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2012 DIGILAW 1804 (MAD)

Mahaveer Button Manufacturing Company represented by Proprietrix Smt. Chandrakantha Mahaveer Button Manufacturing Company v. V. Manoj

2012-04-09

G.RAJASURIA

body2012
Judgment :- 1. Animadverting upon the judgment and decree dated 20.01.2009 passed by the learned VII Judge, Small Causes Court at Madras in R.C.A.No.807 of 2007 in confirming the order and decree dated 24.10.2007 passed by the learned XIII Judge, Small Causes Court at Madras in RCOP No.649 of 1994, this civil revision petition has been focussed by the tenants. 2. The parties, for convenience sake, are referred to here under according to their litigative status and ranking before the Rent Controller. 3. A thumbnail sketch of the relevant facts, absolutely necessary and germane for the disposal of this civil revision petition would run thus: (i). The present landlord-Manoj was represented by his guardian Srinivasan. Subsequently, the guardian minor Manoj attained majority and he started figuring himself as the petitioner/landlord. The said Srinivasan also died. (ii). Pithily and precisely, the case of the petitioner in the Rent Control proceedings is to the effect that the demised premises, which is now being used as a non-residential premises by the tenant, is required for the personal occupation of Manoj, who wants to start his own independent business in wheat and wheat flour products. (iii). The revision petitioner/respondent resisted the petition by filing counter contending that there was no bona fide in seeking eviction of the tenant on the ground of additional accommodation and that the revision petitioner has been doing textile business there. (iv). During enquiry, on the landlord's side, one Venugopal examined himself as PW1 and marked Ex.P1. On the side of the respondent/tenant, one Ukkamchand examined himself as RW1 and marked Exs.R1 to R3. (v). Ultimately, the Rent controller ordered eviction and dismissed the RCOP. (vi). Aggrieved by the order of the Rent Controller, the tenant preferred appeal in RCA.No.807 of 2007 for nothing but to be dismissed by the Appellate Authority confirming the order passed by the Rent Controller. (vii). Challenging and impugning the orders of both the courts below, this revision has been filed by the tenant on various grounds. 4. Heard both sides. 5. The learned counsel for the revision petitioner/tenant, placing reliance on the grounds of revision would pilot his argument, which could pithily and precisely be set out thus: (i) The ingredients of Section 10(3) (a) (iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 were not taken into consideration by both the courts below and they simply ordered eviction. The evidence would speak by itself that the landlord is running a factory in wheat flour products in the city of Madras, wherein the demised premises is situated and as such, he is having no right to seek eviction on the ground of personal occupation. (ii) Irrespective of the contentions raised in the counter by the tenant, the landlord was enjoined to satisfy the ingredients as contemplated under Section 10(3) (a) (iii); but that was not done so. Even then both the courts below simply ordered eviction, warranting interference in this revision. 6. In a bid to torpedo and to make mincemeat of the arguments as put forth and set forth on the side of the revision petitioner/tenant, the learned counsel for the respondent/landlord would advance his argument, the gist and kernel of them would run thus: (a) The counter is as silent as silence could be relating to the pleas, which are sought to be pressed into service by the learned counsel for the tenant in his arguments now. (B) Nowhere it is stated that the said factory is owned by the landlord herein. Indubitably and indisputably the said factory is run by a company, of which the landlord might be a shareholder and that it does not mean that the landlord should not seek eviction of the tenant from the demised premises for his own occupation. (C) The legal personality of the company is different from the personality of the landlord herein. There is nothing to indicate that the revision petitioner is the owner of the premises, in which the said factory is functioning. Both the courts below appreciated the relevant facts with reference to the ingredients as found envisaged in Section 10(3) (a) (iii) of the Act and decided the lis, warranting no interference in this revision. 7. The points for consideration are as under: 1. Whether from the evidence available one could understand that the landlord is owning the premises wherein the said wheat flour factory is being run in the city and if so, whether the landlord being the shareholder of that company could seek for eviction of the tenant from the demised premises herein for running his own business in wheat flour products? 2. Whether there is any perversity or illegality in the orders passed by the courts below? 8. 2. Whether there is any perversity or illegality in the orders passed by the courts below? 8. At the outset itself, I would like to fumigate my mind with Section 10(3) (a) (iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. "10. Eviction of tenants – (1) ............. (2) .............. (3) (a) A landlord may, subject to the provisions of clause (d), apply to the Controller for an order directing the tenant to put the landlord in possession of the building - (i) .............. (ii).............. (iii) in case it is any other non-residential building, if the landlord or [any member of his family] is not occupying for the purposes of a business which he or [any member of his family] is carrying on, a non-residential building in the city, town or village concerned which is own: Provided that a person who becomes a landlord after the commencement of the tenancy by an instrument inter vivos shall not be entitled to apply under this clause before the expiry of three months from the date on which the instrument was registered: Provided further that where a landlord has obtained possession of a building under this clause, he shall not be entitled to apply again under this clause - (i) in case he has obtained possession of a residential building, for possession of another residential building of his own; (ii) in case he has obtained possession of a non-residential building, for possession of another non-residential building of his own." 9. In this connection, the decision of this court, reported in 2000 TLNJ 337 [Central Warehousing Corp.rep.by its Regional Manager vs. Indersain Goyal] cited on the side of the respondent/landlord could also be fruitfully cited and certain excerpts from it would run thus: .............."Once company has been incorporated under the Companies Act, petitioner cannot say that he is doing business or requirement of Company is the requirement of the individual. Both the Rent Controller and appellate authority, who copied the order of Rent Controller did not understand the distinction between Partnership and Company. Both the Rent Controller and appellate authority, who copied the order of Rent Controller did not understand the distinction between Partnership and Company. Lindley on Partnership, 14th Edition, has given the distinction between a Company and Partnership which reads thus: "A corporation is an artificial person created by special authority (by the law of England, by the Crown, or by Parliament) and endowed by that authority with a capacity to acquire rights and incur obligations, as a means to the end for the attainment of which the corporation is created. A corporation, it is true, consists of a number of individuals, but the rights and obligations of these individuals are not the rights and obligations of the artificial person composed of those individual nor are the rights and obligations of the body corporate exercisable by or enforceable against the individual members thereof, either jointly and separately, but only collectively, as one artificial whole. As the civilians neatly express it: Si quid universitati debetur singul is non debetur, nec quod debet universitas singuli debent. (If anything is owed to an entire body, it is not owed to the individual members, nor do the individual members owe what is owed by the entire body). With partnerships the case is otherwise; the members of these do not form a collective whole, distinct form the individuals composing it; nor are they collectively endowed with any capacity of acquiring rights or incurring obligations. The rights and liabilities of a partnership are the rights and liabilities of the partners and are enforceable by and against them individually; Si quid societati debetur singulis debetur et quod debet societas singulidebent/ [If anything is owed to partnership, it is owed to the individual members and the individual members owe what is owed by the partnership). The principal distinctions between a company and an English partnership are as follows: 1. In the case of a partnership the property of the firm belongs to the individual members. They are collectively entitled to it, whereas, in the case of a company, it belongs to the company, and not to the members. 2. The principal distinctions between a company and an English partnership are as follows: 1. In the case of a partnership the property of the firm belongs to the individual members. They are collectively entitled to it, whereas, in the case of a company, it belongs to the company, and not to the members. 2. Creditors of the firm are creditors of the members of the firm, and on obtaining judgment against the firm can levy execution on the property of the partners in the firm, whereas, in the case of a company, "the creditor has no debtor but that impalpable thing, the corporation", and judgment against the company the normally gives no right to levy execution against the members. 3. A member of a firm can on behalf of the firm dispose of property and incur liabilities, within the scope of the business, to any extent (unless this authority is expressly excluded), whereas a member of a company, as such, has no such power. 4. A partner cannot contract with the firm, whereas a member of the company can contract with the company. ............. .................. From the above decisions it is clear that petitioner in RCOP 7 of 1993 cannot say that merely because he happened to be the Director, the Company belongs to him and whatever may be the business of the Company is his business. If it is a case of partnership, the scope is entirely different. When partnership is doing business, each and every partner can say that it is his business. The argument put forwarded before Court of appeal could be seen in page 422 of the reports. The argument was that construing the language of the subsection in accordance with the ordinary meaning of the words used, the landlord here did intend to occupy the holding for the purposes of a business to be carried on by her. The business was in substance her business the company being a mere piece of mechanism to enable the landlord's business to be carried on. This argument was considered by the Court in the concurring judgment of Justice Willmer which reads thus: I have certainly felt the force of the argument on behalf of the landlord; but in the end I am satisfied that it cannot prevail. This argument was considered by the Court in the concurring judgment of Justice Willmer which reads thus: I have certainly felt the force of the argument on behalf of the landlord; but in the end I am satisfied that it cannot prevail. There is no escape form the fact that a company is a legal entity entirely separate form its corporators-see Salomon v. Salomon & Co., (1897 A.C.22). Here the landlord and her company are entirely separate entities. There is no matter of form; it is a matter of substance and reality. Each can sue and be sued in its own right; indeed, there is nothing to prevent the one from suing the other. Even the holder of one hundred percent of the shares in a company does not by such holding become so identified with the company that he or she cn be said to carry on the business of the company. This clearly appears from Gramophone & Typewriter Ltd., v. Stanley (1908) 2 K.B.89), a decision of this Court which seems to me, on due consideration, to be destructive of the argument for the landlord. As was pointed out by Fletcher Moulton, L.J.(1908) 2 K.B.98) control of a company by a corporatar is wholly different in fact and law from carrying on the business himself: .........."the individual corporator does not carry on the business of the corporation". This being so, I do not see how it is possible for the landlord in the present case to assert that she intends to occupy the holding for the purpose of a business to be carried on by her. Her intention, as has been made plain, is that the company which she controls shall carry on its business on the holding. But that, unfortunately for her, is something for which the Act makes no provision". In the concurring judgment of Justice Danckwerts, it is held thus: "A somewhat similar question arose in Pegler v. Craven (1952) 1 All E.R.685) in which Pegler was the tenant but the property was occupied by a company in which Pegler held just under half the share capital and obtained a majority shareholding only with the help of ten shares held by his wife. The decision of the Court of Appeal was adverse in that case, but the position of a company in which all or so great an amount of the share capital was held by one person that company could be said to be the alter ego of that person was left open. If the strict position in company law, exemplified by Salamon v. Salamon & Co. (1897 A.C.22) and Gramophone & Typewriter, Ltd. v. Stanley (1908) 2 K.B.89) be applied, the landlord's contention must fail, for a company is not the same legal entity as the corporators who compose it. It was, however, urged on behalf of the landlrod that regard should be had to realities and to the fact, in particular, that for practical purposes the landlord and the company are the same thing; she owns the company in the fullest sense and in fact will be herself running the business. I feel some sympathy with this contention, for the control of businesses through a limited company has become a commonplace in present-day business life. The interdependence of companies through holding of shares has been recognised for limited purposes by S.42 of the Act, but the fact that the legislature has provided to that extent for company cases can also be an argument against giving a wider construction to S.30(1) (g)." A cumulative reading of the aforesaid provision of law and the precedent cited supra would evince and display that an individual petitioner is different from a company. 10. Here, the above narration of facts, would unambiguously/unequivocally, obviously and pellucidly, in addition to it being axiomatically clear that the said company is not even stated to be under the ownership of the respondent/landlord herein. However, it is an undisputed fact that the respondent is the owner of the demised premises. Simply because, the landlord happens to be a shareholder in the said company, which is running the factory in the Madras city, there is no embargo as per the aforesaid provision of law that he should not seek for eviction of the demised premises for his own business. The demised premises herein is a non-residential one under the occupation of the tenant herein who is carrying on textile business therein. When the legal position is so clear, I need not dilate on it further. 11. The demised premises herein is a non-residential one under the occupation of the tenant herein who is carrying on textile business therein. When the legal position is so clear, I need not dilate on it further. 11. Both the courts below, taking into account the oral and documentary evidence, decided the lis, warranting no interference in revision. 12. Accordingly, this revision is dismissed. However, there shall be no order as to costs. Consequently, the connected miscellaneous petition is closed. 13. On hearing the order, the learned counsel for the revision petitioner would make an extempore submission to the effect that sufficient time may be granted to the revision petitioner for vacating the premises and to hand over vacant possession to the respondent/landlord, for which the learned counsel for the respondent landlord would object on the ground that this litigation for eviction is having a checkered career of its own and it dates back to 1980. 14. Considering the pro et contra, and also the fact that nowadays, it would take sometime for a businessman to find an alternate accommodation for running the textile business, I would like to grant nine months' time from this date for the revision petitioner to vacate and hand over the demised premises to the landlord, subject to payment of arrears of rent, if any and also the subsequent rent regularly till handing over of possession. The petitioner shall file an affidavit to that effect within 15 days from today.