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Himachal Pradesh High Court · body

2008 DIGILAW 602 (HP)

Akshay Sood v. Santosh Sharma

2008-12-16

RAJIV SHARMA

body2008
JUDGMENT (Rajiv Sharma, J.) - This Regular Second Appeal has been directed against the judgment and decree dated 1.6.1998 passed by the learned District Judge, Shimla in Civil Appeal No. 18-S/13 of 1996. 2.Brief facts necessary for the adjudication of this Regular Second Appeal are that the appellants-plaintiffs (hereinafter referred to as ‘the plaintiffs’ for convenience sake) filed a suit for possession of shop situated in Khasra No. 416/415/375/5 measuring 2 Biswas in Mauza Gawahee, Pargana, Gawalathi, Tehsil Theog, District Shimla, H.P. from the predecessor-in-interest of the respondents-defendants (hereinafter referred to as ‘the defendant’ for convenience sake). The shop was rented to defendant Sh. Om Prakash. He was doing the business of Halwai in the shop. The premises were required bonafidely by the plaintiffs for doing their own business. The plaintiffs had issued a notice to the defendant terminating the tenancy on 13.5.1991. He did not vacate the shop despite notice and he was thus according to the plaintiffs was in illegal possession. The plaintiffs have claimed Rs. 240/- as use and occupation charges from 3.5.1991 to 23.9.1992. The defendant contested the suit and inter alia averred that the tenancy was created 35 years back and the notice issued is invalid. He has further contended that the notice did not terminate the tenancy and according to him, the tenancy was permanent and irrevocable. The plaintiffs filed the replication to the written statement filed by the defendant. The trial Court on the basis of the evidence led by the parties decreed the suit. The defendant feeling aggrieved by the judgment and decree passed by the trial Court preferred an appeal before the learned District Judge, Shimla. The learned District Judge, Shimla accepted the appeal on 1.6.1998. This Regular Second Appeal has been directed against the judgment and decree dated 1.6.1998. This Regular Second Appeal was admitted on the following substntial questions of law framed with the memorandum of appeal : 1. “Whether in the facts and circumstances of the case District Judge was right in holding that the shop occupied by the defendant amounted to a lease for manufacturing purpose determined by a notice of six months only being a yearly tenancy “ 2. Whether on the material on record and the construction of the pleadings, the defendant/respondent was a tenant on month to month basis and the notice served by Sh. Whether on the material on record and the construction of the pleadings, the defendant/respondent was a tenant on month to month basis and the notice served by Sh. Akshay Kumar as Manager of the property on behalf of all the co-owners validly determined the tenancy ? 3. Whether the oral and documentary evidence has been misconstrued and wrong inferences drawn from facts proved on record by the District Judge which has vitiated the findings?” 3.Mr. K.D. Sood, Advocate has strenuously argued that the judgment and decree passed by the learned District Judge is contrary to law and he has prayed for the restoration of the judgment and decree passed by the trial Court. He has also contended that the learned first appellate Court has wrongly recorded a finding that the business of Halwai involves a manufacturing process. His precise submission is that in the business of Halwai, no manufacturing process is undertaken and notice of only 30 days was sufficient. He lastly contended that the tenancy was on monthly basis and had expired by afflux of time. 4.Mr. G.D. Verma, Senior Advocate has argued that his client was carrying manufacturing process while preparing the sweets and thus notice of six months was required under Section 106 of the Transfer of Property Act, 1882. He also contended that from the language of the notice, it is clear that the tenancy has not been terminated. He lastly contended that since his client was in possession as tenant for more than 35 years, it was not required to be registered since the provisions of Sections 54, 107 and 123 of the Transfer of Property Act, 1882 had been made applicable to the State of Himachal Pradesh with effect from 6.1.1971. 5.I have heard the learned Counsel for the parties and perused the record carefully. Substantial Question of Law No. 1: 6.Mr. K.D. Sood, Advocate submitted that the learned District Judge has come to a wrong conclusion that preparation of sweets involves manufacturing process under Section 106 of the Transfer of Property Act, 1882. He also submitted that the learned first appellate Court has relied upon Brohmananda Das v. Nagendra Chandra Sarkar, AIR 1954 Calcutta 224 while coming to the conclusion that the defendant was involved in manufacturing process while preparing the sweets. He also submitted that the learned first appellate Court has relied upon Brohmananda Das v. Nagendra Chandra Sarkar, AIR 1954 Calcutta 224 while coming to the conclusion that the defendant was involved in manufacturing process while preparing the sweets. According to him, the learned Single Judge of the Calcutta High Court has categorically laid down that the preparation of sweets for sale would not answer the test of manufacturing for the purpose of Section 106 of the Transfer of Property Act, 1882. There is sufficient force in the submission of Mr. K.D. Sood. The learned first appellate Court has failed to take into consideration the ratio decesendi of this case. The learned first appellate Court has also relied upon Gangaram Raghunandan Bhaiya v. Patel Motibhai Ramdas, AIR 1981 NOC 86 (Gujarat). The NOCs cannot be cited as precedent since the complete facts are not narrated in the NOCs. 7.Their Lordships of the Hon’ble Supreme Court in Allenbury Engineers Private Limited v. Ramkrishna Dalmia and others, 1973(1) SCC 7 have held that the expression ‘manufacturing purposes’ is used in its popular and dictionary meaning and the burden of proving that the lease was for manufacturing purposes must lie on the party who claims it be so. Their Lordships have further held that expression ‘manufacturing purposes’ in Section 106 of the Transfer of Property Act, 1882 means purposes for making or fabricating articles or materials by physical labour or skill or by mechanical power, vendible and useful as such. Such making or fabricating does not merely manner a change in an already existing article or material but transforming it into a different article or material having a distinct main, character or use of fabricating a previous known article by a novel process. Their Lordships have held as under :- “In these circumstances, two questions were sought to be raised by Mr. Chagla. The first was that there being no dispute between the parties that the relationship between them was that of landlord and tenant and the respondents having accepted all along the said rent of Rs. 1800/- a month, the Court must proceed upon the basis that the occupation of the premises by the appellant-Company was in its capacity as a tenant. The first was that there being no dispute between the parties that the relationship between them was that of landlord and tenant and the respondents having accepted all along the said rent of Rs. 1800/- a month, the Court must proceed upon the basis that the occupation of the premises by the appellant-Company was in its capacity as a tenant. According to him, if the appellant-Company can establish that tenancy was for manufacturing purposes, the presumption laid down in Section 106 of the Transfer of Property Act, under which such tenancy has to be regarded as a tenancy from year to year terminable by a six months’ notice and not by a month’s notice, must apply. It is true, said he, that under Section 107 of the Act a lease from year to year can be made only by a registered instrument, but that provision in no way controls the presumption laid down in Section 106 under which once it is proved that the parties were in the position of a landlord and a tenant and the tenancy was for manufacturing purposes, it has to be presumed to be one from year to year. According to him, the two sections are independent of each other, the one dealing with the user and noticed, and the presumption arising from such user, and the other dealing with compulsory registration for a lease from year to year, or for a term exceeding one year. Mr. Tarkunde, appearing for the Corporation, on the other hand, disputed the construction of these two sections suggested by Mr. Chagla. The second question raised by Mr. Chagla was that in any event the lease was for manufacturing purposes, and therefore, the said notice was not valid. Assuming that Mr. Chagla is right in the interpretation of Sections 106 and 107 suggested by him, even then the appellant-Company has first to establish that the lease in its favour was for manufacturing purposes and it is then only that it can take advantage of the rule of presumption laid down in Section 106. The expression ‘manufacturing purposes’ in Section 106 is used in its popular and dictionary meaning, the Transfer of Property Act not having supplied any dictionary of its own for that expression. The expression ‘manufacturing purposes’ in Section 106 is used in its popular and dictionary meaning, the Transfer of Property Act not having supplied any dictionary of its own for that expression. The burden of proving that the lease was for manufacturing purposes, must for the purposes of Section 106 of the Transfer of Property Act, lie on the party who claims it to be so, in the present case the appellant-Company. That burden is to establish that the exclusive or at least the dominant purposes of the lease was the manufacturing purpose. (See C. Mackertich v. Steuart and Co. Ltd., AIR 1970 SC 839).” 8.Their Lordships of the Hon’ble Supreme Court in P.C. Cheriyan v. Mst. Barfi Devi, 1980(2) SCC 461 have held that lease for carrying on business of retreading of tyres is not lease for manufacturing purposes and hence six month’s notice was not required. Their Lordships have further held that the expression ‘manufacturing purposes’ has not been defined in the Transfer of Property Act and, therefore, it has to be construed in its popular sense. Their Lordships have further held that there must be a transformation, a new and different article must emerge, having a distinctive character or use. Their Lordships have held as under :- “The expression “manufacturing purposes” has not been defined in the Transfer of Property Act. It has therefore, to be construed in its popular sense. According to the Permanent Edition of Words and Phrases, Vol. 26, `manufacture’ implies a change but every change is not manufacture and yet every change in an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation, a new and different article must emerge having a distinctive name, character or use. This construction of the expression “Manufacture” received the imprimaturs of this Court in South Bihar Sugar Mills v. Union of India, 1968(3) SCR 21. But the case directly in point is Allenbury Engineers Ltd. v. Ramkrishna Dalamia, ibid, wherein the question for consideration before this Court was whether the lease in favour of Allenbury Engineers was for “manufacturing purposes” within the meaning of Section 106, Transfer of Property Act. But the case directly in point is Allenbury Engineers Ltd. v. Ramkrishna Dalamia, ibid, wherein the question for consideration before this Court was whether the lease in favour of Allenbury Engineers was for “manufacturing purposes” within the meaning of Section 106, Transfer of Property Act. On the facts of that case, answering the question in the negative, this Court held that even though the lessees were manufacturing some spare parts for repairing or reconditioning vehicles, yet the dominant purpose of the lease was one of the storage and resale of the vehicles after repairing and reconditioning them, and that manufacturing of spare parts was merely incidental to the main purpose of repairing or reconditioning the vehicles for disposal. Since the instant case is covered by the ratio of Allenbury Engineers, it is not necessary to discuss all the cases cited by Mr. Khadar, Nevertheless, it will be proper to notice briefly one case namely, Federal Commr. of Taxation v. Jack Zinader Proprietary Ltd. ibid., on which the counsel has staked a good deal in his agreements.” 9.Their Lordships of the Hon’ble Supreme Court in Idandas v. Anant Ramchandra Phadke (dead) by LRs., AIR 1982 SC 127 have laid down the following tests to determine whether the lease granted is for manufacturing purposes or not : “Coming now to the tests laid down by this Court the position may be summarised as follows :- 1. That it must be proved that a certain commodity was produced; 2. That the process of production must involve either labour or machinery; 3. That the end product which comes into existence after the manufacturing process is complete, should have a different name and should be put to a different use. In other words, the commodity should be so transformed so as to lose its original character.” 10.In view of the tests laid down by their Lordships of the Hon’ble Supreme Court in AIR 1982 SC 127 (supra), heavy burden lies upon the tenant to establish that the lease was for manufacturing purposes. In the present case, the tenant has failed to establish that the business of ‘Halwai’ in which he was engaged involves any manufacturing process as per the idicas laid down by their Lordships of the Hon’ble Supreme Court. In the present case, the tenant has failed to establish that the business of ‘Halwai’ in which he was engaged involves any manufacturing process as per the idicas laid down by their Lordships of the Hon’ble Supreme Court. The finding recorded by the learned first appellate Court that the business of Halwai involves manufacturing process is contrary to the evidence placed on record by the parties. 11.In the absence of their being any manufacturing process involved in the business of Halwai it cannot be presumed that the lease existed from year to year. In the present case since there was no manufacturing process involved, the notice of 30 days was sufficient. Substantial Question No. 2: 12.Mr. K.D. Sood has vehemently argued that Mr. Akshay Sood was managing the property on behalf of other co-owners after the death of his father and the notice issued by him Ex.P-2 was in conformity with law. Mr. G.D. Verma has argued that the notice was required to be issue on behalf of all the co-owners of the property. This question has been gone into by a Division Bench of Allahabad High Court in Fateh Chand and another v. Brij Bhushan Prakash and another, AIR 1957 Allahabad 801. The Division Bench has held that where the two sons had served a notice of ejectment they must be deemed to have done so on behalf of the entire family, including their mother. Their Lordships have further held that the notice of ejectment cannot, therefore, be held to be invalid simply because the mother did not join in signing it. Their Lordships have held as under : “There thus appears to be a consensus of opinion on the point that the joint status of the family is not disrupted simply because the widow of a deceased co-parcener gets an interest in the joint family property in respect of which she can claim petition. If the joint status of the family continues, the karta of the family must be held to be entitled to continue managing the affairs of the family and to represent the entire family including the widow in all affairs. Whatever the karta does in the interest of the family must be held to have been done on behalf of all the members including the widow. Whatever the karta does in the interest of the family must be held to have been done on behalf of all the members including the widow. That being the legal position, when the two sons of Lata Devi Prasad in the present case, who were admittedly managing the affairs of the family, served a notice of ejectment on the defendants they must be deemed to have done so on behalf of the entire family including their mother. The notice of ejectment cannot, therefore, be held to be invalid simply because the mother did not join in signing it. The only ground on which the notice of ejectment is challenged thus becomes untenable, and if the notice of ejectment was good and valid, the suit for ejectment must be held to have been rightly decreed.” 13.Their Lordships of the Hon’ble Supreme Court in Sri Ram Pasricha v. Jagannath and others, AIR 1976 SC 2335 while dealing with the West Bengal Premises Tenancy Act have held that co-owner landlord is an ‘owner’ and suit by such landlord on ground of reasonable requirement of members of the family was maintainable. Their Lordships have held as under :- “Mr. Tarkunde also submitted that since the Calcutta High Court has held in Yogamaya Pakhira v. Santi Sudha Bose, ILR 1968(2) Cal 70 that a permanent lessee is not an owner within the meaning of Section 13(1)(f) a co-owner would not be in a better position. We are of opinion that a co-owner is as much an owner of the entire property as any sole owner of a property is. We, however, express no opinion about the case of a permanent lessee as this point does not arise in this appeal.” 14.Similarly, their Lordships of the Hon’ble Supreme Court in Smt. Kanta Goel v. B.P. Pathak and others, AIR 1977 SC 1599 while dealing with the expression ‘landlord’ and ‘tenant’ have held that one co-heir of deceased landlord can sue for eviction in absence of other co-heirs, who have no objection. Their Lordships have held as under :- “Nor do we set much store by the submission that the Ist respondent is not a landlord, being only a co-heir and the will in his favour having been disputed. Equally without force in our view is the plea that one co-lessor cannot sue for eviction even if the other co-lessors have no objection. Equally without force in our view is the plea that one co-lessor cannot sue for eviction even if the other co-lessors have no objection. Section 2(e) of the Act defines `landlord’ thus : “2(e) `Landlord’ means a person who, for the time being is receiving, or is entitled to receive, the rent of any premises, whether on his own account or on account of or on behalf of, or for the benefit of, any other person or as a trustee, guardian or receiver for any other person or who would so receive the rent or be entitled to receive the rent, if the premises were let to a tenant.” “`Tenant’, by definition (Section 2(1)) means any person by whom or on whose account or behalf the rent of any premises is payable. Read in the context of the Rent Control Law, the simple sense of the situation is that there should be a building which is let. There must be a landlord who collects rent and a tenant who pays it to the one whom he recognizes as landlord. The complications of estoppel or even the concepts of the Transfer of Property Act need not necessarily or inflexibly be imported into the proceedings under the rent control law, tried by special Tribunals under a special statute. In this case, rent was being paid to the late Dass who had let out to the appellant, on the death of the former, the rent was being paid to the 1st respondent who signed the receipts in his name and added that it was on behalf of the estate of the deceased Dass. At a late stage the rent was being paid to and the receipts issued by the 1st respondent in his own name. Not that the little change made in the later receipts makes much of a difference, but the fact remains that the tenant in this case had been paying the rent to the 1st respondent. Therefore, the latter fell within the definition of `landlord’, for the purposes of the Act. We are not impressed with the investigation into the law of real property and estoppel between landlord and tenant, Shri Nariman invited us to make. A fair understanding of the relationship between the parties leaves little room for doubt that the appellant was the tenant of the premises. We are not impressed with the investigation into the law of real property and estoppel between landlord and tenant, Shri Nariman invited us to make. A fair understanding of the relationship between the parties leaves little room for doubt that the appellant was the tenant of the premises. The 1st respondent, together with the other respondents, constituted the body of landlords and, by consent, implicit or otherwise, of the plurality of landlords one of them representing them all, was collecting rent. In short, he functioned, for all practical purposes as the landlord, and was therefore entitled to institute proceedings qua landlord. This Court, in Sri Ram Pasricha, (1976(4) SCC 184) : (AIR 1976 SC 2335) clarified that a co-owner is as much an owner of the entire property as any sole owner of the property is : “Jurisprudentially, it is not correct to say that a co-owner of property is not its owner. He owns every part of the composite property along with others and it cannot be said that he is only a part owner or a fractional owner of the property...... It is, therefore, not possible to accept the submission that the plaintiff who is admittedly the landlord and co-owner of the premises, is not the owner of the premises within the meaning of Section 13(1)(f). It is not necessary to establish that the plaintiff is the only owner of the property for the purpose of Section 13(1)(f) as long as he is a co-owner of the property, being at the same time acknowledged landlord of the defendants.” That case also was one for eviction under the rent control law of Bengal. The law having been thus put beyond doubt, the contention that the absence of the other co-owners on records disentitled the first respondent from suing for eviction, fails. We are not called upon to consider the piquant situation that might arise if some of the co-owners wanted the tenant to continue contrary to the relief claimed by the evicting co-owner.” 15.In the present case it has come in the evidence that Sh. Akshay Sood had been running the affairs of the family business and the notice by him i.e. Ex.P-2 is in accordance with law. The notice was not be signed by other co-owners of the property. The fact that Smt. Rameshwari Devi had received the rent amounting to Rs. Akshay Sood had been running the affairs of the family business and the notice by him i.e. Ex.P-2 is in accordance with law. The notice was not be signed by other co-owners of the property. The fact that Smt. Rameshwari Devi had received the rent amounting to Rs. 720/- in the year 1998 will not render the notice Ex.P-2 issued to the defendant invalid in view of the ratio laid down by the Hon’ble Supreme Court and Allahabad High Court. The submission of Mr. G.D. Verma, Senior Advocate that the notice did not terminate the tenancy, cannot be accepted in view of the contents of the notice. The defendant has been requested to vacate the shop as early as possible within 30 days from receipt of the notice and handover the vacant possession to him so as to enable him to change the structure of the shop. The words contained in para 6 of the notice in fact clearly indicates that the termination of the tenancy was stipulated therein. 16.In view of the observations made hereinabove, the Regular Second Appeal is allowed. The judgment and decree passed by the learned first appellate Court is set aside. The judgment and decree passed by the learned trial Court is restored. There will, however, be no order as to costs. M.R.B. ———————