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1994 DIGILAW 159 (KAR)

KILLICK INDUSTRIES LTD, BANGALORE v. THIMMAIAH RAMACHANDRAN

1994-06-29

R.V.VASANTHA KUMAR

body1994
., J. ( 1 ) EVEN though the matter is listed for admission by the consent of counsel heard the matter on merits. ( 2 ) THE short question that arises for consideration is whether the trial court was justified in dismissing la. Ii filed by the tenant under order 7, rule ll (d) read with section 151 of Code of Civil Procedure in h. r. c. proceedings initiated by landlord under clauses (h) and (p) of the proviso to sub-section (1) of section 21 of the Karnataka Rent Control Act, 1961 (hereinafter referred to as 'the act' ). ( 3 ) FEW facts for appreciation of the contentions advanced are that M/s. Killick Industries Ltd. , duly registered company under the indian companies act was inducted as a tenant in respect of the petition schedule premises on a monthly rental of Rs. 650a by one thimmaiah ramachandran, terms and conditions of lease being embodied under a registered document. The period of lease was for fifteen years commencing from 1-6-1968, coupled with a renewable clause. The relevant clauses are:1. (a) the lessor shall lease to the lessees the demised premises bearing present municipal no. 33, ulsoor road in the civil station of bangalore-1 more particularly mentioned and described in the schedule hereunder for a period of fifteen years certain, with an option of renewal on ' the part of the lessees for a further period of fifteen years on payment of the same rent, and subject to the same terms and conditions as hereunder provided, commencing from the 1st day of june, 1968 on a monthly rental of Rs. 650/- payable in advance on or before the 10th of each month, the tenancy month being the english calendar month. 111 (g) the lessees shall be entitled to an option for renewal of the lease for a further period of fifteen years from the expiry hereof provided that such option shall be doemed to have been exercised by the lessees if the lessees continue in occupation and use of the demised premises after the expiry of the first term of fifteen years and thereupon the lessees shall continue in the occupation, use and possession of the demised premises for the renewed period of lease of fifteen years on payment of the same monthly rent and upon the same terms and conditions except the term of renewal. (iv) provided always it is hereby agreed between the lessor and lessees as follows: (a) that if and whenever the rent or any part thereof shall be in arrears for three consecutive months or in the event of any breach of covenant or conditions herein contained, on the part of the lessees to be observed and performed, and the lessor serves a notice upon the lessees demanding rent and/or complaining about the breach and the lessees fail to pay the arrears of rent or to remedy the breach complained of by the lessor within one month of the date of receipt of such notice, then and in either of the said cases, the lessor may determine the lease and upon such determination the lessor will be entitled to enter upon the demised premises or any part thereof in the name of the whole without prejudice to any right of action or remedy of the lessor in respect of any antecedent breach of the covenants by the lessees hereinbefore contained and notwithstanding the unexpired portion of the lease or option for renewal as hereinbefore provided. " ( 4 ) THE tenant contends that after the expiry of the period of lease that is after 1-6-1983, company exercised its right of renewal to continue the lease for another period of 15 years, as such term lease is subsisting till 1-6-1998 and by applying the ratio of the full bench decision of this court in Sri ramakrishna theatres ltd. V general investments and commercial corporation ltd. , manipal, that it is not open for the landlord to initiate eviction proceedings under clauses (a) to (p) of proviso to sub-section (1) of section 21 of the act. Further, it is contended that the trial court erred in rejecting its interlocutory application numbered as la. 2 on the ground that the exercise of renewal of the tenant as not being evidenced by a separate registered document. Counsel for the tenant invites this court's attention to the ratio of the decision of the Supreme Court in modern hotel, gudur u k, radhakrishnaiah and others, in support of his contention that there is no forfeiture clause in the deed of lease entered into with his client and as such the petition initiated by the landlord under the provisions of the act as being not maintainable. ( 5 ) IN the instant case, clause (a) of condition iv confers a right to the lessor to determine the lease and as well as right of reentry in cases of breaches of the terms of the lease as enjoined on the lesseesection lll (g) of transfer of property act contemplates determination of the lease by forfeiture. 111 (g) of transfer of property act reads:"by forfeiture that is to say (1) in case the lessee breaks an express condition which provides that on breach thereof, the lessor may re-enter. "as such, the ratio of modern hotel's case, is not applicable to the facts of the case. Ratio of the full bench decision of this court in Sri ramakrishna theaters ltd. 's case, also reiterates the principles declared by the Supreme Court in modern hotel's case at para 28 of its judgment which reads as follows:"it is unnecessary to multiply the citations as we do not find any other decision which is quite relevant to the question raised before us. The meaning attributed to the non-obstante clause in sub-section (1) of section 21 of the act in the case of bharath petroleum corporation ltd. V mohammed haneef choohey is not correct; the overriding effect of the said clause is limited to the effect of the said clause is limited to the subject referred to immediately by the words following. In other words, even if any other law or contract provides for recovery of possession the same shall be of no effect and the eviction can be made only on the grounds stated in clauses (a) to (p) of the proviso. This indicates that the landlord should have a right to recover possession and that right cannot be held to vest in him during the period of the term lease unless there is something in the lease deed which provides for the determination of the lease; in such a situation, even after the determination of the lease in the manner stated in the term lease, the recovery of possession will have to be made only by recourse to section 21 (1 ). " ( 6 ) SRI rego, senior counsel, invites this court's attention to the ratio of the case decided by the Supreme Court in shri lakshmi venkateshwara enterprises v syeda vajhiunnissa, in support of his contention that the provisions of the rent control act would apply notwithstanding the contract and further he invites the ratio of cases decided by The Supreme Court in V. Dhanpal Chettiar v Yesodai Ammal and dominion of India v shrinbai a. Irani, to the effect that the restricted area under various state rent acts has done away to a large extent the requirement of the law of the contract and the transfer of property act and as such termination of contractual lease would be mere formality, unnecessary, illogical and unjustifiable and that contractual tenancy would lose its significance in view of the rent control act. Counsel for the respondent further urged that the landlord could found an action on any one of the enumerated grounds under section 21 of the act and that action would be maintainable notwithstanding the existence of contractual lease. ( 7 ) IT is to be stated that the Supreme Court in shri lakshmi venkateshwara's case, taking note of the ratio of the full bench judgment of this court observed that the statement of full bench will have no application to the facts and circumstances of that case. Having regard to the arguments advanced, the only question that arises for consideration is whether during subsistence of a contractual tenancy, it is open to the landlord to resort to proceeding under the rent control act. In the instant case, as stated earlier, there is forfeiture clause in the deed of lease entered into between the parties on record. As such ratios of the decisions of the cases relied upon by the petitioner's (tenant) counsel reported in modern hotel, gudur and Sri ramakrishna theaters ltd. Cases, are not applicable to the facts of this case. Sri k. Balakrishna with his characteristic style of fairness in his submissions contends that in cases of term lease, even if there is a forfeiture clause, right to possession arises only in the event of breach of terms of lease and in the absence of any breach landlord gets no right to initiate any action for ejectment since contractual term tenancy subsists. He also contends that the ratio laid down by the Supreme Court in V. Dhanpal Chettiar's Case must be understood to have declared law to the effect that notice of determination of tenancy as being not a pre-requisite before initiation of action for ejectment under the provisions of the act only in cases of breaches of the terms of the lease as entered into by contracting parties, and in the absence of averments regarding breach of terms of lease no right would enure to the landlord to seek ejectment. It is to be noted that the full bench of this court in Sri ramakrishna theaters ltd. 's case, placing reliance on the decision rendered by the Supreme Court in modern hotel's case, has discussed in detail the very contentions advanced by the tenant. It is to be stated that ratios of cases reported in (1) AIR 1961 mys. 131 (2) AIR 1963 h. p. 49 (3) AIR 1984 cal. 153 (4) bharat petroleum corporation ltd. V mohammed haneef choohey (overruled by f. b.) relied upon by tenants counsel are not of much assistance in the light of the full bench decision of this court. It is to be understood that in cases of term lease, if there is forfeiture clause in the deed of lease, then it is open for the landlord without even determining the tenancy to approach the forum constituted under the Karnataka rent control act to seek ejectment under the provisions enumerated under the rent control act. ( 8 ) REGARDING another contention advanced by the tenant, it is to be stated that the approach of the trial court regarding the renewal clause to be evidenced by registered document is fallacious. Renewal is a covenant running along with the land. Clause regarding renewal in the deed in question do not stipulate any condition precedent to the exercise of option except continuing possession and observing the terms and conditions stipulated in the lease deed entered upon. The exercise of option has to be inferred by tenant continuing possession and payment of rent, and in the absence of new relationship to be entered into between the parties, it could not be said that there is implied surrender and further where covenant for renewal exists, its exercise is, of course, a unilateral act of the lessee and the consent of the lessor is unnecessary. As such, the findings of the trial court on the aspect of renewal to be evidenced by a registered document do not stand to reason. However, in the light of the observations made above, it is to be stated that rejection of la. Filed by the tenant under order vii, rule 11 of cpc, is proper. Hence, the impugned order is confirmed. Subject to the observations made above, this civil revision petition is dismissed. No costs. --- *** --- .