K. C. Velayudhan v. N V Venkatakrishnan — 1991 DIGILAW 336 (KER)

JUDGMENT K.P. Balanarayana Marar, J. 1. Defendants are the appellants. The suit O. S.223/80 was filed by the respondent for recovery of possession with arrears of rent. Plaint schedule property comprising of an area of 45 cents with the buildings thereon belong to plaintiff. The land together with buildings were taken on lease by the first defendant and K. C. Pazhanimala, father of defendants 2 and 3 as per a registered lease deed dated 23-1-1967. The lease was taken for purpose of running a petrol bunk and to carry on other commercial activities for a period of 12 years. The period ended on 31-12-1978. The lease deed was executed in renewal of earlier lease deed of the year 1950 which itself was a renewal of a deed of 1945. Even in 1945 there were buildings in the property. On the death of Pazhanimala defendants 2 and 3 are in occupation along with the first defendant. A partnership was formed by defendants 1 to 3 under the name and style M/s. K. C. P., K.C.V. and Company. Fourth defendant is that firm. Since the defendants defaulted payment of rent plaintiff had to file a suit as O.S. 11/72. A decree was obtained and the entire decree amount was realised. No rent was paid thereafter. The tenancy was terminated and a petition was filed before the Rent Control Court, Palghat which was dismissed for the reason that it was premature, the term of the lease expiring only on 23-1-1978. A Petition was thereafter filed for eviction on the ground of rent arrears and bona fide need. Defendants claimed to be lessees entitled to fixity of tenure and on that preliminary point the petition was dismissed. That necessitated the suit. 2. In the joint written statement filed by defendants they contended that defendants have permanent right of tenancy, that they put up several, buildings, that these buildings were constructed in connection with the petrol bunk business and that they are entitled to the benefits of S.106 of the Land Reforms Act. 3. The dispute of tenancy was referred to Land Tribunal, Palghat. The Tribunal held that the lease was of land and building and the benefits of S.106 are not available to fee defendants. Accepting that finding the court below decreed the suit Aggrieved by that decision defendants have come up in appeal. 4. Heard counsel on both sides. 5. 3. The dispute of tenancy was referred to Land Tribunal, Palghat. The Tribunal held that the lease was of land and building and the benefits of S.106 are not available to fee defendants. Accepting that finding the court below decreed the suit Aggrieved by that decision defendants have come up in appeal. 4. Heard counsel on both sides. 5. From the contentions raised by the learned counsel for the appellants the following points arise for consideration: i. Whether appellants are entitled to the benefits of S.106 of the Land Reforms Act. ii. Whether they are liable to pay arrears of rent? iii. Whether the suit is bad for non joinder of necessary parties? iv. Whether appellants are entitled to get value of Improvements? v. Whether the notice to quit is proper and valid? 6. Point No. I: The suit was resisted mainly on the plea of tenancy created for an industrial and commercial purpose. According to the appellants the lease is of land for commercial and industrial purpose. Buildings had been put up by them for such purpose, S.106 directly applies and they are not liable to be evicted, argues counsel. S.106 sub clause (1) reads thus: "Notwithstanding anything contained in this Act, or in any other law, or in any contract, or in any order or decree of court, where on any land leased for commercial or industrial purpose, the lessee has constructed buildings for such commercial or industrial purpose before the 20th May, 1967, be shall not be liable to be evicted from such land, but shall be liable to pay rent under the contract of tenancy, and such rent shall be liable to be varied every twelve years." 7. In order to attract the section the lease granted must be of land and that too for commercial or industrial purpose. Only a lessee who has constructed buildings for such commercial or industrial purpose before 20th of May, 1967 cats claim the benefits conferred under that section. Such a lessee is not liable to be evicted from such land but would be liable to pay rent under the contract of tenancy which is liable to be varied every 12 years. In the present case lease was granted for the first time in 1945 in favour of the first defendant. The lease was of land and buildings. It was renewed in 1950. In the present case lease was granted for the first time in 1945 in favour of the first defendant. The lease was of land and buildings. It was renewed in 1950. In 1967 a fresh lease was granted to first defendant and Pazhanimala under Ext A3. Even that lease was of land and buildings. It is pointed out that the total extent of the land is 45 cents and lease is of land though there were some buildings thereon. But Sanction 106 envisages only a lease of land alone and not buildings or land with buildings. Leases of buildings and leases of lands and buildings are expressly excluded from the operation of S.3 of the Land Reforms Act. Under S.3(1)(iii) lease of land specifically granted for industrial or commercial purposes are also excluded under that provision. 8. S.3(1)(iii) of the Land Reforms Act envisages three kinds of leases and they are excluded from the operation of the Act. They are (1) Leases of land (ii) leases of buildings and (iii) leases of land and buildings. But for S.106 of the Act none of the tenants coming within these three categories is entitled to fixity of tenure or any other benefit conferred on tenants by the Act. S.106 is a special provision incorporated in the Act to protect a certain class of tenants who had constructed buildings on the land of another to carry on their trade or business. The persons who had constructed buildings on land leased for commercial or industrial purposes are not liable to be evicted. The protection is intended to be conferred only on that particular class of tenants. In order to claim the benefits of the special provision all the ingredients contained in that provision are to be satisfied. In other words, the lease must be one of land and land alone. A lease of land together with buildings is therefore exempted under S.3(1)(iii) of the Act and does not come within the purview of S.106 of the Act. 9. Learned counsel for the appellants would contend that the buildings contained is the leasehold occupy only a negligible portion of the total area leased and for that reason the lease has to be treated as one of lease of land. 9. Learned counsel for the appellants would contend that the buildings contained is the leasehold occupy only a negligible portion of the total area leased and for that reason the lease has to be treated as one of lease of land. It is further contended that though there were buildings in the property at the time of entrustment the tenant was permitted to construct buildings for commercial purposes and the entrustment has therefore to be taken as one for industrial or commercial purpose True there was some vacant land in the leasehold and the tenant was permitted to put up buildings. But it cannot be said that the buildings included in the lease occupied only a negligible portion. This court had occasion to consider this aspect in the decision reported in 1987 (1) KLT Short Notes 7 S. A. 412/83 - Jacob vs. Joseph. This court held that the operation of S.106 is only in cases where land alone was leased out for commercial or industrial purposes. Leases of buildings and leases of lands and buildings included in the exemption under S.3(1)(iii) of the Act were sot brought within the exemption under S.106 of the Act. It was observed that leases of lands alone satisfying the requirements of S.106 of the Act will come within the purview of that Section for the purpose of enabling the lessee to claim immunity from eviction. 10. On a reading of S.106 it is evident that benefits are intended to be conferred on a particular class of parsons who had spent for construction of buildings for industrial and commercial purpose after obtaining a lease for such purpose. The right conferred under the section is a personal right. By virtue of the explanation introduced by the Amendment Act 35 of 1969 a legal representative of an assignee of the lessee is also included within the definition of a lessee. But the benefits cannot be availed by a sublessee who has constructed buildings for the purpose mentioned in the section. That is an indication to suggest that the benefit was intended to be conferred only on a limited class of persons who satisfy the tests prescribed in the section. What was leased under Ext. A3 is not land alone but land and buildings. That is an indication to suggest that the benefit was intended to be conferred only on a limited class of persons who satisfy the tests prescribed in the section. What was leased under Ext. A3 is not land alone but land and buildings. The benefits of S.106 are therefore not available to the appellants and the lease clearly comes within the exemption contained in S.3(1)(iii) of the Act. The Land Tribunal was therefore right in finding that appellants are not entitled to get the benefits of S.106 of the Act. No interference is called for. 11. Point No. 2: A decree for arrears of rent was not passed in favour of plaintiff since that claim has been discharged. The direction is only to pay future rent till date of recovery or three years whichever is less. This direction is assailed by the learned counsel on the ground that no claim for future rent was made in the plaint. But a claim as such need not be made in a suit for eviction. The landlord can claim the arrears of rent till the date of recovery of possession. But that is limited to a period of three years from the date of the decree by virtue of the provision contained in O.20 R.12 C. P. C. That rule provides that the court may pass a decree directing an enquiry as to real or mesne profits from the Institution of the suit until delivery of possession to the decree holder or the expiration of three years from the date of this decree. The direction of the court below is in accordance with this provision and is not liable to challenge in appeal. 12. Point No. 3: The Union of India is a necessary party, according to the appellants. The premises were taken on lease for conducting a petrol bunk. The lessees were permitted to grant subleases if so required. The properties were subleased to Standard Vacuum Oil Company for making the necessary constructions and fixtures for a petrol tank and petrol delivery pump. The said company was later reconstituted as ESSO and the entire rights of that company were taken over by the Central Government. By virtue of ESSO (Acquisition of Undertakings in India) Act, 1974 (Act IV of 1974) the entire right of the sublessee is alleged to have vested in the Union of India. The said company was later reconstituted as ESSO and the entire rights of that company were taken over by the Central Government. By virtue of ESSO (Acquisition of Undertakings in India) Act, 1974 (Act IV of 1974) the entire right of the sublessee is alleged to have vested in the Union of India. This contention is seen raised in ground (H) of the appeal memorandum. Such a plea is not seen raised in the written statement. The acquisition had come into effect long before the filing of the suit. If really the buildings and other structural had been taken over by the Union of India appellants would have been aware of that fact and a plea of non joinder of Union of India should have been raised in the written statement. There is only a vague plea in the written statement that the suit is bud for non joinder of necessary parties. Who those persons are had not been mentioned. So long as the names of the persons to be impleaded are not furnished by the defendants plaintiff has no burden to implead these persons and it is not open to the defendants to question the maintainability of the suit on that ground. 13. As far as the vesting of the rights of ESSO in the Union of India is concerned it is contended by learned counsel for respondent that only the rights of a lessee vested in the Union of India whereas in this case ESSO can be considered only as a sublessee. Defendants 1 to 4 are the lessees and the claim for eviction can be maintained with them on record. The sublessees are not necessary parties in a suit for eviction. Even if there has been a vesting of the rights of ESSO in the Union of India the suit is therefore not bad for non joinder since the ESSO is only a sublessee holding the buildings under defendants 1 to 4. The plea of non joinder is therefore not sustainable. 14. Point No. 4: Defendant had claimed value of improvements in the written statement. The details of the improvements find a place in the written statement itself. An issue was also framed. The court below has left open that issue. The plea of non joinder is therefore not sustainable. 14. Point No. 4: Defendant had claimed value of improvements in the written statement. The details of the improvements find a place in the written statement itself. An issue was also framed. The court below has left open that issue. It is the contention of the appellants that the value of improvements should have been ascertained before granting the decree and payment of such value is condition precedent before getting recovery of possession. True the value has not been ascertained. But it will not be just and proper to remit the suit for that purpose alone since more than 12 years had elapsed since the date of filing of the suit. The only course open is to direct the executing court to assess the value of improvements before delivery of possession is given to the plaintiff. Such a direction will serve the ends of justice. 15. Point No. 5: If has not been pointed out as to how the notice to quit is improper. An issue on the invalidity of the notice was also not raised. Appellants cannot therefore be permitted to raise that contention for the first time in appeal. For the reasons mentioned above the judgment and decree of the court below are confirmed and the appeal is dismissed. In modification of the finding on issue No.5 it is directed that the value of improvements effected by defendants shall be ascertained in execution and delivery of possession should be given to the plaintiff only on deposit of such value of improvements. Parties are directed to suffer their costs in appeal.