Research › Search › Judgment

Kerala High Court · body

2019 DIGILAW 751 (KER)

Oktopals Sports M. G. Road v. Chandraprakash, S/o. Nandilath Parambil Govindan

2019-09-19

A.HARIPRASAD, T.V.ANILKUMAR

body2019
ORDER : T.V.ANILKUMAR J. 1. Petitioners in revision are the tenants, who suffered concurrent common orders of eviction before the Rent Control Court, Thrissur in R.C.P. Nos.111, 113 and 117 of 2005 as well as the Rent Control Appellate Authority, Thrissur in R.C.A. Nos.67, 68 and 69 of 2017 under Section 11(3) of the Kerala Buildings (Lease and Rent Control) Act, 1965 (for short 'the Act'). The respondents, who claim to be the landlords sought eviction of the tenants under Section 11(2)(b) of the Act also, but it was refused by the Rent Control Court and the order has become final, since the respondents have not filed any appeal challenging the same. 2. The tenants are Partnership Firms dealing in sale of sports equipments occupying tenanted rooms in the first floor of Nandilath Towers, which was formerly called as 'Empire Building'. The Nandilath Building has three floors, of which, a few rooms in the first floor are in the possession of revision petitioners, while rest of the rooms are in the possession of some other tenants and a Partnership Firm alleged to be constituted in the names of respondents and their two children called as 'Nandilath Fridge Centre'. The respondents are husband and wife. They purchased Nandilath towers under Ext.A1 sale deed in the year 2003 from the previous landlords with whom the revision petitioners and other tenants commenced their tenancy. The respondents claim to be conducting in their individual names, a business in sale of electronic home appliances under the name and style 'Nandilath Electronics' at a few places in the State. The 2nd respondent claims that she is conducting 'Nandilath Electronics' in her individual name in 'Marwa Arcade Building' in Thrissur municipal town itself, after having taken a portion of the building on monthly rent. 3. Her case is that, she wants to develop her business and for that purpose, bona fide needs to shift her trade from the rented premises to her own building in the first floor after evicting all the tenants, including the revision petitioners. According to her, respondents are not in possession of any vacant rooms in Nandilath Towers suitable for shifting her business from the tenanted building. The third floor is said to be a godown used by Partnership Firm by name 'Nandilath Fridge Centre'. According to her, respondents are not in possession of any vacant rooms in Nandilath Towers suitable for shifting her business from the tenanted building. The third floor is said to be a godown used by Partnership Firm by name 'Nandilath Fridge Centre'. As regards the ground floor also, a portion is said to be in the possession of Nandilath Fridge Centre Firm and the rest in the custody of a few other tenants. 4. The respondents while admitting their status as tenants contended that there is no landlord and tenant relationship with the respondents notwithstanding their having taken Ext.A1 sale deed in joint names from the previous landlords with whom revision petitioners' tenancy commenced. According to them, Nandilath Towers is a Partnership Firm, which is collecting rent from the tenants occupying the building. The alleged bona fide need of the 2nd respondent was denied by revision petitioners in their counter statement. According to them, the 2nd respondent is not conducting any sort of business in Marwa Arcade and the need set up is only a ruse for eviction. It is also contended that the first floor of Nandilath Towers is not sufficient and suitable for shifting the alleged electronic business of the 2nd respondent from the rented premises. Revision petitioners further contend that they do not have any alternative buildings in the locality to shift their business and further, the members of the Firms are depending for their livelihood on the income derived from the business of the Firms. 5. The Rent Control Court as well as the Rent Control Appellate Authority considered the disputed questions, as to the landlord-tenant relationship between parties, the bona fide need urged by the respondents and also the benefit of the second proviso to Section 11(3) of the Act claimed by the Tenants/ Firms. 6. The Rent Control Court examined the 2nd respondent as PW.1 and admitted Exts.A1 to A23 in evidence. Commission report prepared by CW.1, Advocate Commissioner was marked as Exts.C1 and C1(a) to (c) series. The Managing partner of the tenants/Firms was examined as RW.1. The bank records produced before court were proved through RW.3, the Chief Manager of Catholic Syrian Bank. RW.2 is the photographer, who took Ext.B10 series photographs of Marwa Arcade Building to prove that tenanted rooms of 2nd respondent remained locked during his visits on three occasions. 7. The Managing partner of the tenants/Firms was examined as RW.1. The bank records produced before court were proved through RW.3, the Chief Manager of Catholic Syrian Bank. RW.2 is the photographer, who took Ext.B10 series photographs of Marwa Arcade Building to prove that tenanted rooms of 2nd respondent remained locked during his visits on three occasions. 7. The Rent Control Court found that there was landlord and tenant relationship between the revision petitioners and respondents and the plea that Nandilath Towers Firm is the landlord of the tenanted premises was not proved. The Rent control Appellate Authority also concurred with this finding. As regards the bona fides of the 2nd respondent's need for shifting her alleged business from rented premises also, both courts below concurred and found that the need urged was genuine. Same is the case with the finding as regards the second proviso to Section 11(3) of the Act also and both the courts below found that revision petitioners were not entitled to the benefit of the proviso claimed. 8. We heard counsel appearing on both sides. 9. The finding of the courts below that there is landlord-tenant relationship between the respondents and the revision petitioners is under serious challenge before us. It was argued that though a revisional court cannot re-appreciate evidence and substitute its own conclusion, misreading of evidence has vitiated the findings of the courts below which no Authority could have reasonably arrived at. The specific contention raised by the revision petitioners in their counter statement is that the respondents constituted themselves into a Partnership Firm called “Nandilath Towers Firm” and the Firm alone used to collect rent from the tenants. By virtue of definition of 'landlord' in Section 2(3) of the Act, a person receiving or entitled to receive rent alone could be termed as a 'landlord' for the purpose of instituting the proceedings for eviction under the Act. It is true that there is no document or deed in writing evidencing creation of a Partnership Firm named as “Nandilath Towers”. Law does not, however, insist for execution of any deed or document for constituting a body of persons as a Partnership Firm. The contention of the revision petitioners is that the landlord of the tenanted rooms being a Partnership Firm, respondents could not have initiated the proceedings in their own individual names and sought eviction for any alleged individual need. 10. The contention of the revision petitioners is that the landlord of the tenanted rooms being a Partnership Firm, respondents could not have initiated the proceedings in their own individual names and sought eviction for any alleged individual need. 10. It is true that in case the real landlord is proved to be a Partnership Firm, no eviction otherwise than for the bona fide need of the Firm could be sought by the respondents. The respondents never admit that Nandilath Towers Building is owned by a Partnership Firm. The only Firm in existence, according to them, is 'Nandilath Fridge Centre', constituted by respondents and their two children. 11. The sole evidence which the revision petitioners rely on in support of their contention that the landlord is a Partnership Firm is Ext.B1 rent receipt dated 18.4.2006 issued by the Managing partner of the Firm to one of the tenants, Sri Anil Kumar, who had occupied and later surrendered a room in the first floor. When Ext.B1 receipt was confronted with PW.1, the 2nd respondent, she admitted that the rent receipt was issued by the Managing partner-her husband who is the signatory to the receipt. In the cross examination, she further said that Nandilath Towers is a Partnership Firm and the respondents are the sole members of the Firm. Based on the admission made by PW.1 in the cross examination, the revision petitioners contended that the tenanted premises is the asset of the Partnership Firm and therefore it used to collect rent from the tenants. It is an admitted fact that Sri.Anilkumar was one of the tenants occupying the first floor of Nandilath who later surrendered his room in R.C.P.No.110 of 2005 which had been simultaneously instituted along with the R.C.P. Nos. 111, 113 and 117 of 2005 before Rent Control Court, Thrissur. 12. The question for consideration is whether the admission made by PW.1 in her testimony could operate as evidence proving existence of Partnership Firm empowered to initiate the present eviction proceedings. If Ext.B1 was issued by the Partnership Firm to a tenant in token of acceptance of rent, it necessarily follows from the conduct of the owners that the tenanted premises has already become an immovable asset of the Firm, thereby constituting the Firm as the landlord of the rented rooms. If Ext.B1 was issued by the Partnership Firm to a tenant in token of acceptance of rent, it necessarily follows from the conduct of the owners that the tenanted premises has already become an immovable asset of the Firm, thereby constituting the Firm as the landlord of the rented rooms. It is axiomatic that in order to bring into stock an immovable property as asset of a Firm, execution of a document requiring registration is not necessary. Therefore, if Ext.B1 could prove that the Managing Partner accepted the rent from the tenant, it would impliedly establish that owners of the building conducted themselves in such a manner as to constitute them into a Partnership Firm and also as the landlord of the tenanted premises. 13. The Rent Control court was not prepared to accept the testimony of PW.1 as acknowledging existence of a Partnership Firm. It was noticed that PW.1 in her cross-examination made a mistake that the Firm in which she and her husband were partners, was registered. But this mistake was set right in her re-examination. No attempt is seen made in the re-examination to establish that her admission about existence of Partnership Firm, was either mistaken or erroneous. The Rent Control court relying on Exts.X1 and X2 bank records which are the account opening form and statements of account of Nandilath Towers, said that since bank account stood opened only in the name of the 1st respondent as a proprietor of the concern, none can assume that a Firm was ever created. RW3-the Chief Manager of Catholic Syrian Bank also said that the account was opened only in the individual name of the 1st respondent as a sole proprietor. Ext.A23 series are statements of monthly rent collected by the proprietor of Nandilath Towers for the years 2003-13 from the tenants of Nandilath buildings. The Rent Control Court on the basis of Ext.A23 series statements also said that these documents disproved the existence of a Firm. 14. Though the Rent Control Appellate Authority, Thrissur, concurred with the finding of the Rent Control Court, it found that PW.1's testimony evidenced existence of a Partnership Firm of which respondents were partners. It was found that Ext.B1 was properly proved and rent was collected by the Managing partner of the Firm from one of the tenants occupying first floor of the Nandilath building. It was found that Ext.B1 was properly proved and rent was collected by the Managing partner of the Firm from one of the tenants occupying first floor of the Nandilath building. But it took a different view that PW.1's admission alone is not sufficient to prove existence of a Partnership Firm and even assuming that Nandilath Towers was a Partnership Firm, there was no evidence to prove that the tenanted premises were owned and managed by the Firm as the landlord as defined by the Act. 15. In our view, this finding of the Appellate Authority is not consistent with the evidence on record. Both the courts below misread the evidence and did not fully understand the impact of the evidence given by PW.1 admitting the issue of Ext.B1 receipt signed by the Managing Partner on behalf of the Firm. Ext.B1 is clear to the effect that the Managing partner collected rent from a tenant who later surrendered the premises during the prosecution of the eviction petitions. The conduct of the Managing partner collecting the rent is sufficient to imply that the tenanted premises jointly owned by respondents in their individual names under Ext.A1 sale deed were brought into the stock of the Partnership Firm by their own conduct. Even without registration of document transferring property to a Partnership Firm, an immovable asset could become the property of the Firm as sanctioned by Section 14 of the Partnership Act. Ext.X1 bank account was opened in the name of the 1st respondent in the year 2004, whereas Ext.B1 receipt came to light only much later and in 2006. It is quite possible that the Firm came into existence through the conduct of the respondents in the later years after the bank account was opened in the individual name of the 1st respondent. 16. In our view, neither Exts.X1 and X2 nor Ext.A23 series are capable of explaining or mitigating the unequivocal admission made by PW.1 in her testimony that Partnership Firm existed and the Managing Partner issued Ext.B1 receipt in the name of a tenant. Ext.A23 series are monthly rent collection statements which are not only self serving but also not reliable as they were not got authenticated by any Chartered Accountant. Those statements could be easily fabricated and produced before court at any time. Ext.A23 series are monthly rent collection statements which are not only self serving but also not reliable as they were not got authenticated by any Chartered Accountant. Those statements could be easily fabricated and produced before court at any time. The respondents do not have a case that the admission made by PW.1 that Ext.B1 was issued by the Managing partner of the Firm was by an inadvertent error or mistake. The settled principle of law is that an admission made by a party is the best evidence against him/her unless it is explained or shown to be erroneously made. If the respondents wanted to show that the admission was the result of a mistake, it was naturally possible for them to have produced the statement of assets and liabilities of Nandilath Towers to show that the entire business establishment was being managed by a sole proprietor. In the absence of such relevant documents being brought forth before the Court, the courts below were not justified in ignoring the admission and to hold that Partnership Firm was not the landlord of the tenanted premises. 17. The learned counsel for the respondents submitted that the conduct of the revision petitioners in the previous litigations would bar them from denying the real jural relationship that existed between them and respondents nor could they ever contend that the Nandilath Towers Partnership Firm is not the landlord. It is an admitted fact that the respondents instituted R.C.P.No.16 of 2004 for eviction of revision petitioners before the Rent Control Court, Thrissur, under Section 11(2)(b) of the Act, alleging commission of default of payment of rent since 1.5.2002. The revision petitioners while contesting the case, however, deposited the arrears of rent in the proceedings which resulted in termination of the litigation. This conduct of the revision petitioners is pointed out as amounting to acceptance of respondents a their landlords. But this contention does not appear to hold good because there was no adjudication of relationship between parties in R.C.P.No.16 of 2004 and deposit arrears made by them in court was only under protest. The same is the case with present eviction proceedings also, where the revision petitioners similarly deposited arrears of rent under protest. Therefore the conduct of the revision petitioners could never be taken as amounting to acknowledgement of respondents as their landlords. 18. The same is the case with present eviction proceedings also, where the revision petitioners similarly deposited arrears of rent under protest. Therefore the conduct of the revision petitioners could never be taken as amounting to acknowledgement of respondents as their landlords. 18. We, therefore, find that the concurrent findings of both the courts below that the respondents are the landlords of the tenanted premises are vitiated by illegality and impropriety and cannot be upheld. The evidence on record is sufficient to show that Partnership Firm used to collect rent for the tenanted premises and therefore, the Firm assumed the status of the landlord as defined in Section 2(3) of the Act. Contrary findings of the courts below are set aside. 19. The finding of this Court that Partnership Firm is the real landlord vis-a-vis respondents is sufficient to enter dismissal of the eviction proceedings. In the absence of Firm being in the array of landlord and the Firm itself seeking eviction on bona fide need own occupation, no eviction petition could lie against the revision petitioners under law. Even though this is the correct position of facts and law, we will assume for a moment that the respondents alone are the landlords and consider whether the alleged bona fide need set up by the 2nd respondent was proved by the evidence and further the finding of the courts below in this respect is justifiable. 20. The contention of the 2nd respondent is that she bona fide needs Nandilath Electronic shop being conducted in Marwa Arcade to be shifted to the first floor of the Nandilath Towers, as part of expanding her business. The need was seriously disputed by the revision petitioners and according to them, the need urged is only a ruse for eviction and in fact, the respondents did not at all intend to run any business at all. It was also contended that the 2nd respondent had not taken any part of the Marwa Arcade Building on rent nor did she conduct any trade or business in the said premises. It is further alleged by the revision petitioners that the first floor of Nandilath Towers where the proposed business is sought to be shifted is not suitable or ideal for her business and further she has got other rooms in her possession in the Nandilath Towers itself. 21. It is further alleged by the revision petitioners that the first floor of Nandilath Towers where the proposed business is sought to be shifted is not suitable or ideal for her business and further she has got other rooms in her possession in the Nandilath Towers itself. 21. All these allegations were denied by the 2nd respondent in her evidence as PW.1. Though RW.1 who is the Managing Partner of the Tenants/Firms sought to deny the evidence of PW.1 with respect to her bona fide need, the Rent Control Court relying on Exts.A5 and A20 tax registration certificates held that the 2nd respondent was conducting business in Marwa Arcade Building situated in the same municipal town. The balance sheets kept by her proprietory concern were admitted in evidence as Exts.A6 to A12 and these records also show that she is conducting her trade in electronic home appliances in the building. To prove that premises were taken by her on rent, she relied on Ext.A13 to A16 rent receipts, which also the Rent Control Court accepted as genuine. To add to these evidence, the respondents took out a commission and in Ext.C1 report prepared by CW.1, Advocate Commissioner, he said that the 2nd respondent was conducting business in electronic home appliances and he was personally convinced of the same. Neither CW.1 was cross-examined, nor his Ext.C1 report objected to by the revision petitioners. Ext.B10 series photographs taken by RW.2 Photographer at the instance of revision petitioners were held by the Rent Control Court to be not sufficient to prove that the 2nd respondent's business premises remained closed for want of any trade. No value was attached by the court to the photographs taken depicting the physical features and appearance of the rooms in Marwa Arcade. 22. The Rent Control Court found on the materials before it that the 2nd respondent was conducting the business in rented premises and she bona fide required to shift the business to the first floor of Nandilath Towers. The Rent Control Appellate Authority also re-examined the evidence on record and came to the same conclusion that the 2nd respondent was conducting business in rented premises in the same town and she bona fide required to improve her business and for that purpose, shifting of business to the first floor of Nandilath Towers was necessary, after evicting the tenants. The Rent Control Appellate Authority also re-examined the evidence on record and came to the same conclusion that the 2nd respondent was conducting business in rented premises in the same town and she bona fide required to improve her business and for that purpose, shifting of business to the first floor of Nandilath Towers was necessary, after evicting the tenants. We do not find any reason to interfere with the concurrent findings of the courts below, which according to us, are based on evidence and proper appreciation of facts and circumstances. 23. Even if it is assumed that the 2nd respondent has no business in electronic home appliances in any rented premises as claimed by her also, her intention to start business in the first floor after evicting the tenants in occupation cannot be said to be without bona fides. What she needed to prove under law for an order of eviction under Section 11(3) is that she is in bona fide need of the premises rather than a mere wish to start a business. On going through the evidence on record, there is nothing to suggest that the 2nd respondent lacks genuine intention to start business in the tenanted premises. She is already a partner of Nandilath Fridge Centre along with other partners being her own husband and two children. Existence of this Partnership Firm is not disputed by RW.1, the Managing Partner of the Firms in his oral testimony, even though he had taken a denial in the counter statement. The Advocate Commissioner has also reported that the Nandilath Fridge Centre Partnership Firm is in occupation of reasonably larger area of the first floor of Nandilath Towers and the rooms in the possession of the said Firm were being used for conducting business in electronic goods. In the first floor itself, the Advocate Commissioner has found a room in the occupation of the 1st respondent being used by him, as his office. Similar business is being conducted by Nandilath Fridge Centre Partnership Firm in a portion of the ground floor also. PW.1's evidence shows that she is in possession and control of another room in the ground floor. Similar business is being conducted by Nandilath Fridge Centre Partnership Firm in a portion of the ground floor also. PW.1's evidence shows that she is in possession and control of another room in the ground floor. All these circumstances suggest that the family of the respondents is associated with business in one kind or other and there is no reason to doubt that eviction sought is for any purpose other than the bona fide need of PW.1. The courts below, in our opinion, have on proper appreciation of evidence correctly found that the need of the 2nd respondent was bona fide. 24. It is reported by the Advocate Commissioner that the third floor is a godown in the use of Nandilath Fridge Centre Partnership Firm. In the ground floor, there are no vacant rooms available for the 2nd respondent to shift her business, since all are occupied by tenants, except those portions in the possession of Nandilath Fridge Centre Partnership Firm. It is true that in the first floor, a few tenants in R.C.P. Nos.110, 114, 115 and 116 of 2005 instituted before the same Rent Control Court surrendered their rooms. Therefore, the contention of the revision petitioners is that those surrendered rooms are sufficient to satisfy the alleged requirement of the 2nd respondent and eviction of the revision petitioners Firm from the tenanted premises was quite unwanted. This contention was not accepted by the courts below, since it was upto the landlord to decide the extent of the space required for fulfilling his or her need. It is not for the tenant to dictate terms and point out the convenience or inconvenience of the landlord. We are also of the opinion that, right from the beginning, the idea of the 2nd respondent seeking eviction has been to secure the entire space in the first floor for developing her existing business in Marwa Arcade Building. Therefore, the plea for eviction under Section 11(3) of the Act cannot be denied to the respondents, even if they are assumed to be the landlords of the building. 25. PW.1 has sufficiently explained that the rooms in the ground floor cannot be made use of for shifting her business because it was unworkable and impractical. Therefore, the plea for eviction under Section 11(3) of the Act cannot be denied to the respondents, even if they are assumed to be the landlords of the building. 25. PW.1 has sufficiently explained that the rooms in the ground floor cannot be made use of for shifting her business because it was unworkable and impractical. She wanted to be assisted by her husband, who is occupying an office room in the first floor in connection with day-to-day business activities and this, according to her, could be made possible only if she got the tenanted rooms in the first floor after evicting the tenants. In our view also, the findings rendered by the courts below that respondents proved their bona fide need are proper, sound and justifiable. Therefore, we do not want to interfere with the findings in the above regard. 26. The argument of the revision petitioners focusing on the second proviso to Section 11(3) of the Act was discarded by both the courts below and in our view, the courts acted rightly. There is no evidence to prove that the partners of revision petitioners/ Firms mainly depended on the income from the business. RW.1 the Managing Partner admitted in his evidence that there were vacant rooms available in the locality. Exts.A1 and A20 documents prove that he has vacant buildings of his own. In such circumstances, we fail to understand how the revision petitioners/ Firms could successfully oppose an eviction falling back upon the benefit conferred on tenants by the second proviso to Section 11(3) of the Act. We want to make it clear that notwithstanding our agreeing with the view of the courts below that the respondents have proved the bona fide need and the revision petitioners are not entitled to the benefit of the second proviso to Section 11(3) of the Act, the respondents are not entitled under law to sue for eviction under the Act, since the real landlord of the tenanted rooms is Nandilath Towers Partnership Firm and in the absence of the said Partnership Firm initiating eviction proceedings for its bona fide own occupation, no eviction ought to have been granted by the courts below. In this view of the matter, we set aside the common judgment of eviction dated 05.19.2018 passed by the Rent Control Appellate Authority, Thrissur in R.C.A. Nos. In this view of the matter, we set aside the common judgment of eviction dated 05.19.2018 passed by the Rent Control Appellate Authority, Thrissur in R.C.A. Nos. 67, 68 and 69 of 2017 and dismiss R.C.P. Nos.111, 113 and 117 of 2005 on the files of the Rent Control Court, Thrissur. In the result, the revision petitions are allowed with costs.