BEFORE THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 30.09.2008 CORAM THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYAN A.S.No.42 of 2002 M/s.Singer India Limited, Branch Office, 54, Bhimanna Mudali II Street, Administration Office, Rangachari Road, Alwarpet, Chennai-18, represented by power of attorney agent Mr.R.Gunasekaran .. Appellant / Defendant Vs. Christ Church rep by Secretary Pastorate Committee NO.56, Annasalai, Chennai-2. .. Respondent / Plaintiff Prayer :- This appeal has been preferred under Order 41 Rule 1 & 2 and Section 96 of CPC against the decree and judgment dated 16.11.2000 in O.S.No.1497 of 1998 on the file of the Court of VI Additional Judge, City Civil Court, Chennai. For Appellants : Mr.T.L.Ram Mohan, Senior Counsel for Mr.R.Madanagopal, Advocate For Respondent : Mr.N.D.Bahety, Advocate JUDGMENT This appeal has been directed against the decree and judgment in O.S.No.1497 of 1998 on the file of the VI Additional Judge, City Civil Court, Chennai. The defendant in O.S.No.1497 of 1998 on the file of the VI Additional Judge, City Civil Court, Chennai, is the appellant herein. The plaintiff has filed the suit for recovery of vacant possession in respect of the plaint schedule property from the defendant and also for past and future mesne profits and also for damages for illegal use and occupation of the premisses. https://hcservices.ecourts.gov.in/hcservices/ 2.The averments in the plaint sans irrelevant particulars are as follows:- The plaintiff is the owner of the plaint schedule property bearing Door No.55, Anna Salai, Chennai-2. The plaint schedule property is exempted from the scope and purview of the Tamil Nadu Buildings (Lease and Rent Control) Act 18 of 1960 as amended under G.O.Ms.No.2000, Home, dated 16.8.1976. The defendant is the tenant under the plaintiff in respect of the plaint schedule property for a monthly rent of Rs.10,000/-. The tenancy being from month to month according to English calendar, a sum of Rs.1 lakh has also been paid by the defendant to the plaintiff towards advance. The plaintiff has terminated the tenancy under the suit notice dated 30.6.1997 by the expiry of 1.8.1997. Even after the receipt of the said notice the defendant has failed to quit and deliver the vacant possession of the plaint schedule property. Since the rent fixed by the parties for the plaint schedule property was very low, the plaintiff at the first instance negotiated with the defendant for the payment of a reasonable rent according to the prevailing rent in the locality. Since the negotiation failed, the plaintiff has decided to start a computer centre in the plaint schedule property not only for the benefit of the children studying in the school but also for the general public. Therefore, the plaintiff had terminated the said tenancy of the defendant, calling upon the defendant to pay a sum of Rs.1 lakh per month as damages for the illegal use and occupation of the plaint schedule property by the defendant after the termination of the said tenancy from 1.8.1997. The defendant is still continuing to pay a sum of Rs.10,000/- only to the plaintiff every month, and as such after giving credit to the sum of Rs.1,00,000/- paid as advance and a further sum of Rs.60,000/- from 1.8.1997 to 28.2.1998 @ Rs.10,000/- per month total aggregating to Rs.1,60,000/- there is still a balance to the plaintiff towards the said total damages of Rs.7,00,000/- (from 1.8.1997 to 28.2.1998 @ Rs.1 lakh per month), and which too the defendant has failed and neglected to pay. Hence, the suit. 3.The defendant in their written statement would contend that the defendant M/s.Singer India Limited is a company incorporated under the Companies Act, 1956, represented by its Law Officer and Power of Attorney Mr.R.Gunasekaran. The present suit field by the plaintiff is not maintainable. The notice issued by the plaintiff is not in accordance with Section 106 of the Transfer of Property Act, 1882, as the same does not expire with the end of the month of tenancy. The suit is not maintainable and is liable to be dismissed as the same is not in accordance with the provision under Order 29 Rule 2 of CPC. No service was effected at the Registered Office of the defendant company. The suit is not maintainable since the plaintiff after the issuance of the notice has been accepting the https://hcservices.ecourts.gov.in/hcservices/ rent and thereby has waived the notice of alleged termination. The defendant is now having its branch office at Chennai at Door No.17-A, Muthiyal Naidu Street Little Mount, Saidapet, Chennai-15. The defendant became a tenant of the suit property in the year 1952. At the request of the plaintiff the rent was increased to Rs.2,500/-. Now the rent has further been increased and the defendant is paying the rent at the rate of Rs.10,000/- per month at present. The plaintiff is still holding the advance amount of Rs.1 lakh paid by the defendant. There is no valid notice as contemplated under Section 106 of Transfer of Property Act, 1882, issued by the plaintiff. As such the suit is not maintainable under law. The plaintiff demanded higher rent for the suit premises. However, considering the request on charity ground the defendant offered to increase the rent to Rs.25,000/- per month. But reasons best known to the plaintiff, the defendant's offer of rent of Rs.25,000/- per month was rejected by the plaintiff. The claim of Rs.1 lakh per month towards damages for illegal use and occupation is also not maintainable. The plaintiff is not entitled to claim the rent more than the prevailing rent of Rs.10,000/- per month. The plaintiff is not entitled to adjust the advance of Rs.1 lakh towards the alleged claim of damages. The defendant is not liable to pay the sum of Rs.7 lakhs as claimed in the plaint towards damages. There is no cause of action for the plaintiff to file the suit. The calculation memo filed by the plaintiff is totally false. A sum of Rs.60,000/- paid by the defendant was towards rent and not towards damages as falsely alleged in the memo of calculation by the plaintiff. The plaintiff is not entitled to claim Rs.5,40,000/- together with interest towards damages. The defendant is paying the rent without any default. Hence, the question of interest does not arise. Hence, the suit is liable to be dismissed with costs. 4.The learned trial Judge has framed 9 issues for trial. The Secretary of the plaintiff viz. Mr.Kolin Reymond was examined as P.W.1 and Ex.A.1 to Ex.A.3 were exhibited on the side of the plaintiff. The power of attorney agent of the defendant was examined as D.W.1 and no document was marked on the side of the defendant. After meticulously going through the evidence both oral and documentary and after giving due consideration to the submission made by the learned counsel on both sides, the learned trial Judge has decreed the suit relegating the question of mesne profits to a separate proceedings under Order 20 Rule 12 of CPC. Aggrieved by the findings of the learned trial Judge, on behalf of the defendant this appeal has been preferred. 5.The points for determination in this appeal are as follows:- 1)Whether the trial Court is correct in law to pass a judgment for delivery of vacant possession in lieu of the ratio laid down by the Honourable Apex Court in AIR 1985 (1) SCC 290 and 1989 https://hcservices.ecourts.gov.in/hcservices/ (3) SCC 293? 2)Whether the notice to quit under Section 106 of the Transfer of Property Act issued by the plaintiff is valid under law? 3)Whether the decree and judgment of the learned trial Judge in O.S.No.1497 of 1998 on the file of the VI Additional Judge, City Civil Court, Chennai, is liable to be set aside for the reasons stated in the memorandum of appeal? 6.Point No.1:- The learned senior counsel Mr.Ram Mohan appearing for the appellant focusing the attention of this Court to the plaint para 6 would contend that the plaintiff had filed the suit for recovery of possession on the ground that the plaint schedule property is required for the plaintiff to start a computer centre in the plaint schedule property for the benefit of the children studying in the plaintiff's school and also for the general public, and that while disposing of the suit the learned trial Judge has failed to consider the aspect whether the requirement of the plaintiff for starting a computer centre at the plaint schedule property is genuine or not, as per the ratio decidendi in AIR 1985 (1) SCC 290 (S.Kandaswamy Chettiar Vs. State of Tamil Nadu and another). The short facts of the above said ratio runs as follows:- Writ petitions and civil appeals by special leave were filed by the petitioners and appellants, who are tenants under the landlord, which is a Hindu, Christian and Muslim religious public trusts and also public charitable trusts in the State of Tamil Nadu. Under the writ petitions the tenants have challenged the legality and validity of the total exemption granted to all such buildings from all the provisions of the Tamil Nadu Buildings (Lease and Rent Control), Act, 1960 (Tamil Nadu Act 18 of 1960) (for short 'the Act') in exercise of the powers conferred upon the State Government under Section 29 of the Act. Under Section 29 of the Act the Government can exempt any building or class of buildings from all or any of the provisions of this Act. The Government had passed G.O.Ms.No.1998 (Home) dated August 12, 1974, in exercise of its powers under Section 29 exempting all the buildings all the buildings owned by the Hindu, Christian and Muslim religious trusts and charitable institutions from all the provisions of the Act. But subsequently by a fresh G.O.Ms.No.2000 (Home) dated August 16, 1976, the State Government, in supersession of the ealier notification dated August 12, 1974, confined the exemption to all buildings owned by the Hindu, Christian and Muslim religious public trust and public charitable trust. https://hcservices.ecourts.gov.in/hcservices/ The tenants have challenged the aforesaid notification granting total exemption to all buildings belonging to the Hindu, Christian and Muslim religious public trusts and public charitable trusts from all the provisions of the Act on three grounds – (a) that Section 29 of the Act suffers from the vice of excessive delegation of legislative powers inasmuch asit vests in the State Government unguided and uncontrolled discretion in the matter of granting exemptions and is, therefore, violative of Article 14 of the Constitution, (b) that the notification dated August 16, 1976 deprives the tenants of all such buildings (buildings belonging to Hindu, Christian and Muslim religious public trusts and public charitable trusts) of the equal protection of the beneficial provisions of the Act which is available to the tenants of other buildings and as such the same is discriminatory offending against the equal protection clause of Article 14 and (c) that in any event the total exemption from all the provisions of the Act granted to such buildings, where partial exemption would have sufficed, is excessive, unwarranted and unsupportable. The State Government and the respondent landlords have refuted all the grounds on which the exemption has been challenged. While disposing of the writ petitions as well as the Civil Appeal, the honourable Apex Court has held as follows:- "In other words the Legislature itself has made a rational classification of buildings belonging to Government and buildings belonging to religious, charitable, educational and other public institutions and the different treatment accorded to such buildings obviously proceeds on the well-founded assumption that the Government as well as the landlords of such buildings are not expected to and would not indulge in rack-renting or unreasonable eviction. These and similar other provisions crystallize the policy and purposes of the Act and furnish the requisite guidance which can legitimately govern the exercise of power conferred on the State Government under section 29 of the Act. The guidance thus afforded may illustratively be indicated by stating that the power to grant exemptions or make exceptions could be legitimately exercised by the State Government in areas or cases where the mischief https://hcservices.ecourts.gov.in/hcservices/ sought to be remedied by the Act is neither prevalent nor apprehended as also in cases (individual or class of cases) where a uniform or inflexible application of the law is likely to result in unnecessary or undue hardship (her to landlords) or in cases where the beneficial provision is likely to be or is being abused by person for whom it is intended (here the tenants). The question is whether in issuing the notification dated August 16, 1976 the State Government has exercised the power in conformity with such guidance and the same is valid as not offending Article 14 of the Constitution." Relying on the above said passage in the above said dictum of the Honourable Apex Court the learned senior counsel Mr.Ram Mohan for the appellant would contend that the plaintiff has specifically pleaded in the plaint that they require the plaint schedule property only for the purpose of starting a computer centre for the benefit of the children studying in the plaintiff's school and also for the general public. But in the absence of any material placed before the trial Court to show that any concrete steps have been taken for starting a computer centre in the plaint schedule property, the learned trial Judge has decreed the suit thereby directing the defendant to handover the vacant possession of the plaint schedule property to the plaintiff, which is not the intention of the legislator under Section 106 of the Transfer of Property Act. 6(a)For the same proposition of law the learned senior counsel Mr.Ram Mohan for the appellant could also rely on 1989 (3) SCC 293 (M/s.Dwarkadas Marfatia and sons Vs. Board of Trustees of the Port of Bombay). The relevant observations relied on by the learned senior counsel in the above said ratio are as follows:- "Our attention was also drawn to the decision in Rampratap Jaidayal Vs. Dominion of India (1952 LR 54 Bom 927, 934), where the Chief Justice Chagla observed as follows:- It is not too much to assume, as the legislature did in this case assume, that the very government whose object was to protect the tenants and prevent rent being increased and prevent people being ejected, would not itself when it was the landlord do those very things which it sought to prohibit its people from doing, and therefore the underlying assumption of this exemption is that government would not increase rents and would not eject tenants unless it was absolutely necessary in public interest and unless a particular building was required for a public purpose. https://hcservices.ecourts.gov.in/hcservices/ This Court in Baburao Shantaram More Vs. Bombay Housing Board (1954 SCR 572) had to consider Section 4 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, and so far as material for our present purpose explained the basis of exemption under Section 4 as that the government or local authority or the Board would not be actuated by any profit making motive so as to unduly enhance the rents or eject the tenants from their respective properties as private landlords are or are likely to be. In other words, this Court recognised that the basis of differentiation in favour of the public authorities like the respondent, was on the ground that they would not act for their own purpose as private landlords do, but must act for public purpose. Our attention was also drawn by Mr.Chinai, learned counsel for the appellant, to the observations in Administrative Law by wae, 5th edition at page 355. It was stated therein as follows:- Statutory power conferred for public purposes is conferred as it were upon trust, not absolutely – that is to say, it can validly be used in the right and proper way which Parliament when conferring it is presumed to have intended. ..................................... It was urged that the respondent did not enjoy any special privileges/powers or benefits vis-a-vis such activities by virtue of its being a local body or government character. In the premises, it was contended that such a body stands on the same footing as any other citizen and will, in respect of such activity, not be subjected to public law duty. We are unable to accept the submissions. Being a public body even in respect of its dealing with its tenant, it must act in public interest, and an infraction of that duty is amenable in examination either in civil suit or in writ jurisdiction. Our attention was drawn to the observations of this Court in Radhakrishna Agarwal Vs. State of Bihar (1977-3 SCC 457 : 1977 – 3 SCR 249 ). Reliance was also placed on the observations of this Court in Life Insurance Corpn. of India Vs.Escorts Ltd., (1986-1 SCC 264 : 1985 Supp 3 SCR 909), in support of the contention that the public corporations dealing with tenants is a contractual dealing and it is not https://hcservices.ecourts.gov.in/hcservices/ a matter for public law domain and is not subject to judicial review. However, it is not the correct position. The Escorts Decision reiterated that every action of the State or as instrumentality of the State, must be informed by reasons. Indubitably, the respondent is an organ of the State under Article 12 of the Constitution. In appropriate cases, as was observed in the last mentioned decision, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution. But it has to be remembered that Article 14 cannot be construed as a charter for judicial review of State action, to call upon the State to account for its actions in its manifold activities by stating reasons for such actions. The contractual privileges are made immune from the protection of the Rent Act for the respondent because of the public position occupied by the respondent authority. Hence, its actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason not whimsically for any ulterior purpose. Where any special right or privilege is granted to any public or statutory body on the presumption that it must act in certain manner, such bodies must made good such presumption while acting by virtue of such privilege. Judicial review to oversee if such bodies are so acting is permissible. ............ The High Court had relied on the observations of this Ciourt in Kasturi Lal Lakshi Reddy Vs. State of J & K (1980 – 4 SCC 1 : 1980-3 SCR 1338) that the State was not totally freed of the duty to act fairly and rationally, merely because it could do so under a contract. The High Court stated that though it might be accepted that a public body like the respondent should not act unreasonably or unfairly but it did not follow that every time they decided to take action against the contractual tenants, they had to decide the said action in terms of fairness, equity and good faith. In support of this proposition, reliance was placed on the observations of this Court in LIC Vs. Escorts (1986-1 SCC 264 : 1985 Supp 3 SCR 909). In this connection, Mr.Chinai appearing for the appellant reiterated before us as he did before the High Court, that the basis of the legitimate assumption or expectation of which the statutory exemption had been granted by the legislature to the Bombay Port Trust provided a guideline or touchstone by which the conduct of the public authority which had been granted exemption, https://hcservices.ecourts.gov.in/hcservices/ should be judged. And, according to him, the necessity of eviction in the instant case, must have been only in the public interest." Relying on the above said ratio decidendi the learned senior counsel would contend that the learned trial Judge without adverting to the fact whether the requirement of the plaintiff for starting a computer centre in the plaint schedule property is genuine and bonefide, had decreed the suit which warrants interference from this Court. But it is pertinent to note at this juncture that this points were not at all raised before the trial Court by the defendant / appellant herein in their written statement. But while examining P.W.1 a suggestion was put to P.W.1 and an answer was extracted from P.W.1, so to say adverse to the interest of the defendant, to the effect that preparations have been made by the plaintiff for starting a computer centre in the plaint schedule property. The answer to the question put on the side of the defendant to the effect that there was no plan prepared for the building and no estimate was prepared for starting a computer centre by P.W.1 is of no way strengthen the case of the defendant because only in the existing suit building the plaintiff wants to start a computer centre for which no new approval of plan is necessary and it is not the botheration of the defendant about the expenditure that is to be incurred by the plaintiff for starting a computer centre in the plaint schedule property. When this point was argued by the learned counsel on both sides, the learned counsel for the respondent informed this Court that after the defendant vacated the suit premisses on 30.11.2004, the plaintiff has started the computer centre in the plaint schedule property for the children studying in the school and also for the general public. In lieu of the above said submission made by the learned counsel for the respondent, this Court has also directed the learned counsel for the respondent to file an affidavit to that effect in the course of the day. (At 3.40 pm the learned counsel for the plaintiff / respondent herein filed an affidavit stating that from November-2004 onwards, the plaintiff has started the computer centre in the plaint schedule premisses and also running a kindergarten nursery in the suit premisses. The said affidavit is recorded.) Under such circumstance, the contention of the learned counsel appearing for the appellant that the relief asked for under the plaint, in the absence of any evidence as to show that the suit building is required by the plaintiff for the purpose of starting a computer centre is not maintainable, holds no water. Hence, I hold on Point No.1 that the relief granted by the trial Court for recovery of possession cannot be interfered with for the reasons adverted to by the learned counsel appearing for the appellant relying on the ratio decidendi in AIR 1985 (1) SCC 290 (S.Kandaswamy Chettiar Vs. State of Tamil Nadu and another) and 1989 (3) SCC 293 (M/s.Dwarkadas Marfatia and sons Vs. Board of Trustees of the Port of Bombay). Point No.1 is answered accordingly. https://hcservices.ecourts.gov.in/hcservices/ 7.Point No.2:- The other limb of argument advanced by the learned senior counsel for the appellant is that the notice under Section 106 of the Transfer of Property Act is not maintainable on the ground that the plaintiff has asked the defendant to vacate and handover possession of the plaint schedule property on or before 1.8.1997, which is against the provisions of Section 106 of the Transfer of Property Act, under which the plaintiff ought to have asked the defendant to vacate and handover possession of the plaint schedule only on the expiry of the last date of the month. Section 106 of Transfer of Property Act reads as follows:- "Duration of certain leases in absence of written contract or local usage_ (1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultrural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months' notice; and a lease of immovabe property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part ofeither lessor or lessee, by fifteen days' notice. (2)Notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub- section(1) shall commence from the date of