1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN JAIPUR BENCH, JAIPUR J U D G M E N T Kailash Narain Vs. Shah Swaroop Narain S.B. CIVIL SECOND APPEAL NO.333/1995. UNDER SECTION 100 OF THE CPC. DATE OF JUDGMENT: 4th November, 2009 HON'BLE MR.JUSTICE S.P.PATHAK Mr. S.M. Mehta, senior advocate with Mr. Harsh Sharma for the appellant. Mr. K.J. Mehta for the respondent. REPORTABLE BY THE COURT: This second appeal under section 100 of the Code of Civil Procedure has been filed against the judgment and decree dated 5th August, 1995 passed by the Additional District Judge No.7, Jaipur in Civil Regular Appeal No.43/1994 whereby the judgment and decree dated 31st March, 1990 passed by the learned Additional Chief Judicial Magistrate and Civil Judge,Jaipur city No.7 has been upheld and the appeal of the appellant has been dismissed. Briefly stated, the facts are that plaintiff-respondent filed a suit for eviction and determination of standard rent against the defendant-appellant on 20.4.1983. It was, inter-alia, averred in the plaint that the suit property was given on rent @ Rs.175/- per month in November, 1964 and in this regard a 2 rent-deed was also executed in the year 1968. The rent was increased to Rs.200/- per month excluding house tax and thereafter on 1.7.1975 again the rent was enhanced to Rs.225/- per month excluding house tax. In para 2 of the plaint it was averred that the plaintiff, his son and wife are the Directors of the firm M/s Anoop Enterprises Private Limited. The company was incorporated in the year 1969. Initially, the company was indulged in film distribution work. After some time M/s Electric, Construction & Equipment Company Limited appointed M/s Anoop Enterprises Private Limited as its sole distributor and whole-sale distributor for Jaipur, Kota region. In the year 1975 Tisco Industries also appointed M/s Anoop Enterprises Private Limited as sole distributor for Rajasthan and the plaintiff company was also appointed sole distributor of electric goods by Sylvania company and before filing the suit the company of the plaintiff also started whole-sale business of stationary and refrigerated goods etc. It was also averred that since the plaintiff and his son both being Directors of M/s Anoop Industries Private Limited, they are looking after the entire work of the company. As plaintiff company was having its registered office at 17, Gopi Nath Marg on rent @ Rs.300/- per month and subsequently the rented premises was sold by its owner in the year 1980, therefore, the office of the company was shifted in June, 1980 at 11, Civil Lines Scheme in the Bungalow of one Shri S.L. Lakhera on monthly rent of 3 Rs.1,600/- per month and for the working office of the company as a licensee. Shri Roop Narain allowed plaintiff to use premises in Mayur Talkies, Jaipur. Subsequently, the plaintiff had to vacate the premises, therefore, took another premises on rent for two years from one Jagdish Mal Mehta on 1.11.1982 @ Rs.1,500/- per month with the condition to further increase rent @ Rs.1,600/- per month total amounting to Rs.3,200/- per month. A rent-note was also executed by the plaintiff in favour of Jagdish Mal. It was also averred that the plaintiff was finding it difficult to maintain its registered office and working office at different places and the premises on rent of the plaintiff with the defendant would meet his requirement. The need of the plaintiff being bonafide and reasonable as compared to defendant and the plaintiff will suffer great hardship as compared to the defendant in case the premises occupied by the defendant of the plaintiff is not vacated and handed over to him. It was also averred that the cause of action arose in the year 1980 and 1982 when the plaintiff had to run two offices for the company and further in relation to standard rent in the year 1983 when defendant declined to fix standard rent and also committed default in making payment of rent from 1.3.1979 to 1.9.1979. A prayer was made to pass a decree for eviction against the defendant-appellant from suit premises. It was also prayed that standard rent be fixed @ Rs.437.50 from 1.3.1983 excluding house tax and cost be also 4 awarded. The defendant appellant filed written statement stating therein that initially the house premises was on rent @ Rs.175/- per month excluding house tax which was Rs.11/-. In the year 1968 the rent was increased to Rs.200/- per month including house tax. Subsequently, from July 1975 the rent was again increased to Rs.225/- per month and at that time litigation was also pending between the parties. It was also averred that the plaintiff was not in need of the suit premises as he was having sufficient accommodation with him. It was also averred that the disputed premises is on the second floor of the building and the upper part of the disputed building was previously on rent with one Gadodiya and after the premises was vacated, it was further given on rent to Rajasthan Upbhokta Bhandar and on their vacating it was given on rent to Capital Hotel. It was also averred that since the plaintiff was not in need of the house, he let out the premises. It was also averred that the financial condition of the defendant-appellant is not sound and in the event of vacating the suit premises, the entire family of the defendant will come on roads, therefore, comparative hard-ship will be suffered more by the defendant in comparison to the plaintiff. In the additional pleas, it was averred that the suit premises is situated near Ksheer Sagar Hotel and Neel Kamal Hotel and since the rental value near the premises occupied by 5 the defendant-appellant has increased immensely, therefore, the plaintiff under the greed of fetching more rent has filed the suit. A prayer was made to dismiss the suit. The learned trial court framed following issues: (i) Whether the defendant agreed on 1.7.1975 to pay rent @ Rs.225/- per month excluding house tax? (ii) Whether the disputed premises was given on rent for some time in November, 1964 for commercial purpose, therefore, the plaintiff is entitled to enhance the standard rent @ Rs.437.50 per month? (iii) Whether the defendant committed default in making payment of rent for more than six months? (iv) Whether the plaintiff is having personal and bonafide need of the premises for his registered office and working office? (v) Whether decree of ejectment not passed in favour of the plaintiff will cause more hardship as compared to the defendant? (vi) Relief? The plaintiff, in support of its case, examined himself as PW-1 and Ramesh Chand as PW-2 and tendered 18 documents in evidence. On behalf of defendant-appellant four witnesses, namely; Kailash Narain DW-1, Prem Prakash DW-2, Krishna Kumar DW-3 and Hukam Chand DW-4 were examined and no documentary evidence was produced. The statement of Hukam Chand DW-4 could not be completed in spite of opportunity granted to produce him to the defendant. Issue nos.1, 3, 4 and 5 were decided in favour of the plaintiff and issue no.2 was decided partly in favour of the plaintiff and the suit was decreed by the learned trial court vide 6 judgment and decree dated 31.3.1990. The defendant having felt aggrieved preferred a regular appeal. The learned appellate court vide its judgment and decree dated 5.8.1995 upheld the judgment and decree passed by the trial court, dismissed the appeal. Hence, the present second appeal has been filed. Heard Mr. S.M. Mehta, learned senior counsel for the appellant and Mr. K.J. Mehta for the respondent and perused the material available on record. It appears that at the time of admission, this court framed following substantial questions of law: (1) Èया सूट नàबर 232/81 Ǒदनांक 13.7.81 को िनǔण[त होने के उपराÛत वादȣ कȧ ǒववाǑदत पǐरसर कȧ यथा- ǔःथित और सदभावी आवँयकता असित×व मɅ रहȣ थी? (2) Èया वष[ 1979-80 मɅ वादȣ Ʈारा उसके रेिसडेÛसल कम ऑफȧस के ǒवबय के उपराÛत ǒववाǑदत पǐरसर के संबंध मɅ यथोिचत व सदभावी आवँयकता असित×व मɅ रहȣ थी ? (3) Èया वादȣ Ʈारा नये कमरɉ का िनमा[ण करने के उपराÛत तथा उƠ कमरɉ को मैसस[ केǒपटल होटल को वष[ 1988 के बाद Ǒकराये पर देने के कारण वादȣ कȧ यथोिचत व सदभावी आवँयकता असित×व मɅ रहȣ थी? It has been contended by Mr. S.M. Mehta, senior counsel that both the courts below have not properly appreciated the evidence in relation to need of the rented premises and hardship as claimed by the plaintiff-respondent. According to the learned counsel, plaintiff-respondent by their evidence were not able to prove that they were in bonafide need of the rented premises. It has also been contended that 7 M/s Anoop Enterprises Pvt. Ltd. is a separate legal entity, therefore, necessity of M/s Anoop Enterprises Pvt. Ltd. cannot be considered as necessity of the plaintiff-respondent. It has also been contended that the courts below have failed to appreciate this aspect of the matter that during the pendency of the suit plaintiff constructed some rooms on the third floor of the disputed property and same was given on rent to M/s Capital Hotel Pvt. Ltd. It has also been contended that in a suit which was filed by the plaintiff on the basis of bonafide personal necessity against M/s MRF Tyres Company Ltd. in the year 1981 was decided on 13.7.1988 wherein the need of the plaintiff was not considered to be bonafide requirement of the premises which was on rent with M/s MRF Tyre Company Ltd. It is contended that in the year 1979-80 the plaintiff respondent sold the house and shifted to another rented house in Civil Lines and that shows that the plaintiff was never in need of at least the premises which are with defendant- appellant. It is contended that the burden of proving personal necessity lies on the plaintiff and he has completely failed to prove the burden in this regard, therefore, both the courts below have committed illegality in coming to the conclusion that the plaintiff-respondent was in greater need of the house in comparison to defendant appellant. On the other hand, Mr. K.J. Mehta learned counsel has contended that it cannot be disputed that two courts below 8 have come to the conclusion that the plaintiff-respondent has proved his need in relation to suit premises and that finding being of fact is not liable to be interferred. It is also contended that no such pleading was there to suggest that since M/s Anoop Enterprises Pvt. Ltd. being a legal entity, therefore, necessity of the company is to be treated as necessity of the plaintiff. It is also contended that as regards suit which was filed by the plaintiff-respondent against M/s MRF Tyres Ltd. is concerned, that was decided in 1988 and that was in relation to different property which was on the ground floor whereas the present property is not on the ground floor and the facts of the above case were different, therefore, the finding recored in suit no.232/1981 cannot be considered to have any binding effect on the out come of the present matter. It is also contended that against the decision rendered the matter in the year 1985 was challenged before the High Court. In the last, it is contended that since the plaintiff's wife and son are the Directors of the company and the company being private company, the entire money is invested by them, therefore, the business which is being run by the company is the business of the plaintiff and on this technical ground that need of the company cannot be treated as the need of the plaintiff in view of the provisions contained in the Rent Control Act, the plaintiff-respondent cannot be denied to claim the property for the purpose of his business may be in the form of a company. 9 Both the sides have relied upon several decisions rendered by the Hon'ble Apex Court and the Hon'ble High Courts. I have considered the submissions made before me. Before proceeding further, it shall be useful to seek guidance from the principles laid down by the authorities cited before me by both the sides. AUTHORITIES CITED ON BEHALF OF THE APPELLANT: In the case of M/s General Radio & Appliances Co. Ltd. and others Vs. M.A. Khader (dead) by LRs.- AIR 1986 SC 1218, it has been observed that 'the trnasferee-company which has been put in possession of the tenanted premises by the transferor company which was tenant of the premises cannot be deemed to be tenant under the Act on the mere plea that the tenancy right including the leasehold interest in the tenanted premises have come to be transferred and vested in the transferee company on the basis of the order of the High Court on sanctioning the scheme of amalgamation of company made under Ss.391 and 394 of the Companies Act. More over, when clause of the rent agreement executed by the transferor company expressly prohibited subletting of the tenanted premises without the express consent of the landlord, the transfer of the interest of the transferor company including 10 possession in respect of the tenanted premises under the order of the High Court without obtaining the written permission or consent of the landlord could be said to have been transferred to the transferee company in contravention of the provisions of the Act as well as in contravention of the terms and conditions of the said rent agreement thereby making the transferee company liable to be evicted from the tenanted premises. In the case of Amarjit Singh Vs. Smt. Khatoon Quamarain- AIR 1987 SC 741, the Hon'ble Apex Court while interpreting Section 14(1)(c) of the Delhi Rent Control Act observed as under: “We must proceed on the assumption that the landlady needed money to live and the income from her house letting was a source of her income. But the question is, is it a sufficient ground which will bring her out from the second limb of the conditions imposed by section 14(1)(e) of the Act? There is no dispute that subsequent events can be taken into consideration. There is no dispute that administration of justice demands that any changes either in fact or in law must be taken cognizance of by the court but that must be done in a cautious manner of relevant facts.” It has further been observed as under: “The Rent Restricting Acts are beneficial legislations for the protection of the weaker party in the bargains of letting very often. These must be so read that these balance harmoniously the rights of the landlords and the obligations of the tenants. The Rent Restrictions Acts deal with the problem of rack-renting and shortage of accommodation. It is in consonance with the recognition of the right of both the landlord and the tenant that a harmony is sought to be struck whereby the 11 bonafide requirements of the landlords and the tenants in the expanding explosion of need and population and shortage of accommodation are sought to be harmonised and the conditions imposed to evict a tenant are that the landlord must have bonafide need. . That is satisfied in this case. That position is not disputed. The second condition is that landlord should not have in his or her possession any other reasonably suitable accommodation.” In the case of Deena Nath Vs. Pooran Lal- 2001 WLC (SC) Civil 557 the facts were that one vacant shop was available to the landlord at the time of filing suit. Another shop coming in occupation of the landlord during pendency of the suit, therefore, the fact of availablility of reasonable accommodation in occupation of the landlord was not considered and need of the landlord was found not satisfied. In the case of Sri Balaji Krishna Hardware Stores Vs. Srinivasaiah- AIR 1998 SC 994, a suit for eviction was filed by the plaintiff-respondent landlord under the Tamil Nadu Buldings (Lease and Rent Control) Act, 1960 on the ground that non-residential premises is required for the landlord's occupation. The defendant denied the personal necessity of the plaintiff and it was also the stand that during the pendency of the proceeding several other tenanted portions occupied by other tenants fell vacant and the same was given to daughter in law of the landlord and there was no explanation by the plaintiff as to why the shop got vacant was not found suitable for the son for his business, therefore, the Hon'ble Apex Court 12 observed that the need of the landlord was not bonafide and eviction was not liable to be granted. In the case of Vinod Kumar Arora Vs. Smt. Surjit Kaur- AIR 1987 SC 2179, it has been observed by the Apex Court that 'if the finding recorded by the two courts below are based on conjectures and surmises and while doing so they have lost sight of relevant pieces of evidence which have not been controverted, the High Court was justified in rejecting the finding of the Rent Controller and the Appellate Authority. It has also been observed that the landlord was entitled to seek recovery of possession of the leased building for his residential need because the finding of the Rent Controller and the appellate authority about having taken the hall on lease only for running a clinic and that he had not changed the user of the premises have been rendered without reference to the pleadings and without examining the legality of the appellant's contentions in the light of Section 11 of the Act. It has further been observed that the pleadings of the parties are relevant consideration and it is not open to them to give up the case set up in the pleadings and propound a new and different case. In the case of S.J. Ebenezer Vs. Velayudhan and others- (1998)1 SCC 633, the facts were that the tenant resisted the petition for eviction filed against him before the Rent Controller. The stand of the landlord was that the tenant committed default and the rented premises were required for 13 business. The Rent Controller found that the pleadings in the petition were vague and the premises already in possession of the landlord was sufficient and that there was no need to seek eviction of the appellant from the suit premises. On the basis of the pleadings of the parties, necessary issues were framed and after full trial the suit was dismissed holding that no default was committed and there was no bonafide need of the building in question for the occupation of the landlord as the landlord has not faced a situation requiring immediate eviction from the building in his occupation. On appeal before the Appellate Authority, Trivendrum, the same was allowed and eviction was ordered. A statutory revision was preferred to the District Court, Trivendrum and the District Court reversed the judgments of the appellate authority and restored the order of Rent Controller dismissing the petition for eviction. Against the order of of the District Court, the landlord preferred a revision to the High Court which was dismissed on the ground that no second revision lies to the High Court. Thereafter, the landlord preferred a revision under Article 227 of the Constitution of India and the High Court vide its judgment dated 3.10.1991 allowed the revision and up-set the order of the District Court resulting in the order of eviction of the appellant-tenant. Thereafter, the matter was challenged by way of preferring an appeal before the Hon'ble Apex Court. The Hon'ble Apex Court finding that the High Court order will show that it has 14 substituted its view in place of the view taken by the statutory authority which is not within the jurisdiction of the High Court while exercising powers under Article 227 of the Constitution of India. It has been observed that initially the ground on which the application for eviction was presented before the Rent Controller is not available to the landlord as the acquisition initiated in the year 1987 must be deemed to have been either given up or lapsed due to efflux of time. The Hon'ble Apex Court, thus, allowed the appeal and set aside the order and restored the order of Rent Controller. AUTHORITIES CITED ON BEHALF OF PLAINTIFF- RESPONDENT. In the case of Gaya Prasad Vs. Pradeep Srivastava- 2001(2) SCC 604, It has been observed that 'we cannot forget that while considering the bonafides of the need of the landlord the crucial date is the date of petition. In the case of Ramesh Kumar Vs. Kesho Ram- (1992) Supp (2) SCC 623,a two-Judge Bench of Hon'ble Supreme Court (M.N. Venkatachaliah, J., as he then was, and N.M. Kasliwal, J.) pointed out that the normal rule is that rights and obligations of the parties are to be determined as they were when the lis commenced and the only exception is that the court is not precluded from moulding the reliefs appropriately in consideration of subsequent events provided such events had an impact on those rights and obligations. 15 In the case of Kamleshwar Prasad Vs. Pradumanju Agarwal (1997)4 SCC 413, it has been observed that the crucial date normally is the date of filing the petition. In that case, a two-Judge Bench (K. Ramaswamy and G.B. Pattanak, JJ) has held that even the subsequent event of death of the landlord who wanted to start a business in the tenanted premises is not sufficient to dislodge the bonafide need established by him earlier. It has further been observed: “That apart, the fact that the landlord needed the premises in question for starting a business which fact has been found by the appellate authority, in the eye of the law, it must be that on the day of application for eviction which is the crucial date, the tenant incurred the liability of being evicted from the premises. Even if the landlord died during the pendency of the writ petition in the High Court the bonafide need cannot be said to have lapsed as the business in question can be carried on by his widow or any other son.” In our opinion, the subsequent events to overshadow the genuineness of the need must be of such nature and of such a dimension that the need propounded by the petitioning party should have been completely eclipsed by such subsequent events. A three Judge Bench of this Court in Pasupuleti Venkateswarlu V. Motor and General Traders (1975)1 SCC 770 which pointed to the need for re-moulding the reliefs on the strength of subsequent events affecting the cause of action in the field of rent control litigation, forewarned that cognizance of such subsequent events should be taken very cautiously. This is what the learned Judges of the Bench said then: “We affirm the proposition that for making the right or remedy claimed by the party just and 16 meaningful as also legally and factually in accord with the current realities, the court can, and in many cases must, take cautious cognizance of events and developments subsequent to the institution of the proceeding provided the rules of fairness to both sides are scrupulously obeyed.” In the case of Jai Narain Parasrampuria (Dead) and ors. Vs. Pushpa Devi Saraf & ors.- (2006)7 SCC 756, the Hon'ble Apex Court in a matter laid down the principles regarding doctrine of lifting the corporate veil. It has been observed as under: “It is now well settled that the corporate veil can in certain situations be pierced or lifted. The principle behind the doctrine is a changing concept and it is expanding its horizon as was held in State of U.P. Vs.Renusagar Power Co.-AIR 1988 SC 1737. The ratio of the said decision clearly suggests that whenever a corporate entity is abused for an unjust and inequitable purpose, the court would not hesitate to lift the veil and look into the realities so as to identify the persons who are guilty and liable therefore.” It has further been observed as under: “The application of the said doctrine becomes relevant in view of