by the trial court on 3-1-1983. Against this judgment, I am informed that an appeal has been filed in this Court and it is still pending.
This suit was decreed by the trial court on 3-1-1983. Against this judgment, I am informed that an appeal has been filed in this Court and it is still pending. This fact has been alleged by the tenant petitioner to show that in fact, after the cessation of the business of Naaz Cinema, the landlady has acquired a land for the purpose of constructing another cinema hall and as such, she will have other source of income for her livelihood. 5. In the application, which has been filed on 7th April, 1988, besides the facts already urged earlier, it has been further urged that the landlady has started parcel service by air mail in the name of M/s. Yogesh Courier Service, situate in the same building on the ground floor in which the shop is situated. It has been further brought to the notice of this court that the suit had been filed by the sons of the landlady against the landlady herself for a declaration that the sons are in fact the owners of the property in which the shop in dispute is situate. The said suit has been decreed on 25th February, 1986. The case of the petitioner is that once the suit has been decreed, Smt. Kusum Kumari ceased to be the landlady of the shop in dispute and as such, also the application for release is not maintainable. 6. Learned counsel for the respondent no. 3 has however, controverted the allegations made by the petitioner. In view of the subsequent events which have taken place and have been controverted by the respondent no. 3, it would be appropriate that these matters may be considered by the appellate court when the matter is remanded to it. In M/s. Variety Emporium v. V. R. M. Mohd. Ibrahim Naina, AIR 1985 SC 207 , the Hon'ble Supreme Court has held that it is well settled now that in a proceeding for the ejectment of a tenant on the ground of personal requirement under a statute controlling the eviction of tenants unless the statute prescribes to the contrary, the requirement must continue to exist on the date when the proceeding is finally disposed of either in appeal or revision, by the relevant authority.
It has further been held that the tenant is entitled to show that the need or requirement of the landlord no more exists by pointing out the subsequent events to the courts. 7. The principle laid down in the case of M/s. Variety Emporium (supra) applies to the present case. It is in the interest of justice that consequently if it is found that the landlady has alternative business for the purpose of maintaining herself, it may not be necessary to pass eviction decree against the petitioner. The petitioner should, therefore, be permitted to bring to the notice of the appellate court the subsequent events for its consideration. The second submission made by learned counsel for the petitioner is consequently, well- founded. The appellate court, however, shall permit the petitioner to place all the subsequent events by means of a proper affidavit and thereafter, afford proper opportunity to the landlady to controvert the same and then only these facts shall be considered by it. 8. In regard to the last submission made by learned counsel, the argument is that by an agreement dated 6th June, 1959 entered into between he landlady, Smt. Kusum Kumari her husband on the one side and the petitioner on the other side, the business and goodwill of M/s. Swan and Company alongwith furniture, fittings and pharmaceutical goods having been sold to the petitioner, the petitioner was not liable for ejectment from the shop in dispute. The argument is that once by means of this contract, the goodwill of Swan and Company was sold to the petitioner, the premises which housed this business "Swan and Company", was not to be evicted in perpetuity till the business of Swan and Company was carried on. The expression goodwill has not been defined in any Act. Hon'ble Supreme Court had an occasion to consider in detail the meaning to be given to the expression aforesaid. 9. In Ms.
The expression goodwill has not been defined in any Act. Hon'ble Supreme Court had an occasion to consider in detail the meaning to be given to the expression aforesaid. 9. In Ms. S.C. Combatta and Company Private Limited v. Commissioner of Excess Profits Tax, Bombay, AIR 1961 SC 1010 , the definition of the word ' goodwill' in Earl Jowitt's Dictionary of English Law was relied upon by the Supreme Court, which is as follows :- "The goodwill of a business is the benefit which arises from its having been carried on for some time in a particular house, or by a particular person or firm or from the use of a particular trade mark or trade name." and thereafter it was held by the Hon'ble Supreme Court- "It will thus be seen that the goodwill of a business depends upon a variety of circumstances or a combination of them. The Location, the service, the standing of the business, the honesty of those who run it, and the lack of competition and many other factors go individually or together to make up the goodwill, though locality always plays a considerable part. Shift the locality, and the goodwill may be lost. At the same time, locality is not everything. The power to attract custom depends on one or more of the other factors as well. In the case of a theatre or restaurant, what is catered, how the service is run and what the competition is, contribute also to the goodwill." In the Shorter Oxford English Dictionary Volume I, IIIrd Edition, the goodwill has been defined as follows : "The privilege granted by the seller of a business to the purchaser, of trade as his recognised successor, the possession of a ready formed connection of customers, considered as a separate element in the saleable value of a business." Looking to this definition and as well as the law laid down by the Hon'ble Supreme Court, it cannot, possibly be said that by sale of the goodwill, any interest in the property is sought to be transferred. No person can by a mere transfer of goodwill, become a tenant of the property when the property is governed by the provisions of the Rent Control Laws.
No person can by a mere transfer of goodwill, become a tenant of the property when the property is governed by the provisions of the Rent Control Laws. If this be permitted, then it is very easy for a person carrying on business in a particular property to sell his business name in the shape of a goodwill and hand over the property to another person so that the other person becomes the tenant of the property. This cannot be done as under the Rent Control Laws, it is necessary for the purchaser to obtain an allotment of the property and then only he is entitled to stay in the property as a tenant. 10. This question can be looked into with another aspect. If in case where the owner of the building is not the owner of the business and if the owner of the business transfers his goodwill to the third party, can it be said that alongwith the business, the tight in the property will also be transferred. This cannot, possibly, be there. By the mere transfer of goodwill, the question of transferring any right in the property where the business is situate, is not effected by the said transfer. Since no interest in property is transferred, it is not open to a purchaser to say that he is not liable for eviction from the said property in perpetuity. Learned counsel for the petitioner, however, has placed reliance on the dictum of the Hon'ble Supreme Court, wherein it has been held that one of the important factors which constitute goodwill is the locality where the business situate. It is true that this is an important factor for the purpose of goodwill but by the use of the word 'locality', the Hon'ble Supreme Court did not mean to say that the goodwill will necessarily always include the premises where the said business is situate. 11. In the instant case, the sale deed is dated 6th June, 1959. The goodwill of Swan and Company was purchased on certain conditions. The conditions nos. (2), (3) and (4) are relevant for the purpose of decision of the present controversy. " (2). That the vendee shall pay a monthly rent of Rs.
11. In the instant case, the sale deed is dated 6th June, 1959. The goodwill of Swan and Company was purchased on certain conditions. The conditions nos. (2), (3) and (4) are relevant for the purpose of decision of the present controversy. " (2). That the vendee shall pay a monthly rent of Rs. Seventy for the part of the premises 87, K. P. Kakkar Road wherein the said Swan and Company is housed to Smt. Kusum Kumari the owner of the premises from the date of taking possession regularly. (3) That the vendors will deliver to the vendee the Key and possession of the premises aforementioned along with the property mentioned in the schedule on receipt of the consideration money aforementioned. (4) That the Vendee is entitled to seek and get allotment in his favour of the premises which housed Swan and Company from the authorities concerned and the Vendors undertake to extend full cooperation and support to the Vendee in securing the allotment in his favour." From a reading of the aforesaid conditions, it will be apparent that though the goodwill was sold yet it was made clear that the purchaser, namely, the tenant will stay in property at a monthly rent of Rs. 70/-. The period for which the tenancy shall continue, was not stipulated, neither it was said that this tenancy will continue till perpetuity. Condition no. 3 stated as to when the possession of the property will be delivered. Condition no. 4 clearly specified that an allotment has to be obtained in respect of the property from the authorities concerned. From a reading of the agreement itself, it is apparent that in so far as the premises in which the Swan and Company was housed, the purchaser was only given a right to remain as a monthly tenant therein after obtaining an allotment order from the authorities concerned. No further right was given to the tenant. 12. The fact that in the agreement by which the goodwill was sold to the petitioner, it was specifically mentioned that the tenancy of the petitioner shall be monthly and that he has to obtain an allotment order from the authorities concerned shows that the contract of tenancy was to be governed by the Rent Control Law. At the time when this agreement was made, the provisions of U.P. Rent Control and Eviction Act, 1947 were applicable.
At the time when this agreement was made, the provisions of U.P. Rent Control and Eviction Act, 1947 were applicable. This 1947 Act was repealed and the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 came into existence. The property which was governed by the old Act is now governed by this Act. Section 21 is a provision in this Act for release of the accommodation. In the circumstances, it is clear even from the agreement itself that is was not intended that the provisions of section 21 of the Act would be excluded. It cannot, therefore, be said that there was a contract by which the landlady stipulated that the tenant shall never be evicted from the premises in dispute and that the tenant shall be entitled to remain in possession of the premises in perpetuity till the existence of the business Swan and Company. In the circumstances, I do not agree with the submission made by learned counsel for the petitioner that the application under section 21 (1) (a) of the Act was barred by the contract and that the petitioner cannot be evicted from the premises in which the business "Swan and Company" is being run. Now the question is, what is the relevance of this agreement. It will be relevant when considering the question of hardship. 13. In this connection, reference may be made to the provisions of Rule 16 (2) (a) framed under the Act, which reads as follows :- "(2) While considering an application for release under clause (a) of subsection (1) of section 21 in respect of a building let out for the purposes of any business, the Prescribed Authority shall also have regard to such facts as the following- (a) The greater period since when the tenant (opposite party) or the original tenant whose heirs the opposite party is, has been carrying on his business in the building, the less justification for allowing the application." It is under this clause that the question of a tenant having a goodwill and the importance of a locality can be considered by the Prescribed Authority while comparing the hardship in connection with the release application. 14.
14. In Jaswant Singh v. State of U.P., 1977 ALJ 163 = 1976 AWC 785 , Hon'ble K. C. Agarwal, J. opined as follows : "Acquisition of goodwill by a tenant cannot operate as an absolute bar to the maintainability of the application by the landlord. It can only be one of the considerations for deciding the question of comparative need." I respectfully agree with the opinion expressed by Hon'ble K. C. Agarwal, J. in the above case. In the circumstances, when the matter is being reconsidered by the appellate authority, the appellate authority also shall take into consideration the fact that the goodwill had been purchased by the petitioner and as to what effect it would have in case the business is made to shift in another locality. 15. In view of the above, I allow the petition, quash the order dated 30th January, 1982 and remand the case to the appellate authority for decision afresh in accordance with law in the light of the observations made above. Since the matter has been pending since the year 1978, I further direct that the appeal shall be disposed of by the appellate authority very expeditiously. The parties shall bear their own costs. Petition allowed.