IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated :17-06-2011 CORAM THE HONOURABLE MR.JUSTICE R.S.RAMANATHAN S.A.No.2083 of 2001 P.S.Subramanian : Appellant/Defendant vs. 1.Tmt.Mahalakshmi Ammal 2.T.Yuvaraj : Plaintiffs/Respondents [R2 impleaded as per order made in CMP No.3480/03, dated 15.09.2005] Prayer: This second appeal is filed under section 100 of the Civil Procedure Code, against the judgment and decree dated 16.09.2001 made in A.S.No.8 of 2000 on the file of the Subordinate Judge, Poonthamallee, confirming the judgment and decree, dated 13.12.1999 made in O.S.No.1703 of 1991 on the file of the District Munsif, Poonthamallee. For Appellant : Mr.M.Venkatachalapathy Senior Counsel for M.Sriram For 1st Respondent : Mr.T.P.Sankaran For 2nd Respondent : No Appearance JUDGMENT The unsuccessful defendant is the appellant. 2.The 1st respondent/plaintiff filed a suit for recovery of possession, arrears of rent and for future damages. 3.The case of the 1st respondent/plaintiff was that the property belongs to the respondents and it is a vacant site and the appellant/defendant was introduced as a tenant on 14.03.1975 and the appellant/defendant has taken the property on lease for running a timber shop for a monthly rent of Rs.125/- and the lease is for a period of 5 years i.e. from 14.03.1975 to 14.03.1980. The lease was renewed for a further period of 5 years and on 14.03.1985, the lease https://hcservices.ecourts.gov.in/hcservices/ was further renewed on a monthly rent of Rs.500/- and the appellant/defendant was paying the rent upto to 30.05.1991. The respondents/plaintiffs required the premises for his own use and occupation and therefore, issued a notice, dated 12.06.1991 calling upon the appellant to vacate and hand over the possession by the end of 13.07.1991 and the appellant/defendant sent a reply stating that he has constructed a pucca shop by spending more than 5 lakhs and he is entitled to the benefits of Tamil Nadu City Tenants Protection Act and the notice, dated 12.06.1991 was not valid. A rejoinder was also given by the respondents/plaintiffs and as the appellant/defendant refused to vacate the suit premises, the suit was filed for the relief stated above. 4.The appellant/defendant contested the suit admitting the tenancy and contended that originally the property was taken on lease for the purpose of doing business for timber and saw-mill and the property that was let out to him was a vacant land and the appellant/defendant spent huge amount for improving the land and he has constructed a shop in the entire area and he spent more than 5 lakhs for putting up construction and after taking into the property on lease, he installed a saw-mill and he is carrying on manufacturing process in the premises and therefore, the notice issued was not proper and he is also entitled to the benefits of Tamil Nadu City Tenant Protection Act. 5.In the trial Court, an Advocate Commissioner was appointed and he has also filed a report about the construction. 6.The trial Court framed the following issues:- 01.Whether the plaintiff is entitled to the relief of recovery of possession, after removing the superstructure put up by the defendant? 02.Whether the plaintiff is entitled to pay rent at the rate of Rs.1,000/- from 14.05.1991 to 13.07.1991? 03.Whether the plaintiff is entitled to damages at the rate of Rs.910/- from 14.01.1991 till the date of filing? 04.Whether the plaintiff is entitled to future damages at the rate of Rs.500/- till delivery of possession by the defendant? 7.The trial Court held that the appellant/defendant did not let in any evidence to prove the expenses incurred by him for putting up a shed and he has also not produced any proof for the payment of rent. After notice was issued by the 1st respondent/plaintiff, no proof was adduced by the appellant/defendant that manufacturing https://hcservices.ecourts.gov.in/hcservices/ process is being carried on in the premises and answered the issues in favour of the plaintiff and decreed the suit. 8.The Lower Appellate Court also concurred with the findings of the trial Court and also held that no manufacturing process is being carried on in the premises and the notice issued was proper and the appellant/defendant is only cutting the timber into small pieces and that cannot be construed as manufacturing process and dismissed the appeal. Hence, this second appeal is filed. 9.The following substantial questions of law were framed at the time of admitting the second appeal. 01.Whether the Courts below are right in shifting the burden on the appellant, who is the defendant in the suit which resulted in granting decree for possession? 02.Whether the Courts below are justified in not appreciating the evidence properly which resulted in decreeing the suit? 03.Whether the Courts below are right in not framing the issue and in giving the findings on the notice of termination issued under Section 106 of Transfer of Property Act? 04.Whether the Termination notice issued is valid to grant decree for possession? 05.Whether the Courts below are justified in rejecting the Exhibits C-1 and C-2 without reasons, which prove the defendant's claim in the property? 06.Whether the Courts below are right in not considering the pleadings, which give findings against the admissions made in favour of the appellant? 10.Heard both sides. 11.Though six substantial questions of law were framed by this Court while admitting the second appeal, having regard to the judgment laid down by the Hon'ble Supreme Court reported in 2009(1) LW 1, in the case of State Bank of India & others vs. S.N.Goyal, in my opinion, the 4th substantial question of law is only relevant for consideration in this second appeal. 12.Further, the substantial questions of law as framed at the time of admitting the second appeal, cannot be termed as substantial questions of law in the light of the aforesaid judgment. https://hcservices.ecourts.gov.in/hcservices/ 13.In the judgment reported in 2009(1) LW 1, in the case of State Bank of India & others vs. S.N.Goyal, the Hon'ble Supreme Court has elaborately dealt with, what is substantial question of law, stated as follows:- “9.1)What is a substantial question of law? Second appeals would lie in cases which involve substantial questions of law. The word 'substantial' prefixed to 'question of law' does not refer to the stakes involved in the case, nor intended to refer only to questions of law of general importance, but refers to impact or effect of the question of law on the decision in the lis between the parties, 'Substantial questions of law' means not only substantial questions of law of generally importance, but also substantial question of law arising in a case as between the parties. In the context of section 100 CPC, any question of law which affects the final decision in a case is a substantial question of law as between the parties. A question of law which arises incidentally or collaterally, having no bearing in the final outcome, will not be a substantial question of law. Where there is a clear and settled enunciation on a question of law, by this Court or by the High Court concerned, it cannot be said that the case involves a substantial question of law. It is said that a substantial question of law arises when a question of law, which is not finally settled by this court (or by the concerned High Court so far as the State is concerned), arises for consideration in the case. But this statement has to be understood in the correct perspective. Where there is a clear enunciation of law and the lower court has followed or rightly applied such clear enunciation of law, obviously the case will not be considered as giving rise to a substantial question of law, even if the question of law may be one of general importance. On the other hand, if there is a clear enunciation of law by this Court (or by the concerned High Court) but the lower court had ignored or misinterpreted or misapplied the same, and correct application of the law as declared or enunciated by this Court (or the concerned High Court) would have led to a different decision, the appeal would involve a substantial question of law as between the parties. Even where there is an enunciation of law by this court (or the concerned High Court) and the same has been followed by the lower court, if the appellant is able to persuade the High Court that the enunciated legal position needs reconsideration, alternation, modification or clarification or that there is a need to resolve an apparent conflict between two view points, it can be said that a substantial question of law arises for consideration. There cannot, therefore, be a https://hcservices.ecourts.gov.in/hcservices/ strait-jacket definition as to when a substantial question of law arises in a case. Be that as it may.” 14.The learned Senior counsel appearing for the appellant/defendant also submitted that the only substantial question of law that is arising in the second appeal is with regard to the validity of the notice issued by the 1st respondent/plaintiff and submitted his argument only in respect of that substantial of law. 15.Mr.M.Venkatachalapathy, the learned Senior Counsel appearing for the appellant/defendant submitted that admittedly, the appellant/defendant is running a saw-mill in the suit premises and running a saw-mill as a manufacturing process and notice was given by the 1st respondent/plaintiff granting one month time to the appellant to vacate the premises as if it is a monthly lease and therefore, there is no proper notice issued as per provisions of Section 106 of the Transfer of Property Act and on that ground the suit is liable to be dismissed. 16.In support of his contention, the learned counsel appearing for the appellant, relied upon the judgment reported in (1982)1 SCC 27 in the case of Idandas vs. Anant Ramchandra Phadke (Dead) by Lrs. and AIR 1971 MYSORE 365 in the case of John Augustine Peter Mirande and another vs. N.Datha Naik. 17.On the other hand, Mr.T.P.Sankaran, the learned counsel appearing for 1st respondent/plaintiff submitted that it is admitted by the appellant/defendant in the pleadings that the lease is for running a timber shop and he subsequently, installed a saw-mill and even assuming that saw-mill is running by the appellant/defendant in the suit premises, that will not amount to taking the property on lease for manufacturing purpose and hence, the lease must be construed as a monthly lease and a valid notice has been given and therefore, the notice issued is proper and the suit is liable to be decreed and the second appeal is liable to be dismissed. 18.In support of his contention, he relied upon the following judgments:- 01.AIR 1995 SC 2482 in the case of Shri Janki Devi Bhagat Trust, Agra vs. Ram Swarup Jain (dead) by Lrs. 02.2001(3) Supreme 482, in the case of Samir Mukherjee vs. Davinder K.Bajaj & Others. 03.1984(2)MLJ 92 in the case of P.N.Venkatesa Chettiar vs. Annamalai Industrial Corporation (in liquidation) represented by its Liquidator R.Narayanasami. https://hcservices.ecourts.gov.in/hcservices/ 04.1997(2) MLJ 283, in the case of Food Corporation of India, represented by its Regional Manager, Madras vs. The Thiruvalangadu Agricultural Service Co-operative Society Limited, Thiruvalangadu, Tanjavur. 05.AIR 1983 Andhra Pradesh 253 in the case of Kishan Chand vs. Sayeeda Khatoon. 06.AIR 1996 ORISSA 3, in the case of Bachulal Sah vs. M/s.Gita Timber Co. 19.In the judgment reported in (1982)1 SCC 27, in the case of Idandas vs. Anant Ramchandra Phadke (Dead) By Lrs., the 'phrase' manufacturing purpose has been dealt with and the Hon'ble Supreme Court has held that in order to consider the lease one for manufacturing purpose, the following test must be satisfied:- “01.That it must be proved that a certain commodity was produced; 02.That the process of production must involve either labour or machinery; 03.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.” Applying the test laid down by the Hon'ble Supreme Court in the above judgment, we will have to see whether the premises is used for manufacturing purpose. 20.Prior to that, we will have to see whether the property was let out for the purpose of manufacturing purpose. As rightly contended by the learned counsel appearing for the 1st respondent/plaintiff that the case of the 1st respondent/plaintiff was that the defendant was put in possession of the property under the registered lease deed, dated 04.03.1975 for running a timber shop and the lease is for a period of five years from 14.03.1975 upto 14.03.1980 and it was renewable for a further period of five years upto 14.03.1985 and thereafter, it was renewable and the defendant/appellant was paying the rent at the rate of Rs.500/- from 14.03.1985. The 1st respondent/plaintiff has not stated that when the lease was renewed after 14.03.1985. It is not for any specific term, but it was written and the appellant/defendant was paying Rs.600/- thereafter. 20.In the statement filed by the appellant/defendant, he has stated that the property was taken on lease for the purpose of doing timber business and saw-mill and immediately after taking the https://hcservices.ecourts.gov.in/hcservices/ property on lease, the defendant installed a saw-mill. Thereafter, he applied for electricity connection from the electricity Board and the plaintiff/1st respondent has given consent for the same. Therefore, as per the admission of the appellant/defendant in the written statement that the saw-mill was installed after the property was taken on lease and when the lease was entered into between the parties, the lease was taken for the purpose of timber shop. In other words, at the time of inception of tenancy, lease was for running a timber shop and latter, the appellant/defendant installed saw-mill and is running a saw-mill in the premises, of-course after getting consent from the plaintiff. Though, it is stated in the plaint that the lease is for a period of five years and it was renewed twice, but the lease deed was not marked. Therefore, in the absence of any lease that was entered into between the parties, we will have to see what is the position of law in respect of such lease. 21.In the judgment reported in 2001(3) Supreme 482, in the case of Samir Mukherjee vs. Davinder K.Bajaj & others, the Hon'ble Supreme Court after relying upon the judgment reported in AIR 1995 SUPREME COURT 2482, in the case of Shri Janki Devi Bhagat Trust, Agra vs. Ram Swarup Jain (dead) by Lrs, interpreting sections 106 and 107 of the Transfer of Properties Act, held as follows:- “5.Section 106 lays down a rule of construction, which is to apply when the parties have not specifically agreed upon as to whether the lease is yearly or monthly. On a plain reading of this section it is clear that legislature has classified leases in two categories according to their purposes and this section would be attracted to construe the duration of a valid lease in the absence of a contract or local law or usage to the contrary. Where the parties by a contract have indicated the duration of a lease, this section would not apply. What this section does is to prescribe the duration of the period of different kinds of leases by legal fiction-leases for agricultural or manufacturing purposes shall be deemed to be lease from year to year and all other leases shall be deemed to be from month to month. Existence of a valid lease is a pre- requisite to invoke the rule of construction embodied in Section 106 of Transfer of Property Act. 6.Section 107 prescribes the procedure for execution of a lease between the parties. Under the first paragraph of this section a lease of immovable property from year to year or for any term exceeding one year or reserving yearly rent can be made only by registered instrument and remaining classes of leases are governed by the second paragraph that is to say all other leases of immovable property can be made either by registered instrument or by oral agreement accompanied by delivery of possession. https://hcservices.ecourts.gov.in/hcservices/ 7.In the case in hand we are concerned with an oral lease which is hit by the first paragraph of Section 107 of the Transfer of Property Act. Under Section 107 parties have an option to enter into a lease in respect of an immovable property either for a term less than a year or from year to year, for any term exceeding one year or reserving a year rent. If they decide upon having a lease in respect of any immovable property from year to year or for any term exceeding one year, or reserving yearly rent, such a lease has to be only be a registered instrument, in absence of a registered instrument no valid lease from year to year or for a term exceeding one year or reserving a yearly rent can be created. If the lease is not a valid lease within the meaning of the opening words of Section 106 the rule of construction embodied therein would not be attracted. The above is the legal position on a harmonious reading of both the sections.” Therefore, even assuming that the appellant/defendant has taken the property on lease for manufacturing purpose, as alleged by the appellant/defendant, in the absence of any registered document, as per law laid down by the Hon'ble Supreme Court, the lease must be construed as a monthly lease and if so construed, the notice issued giving 15 days time is valid. 22.In this case, admittedly the lease deed was not marked and in the absence of any lease deed, the lease must be construed as monthly lease and notice issued by giving 15 days time was properly valid. 23.As per the tests laid down by the Hon'ble Supreme Court in the judgment reported in (1982)1 SCC 27, in the case of Idandas vs. Anant Ramchandra Phadke (Dead) by Lrs., the cutting of wood into pieces cannot be termed as manufacturing process and as the Lower Appellate Court rightly held that after quoting the passage from H.S. Court's Transfer of Property Act, 1982 (9th Eduction Vol.II, 1994 (Reprint), in page 1580-1581, mere change brought about in the size of timber as a result of treatment in the saw mill cannot amount to manufacture. 24.Further, while considering the lease whether it is manufacturing process or not, we will have to see the purpose for which the lease was entered into initially and the subsequent use of the property by the lessee should not be taken into consideration to decide the nature of lease. 25.In this case, as stated supra, it is admitted by the defendant that after the property was taken on lease, he installed a saw-mill. Therefore, at the inception of lease, the lease was only for the purpose of running the timber shop and later on, he used the https://hcservices.ecourts.gov.in/hcservices/ premises for running a saw-mill, the later use cannot be taken into consideration to find out the purpose of the lease for which, the property was taken by the appellant/defendant. Therefore, the substantial question of law No.4 is answered against the appellant. 26.Hence, in my opinion, the notice issued is proper and both the Courts below have rightly came to the conclusion that the 1st respondent/plaintiff is entitled to recovery of possession and the appellant/defendant has not proved that he spent amount for putting up a superstructure and he has not paid rent to the 1st respondent/plaintiff. 27.In the result, the judgments and decrees of the Courts below are confirmed and the second appeal is dismissed. No costs. Sd/ Asst.Registrar //True Copy// Sub.Asst.Registrar er To 1.The Subordinate Judge, Poonamallee. 2.The District Munsif Poonamllee. 1 cc to M/s.M.Sriram , Advocate, Sr.No.35140 1 cc to Mr. T.P.Shankaran, Advocate, Sr.No.35144 S.A.No.2083 of 2001 mg(co) pmk.9.9.20115 https://hcservices.ecourts.gov.in/hcservices/