Civil Revision No.2531 of 1994 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Revision No.2531 of 1994 (O&M) Date of decision: 04.03.2009 Municipal Committee, Ambala City through its Administrator .............. Petitioner Vs. Rajinder Kumar Bansal and others ............Respondents 2. Civil Revision No.2677 of 1994 (O&M) Louis Club Ambala through Deputy Commissioner, Ambala and others .............Petitioners Vs. Rajinder Kumar Bansal and others ............Respondents Present: Mr. S.K. Garg Narwana, Addl. A.G., Haryana and Mr. Deepak Girotra, AAG Haryana for the petitioner. Mr. C.B. Goel, Advocate with Mr. M.K. Bansal, Advocate. for respondent Nos.1 to 3. Mr. Sunil Kumar, Advocate for respondent No.5. CORAM: HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? Yes 2. To be referred to the Reporters or not ? Yes 3. Whether the judgment should be reported in the Digest? Yes -.- K.KANNAN, J. I. Array of parties: 1. The above revision petitions arise out of the common judgment in Rent Appeals No.28 and 29 of 1991. The appeals before the Appellate Authority arose out of the judgment rendered in the rent Civil Revision No.2531 of 1994 (O&M) -2- application No.212/2 of 1980 by the Rent Controller, Ambala City. The petitions had been filed by the persons claiming to be legal representatives of the original owner, one Bhagwan Dass, who held occupancy rights in respect of the land in question. The rent petition had been filed against the Louis Club, Ambala through the Deputy Commissioner, the Deputy Commissioner and the State of Haryana, Chandigarh represented by the Secretary who were arrayed as respondent Nos.1 to 3. They were the appellants in Rent Appeal No.28 of 1991 and the revision petitioners are in C.R. No.2677 of 1994. The respondent Nos.4 and 5 before the Rent Controller had not preferred any appeal either before the Appellate Authority or revision petition before this Court. The 6th respondent, who represented the Municipal Committee, Ambala City was the appellant in Rent Appeal No.29 of 1991 and the revision petitioner is in C.R. No.2531 of 1994 before this Court. II. Background facts: 2. Now to certain facts; one Telu Ram was alleged to be the original owner of the property under whom Bhagwan Dass held occupancy rights under the Punjab Tenancy Act, 1887. The latter had executed a gift deed in favour of the 1st respondent-Louis Club on 16.01.1909 for the purpose of running a club only after construction of building thereon in respect of the land bearing Khasra No.770 comprising 15 bighas and 12 biswas and property in Khasra No.771 comprising of 0 bighas 8 biswas and in all 16 bighas. It appears that the donor had doubt about his own right to make a gift deed of property in which he held only an occupancy right and therefore, a Civil Revision No.2531 of 1994 (O&M) -3- lease deed was made on 03.03.1909 in favour of the 1st respondent in supercession of the earlier document. It was stipulated that the respondent No.1 shall pay Rs.10 per year by way of rent besides land revenue. It was a permanent lease and the property was stipulated to be used for the purpose of a club and also gave the power to the lessee to construct a pavilion in order to run the said club. It was agreed that if the club was wound up or discontinued or was not used for the purpose of the club, the property would revert to the lessor without any further hindrance on the part of the 1st respondent. III. Stipulated user for club purposes, not breached: 3. It is not denied by either of the parties that a building had been constructed and the property was used for the purpose of club only. The lease deed also contained other provisions in the nature of convenants of both parties as to the nature of the user and the contingencies that would give the right to the lessor to resume possession. IV. Subsequent transactions by tenant-genesis of dispute: 4. The contention of the petitioners was that the 1st respondent and the State functionaries, who were respondent Nos.2 and 3 created a sub-lease in respect of the premises in favour of the 4th respondent namely Lady Tandon Club represented through the Secretary and the President who were described as respondent Nos.4 and 5. Yet another portion of the property was said to have been transferred by the 1st respondent to the Municipal Committee arrayed as the 6th respondent. The 6th respondent, it was alleged had changed the user of property and started sinking tubewell for the use of the residents of the town. Civil Revision No.2531 of 1994 (O&M) -4- Under the circumstances, the petitioners claiming to be landlords sought for ejectment of the respondents on the grounds: (i) that the respondents had failed to pay the rent (ii) that the respondent Nos.1 to 3 had sublet the premises without the consent of the landlord (iii) that the property had been abandoned by the 1st respondent itself which had ceased to exist and that the premises were now being used for offices of different departments like the Rifle Club etc. and (iv) that the user of the property had been perverted to uses not authorized. The tenants had changed the user of the property by giving it to the other departments namely respondent Nos.4 and 5 as well as to respondent No.6 who were putting the property to use inconsistent with a specific user stipulated under the documents. Such user, according to the landlord, had resulted in impairment of value and utility of the part of the land and hence, the respondents were liable for eviction. V. The multifaceted defence: 5. All the respondents except respondent Nos.4 and 5 joined issues with the petitioners and every one of the contentions raised. Respondent Nos.1 to 3 stated at the outset that the property was not a “rented land” and the property being the subject of a gift to the 1st respondent had never been used for business and commercial purpose. The subject matter of property and the mode of user authorized under the gift deed and later under the lease deed did not conform to the definition of “rented land” occurring under the Haryana Urban (Control of Rent and Eviction) Act, 1973 and hence, the Rent Controller did not have jurisdiction to entertain the petition. The Civil Revision No.2531 of 1994 (O&M) -5- respondent Nos.1 to 3 also denied the relationship of landlord and tenant between the parties. It was considered by respondent Nos.1 to 3 that the Lady Tandon Club described as respondent No.4 had been occupying the portion of the property since 1936 as a licensee. According to the respondents, after the gift of the property by Bhagwan Dass, he had also the consent of the land owner for the gift so made by him and had divested himself of all rights. The revenue entry had also been mutated and mutation Nos.351 and 354 effected a complete transfer of ownership in the Louis Club. As regards the lease deed, it was contended that it was a proper transaction executed on an apprehension that the gift deed was not valid. It was their contention that all rights in respect of the property had become vested in the State Government. It was averred that the complicated questions of facts and law arose and the jurisdiction of the Rent Controller, who had entertained the petition itself was disputed. It was prayed in the alternative that the petitioners should be directed to get the decision from the Civil Court and the petitions before him should be summarily rejected. There were other technical objections regarding the representation of the respondent Nos.1 to 3. Respondent Nos.4 and 5 have also submitted their objections denying the jurisdiction of the Rent Controller and setting aside generally facts affirming the contentions raised by respondent Nos.1 to 3. The 6th respondent had also filed his objections stating that the petitioners were legally estopped from claiming ownership of the property where several persons have donated the property for public use and when the property had been used for the public benefit, the petitioners were not Civil Revision No.2531 of 1994 (O&M) -6- entitled to treat themselves as owners of the property and seek for ejectment. VI. Issue of jurisdiction-the core issue: 6. The Rent Controller and the Appellate Authority have upheld the claim of the landlord and before this Court, the point which was raised at the threshold is the nature of lease and the jurisdiction of the Rent Controller to entertain the petition. Although, I had allowed the respective counsel on both sides to argue on all points including the merits of the case and the respective claims of the parties about the existence or otherwise of the lease and the effect of subsequent legislation conferred rights of ownership to occupancy tenants and the effect of transfer of an occupancy tenancy, I deem it necessary to take up the issue of the jurisdiction of the Rent Controller immediately for the finding one way or the other would lead to the question whether the consideration of all other contentions of parties is necessary or not. VII. The recitals in the lease deed: 7. The translated copy of the lease deed sets out the circumstances under which it was made “.....that the executant with his own free will without any pressure gave possession for entertainment vide gift dated 16.01.1909 in favour of Louis Club, Ambala City and possession was also given to the club. The gift deed was also got registered. As gift deed as per condition on line No.12, 13 of gift deed is not legally valid (sic), so said gift deed was cancelled by the present deed. Occupancy rights are given to Louis Club for its use. Club is in possession. Club is authorized to use the land for the purpose of club. For the occupancy rights of the executant the rent Civil Revision No.2531 of 1994 (O&M) -7- has been fixed at Rs.10 per year which will be paid yearly...... The condition is that if club ceases to exist and land is not used then the land will come back to the executant. If there is any construction the executant will pay the market price. If the executant is not prepared to pay the price the club is authorized to remove the materials and sell the same to somebody else for which the executant will have no objection. The owners have given consents separately for the above. That perpetual lease deed has been scribed on 03.03.1909." Even in the gift deed dated 16.01.1909, the reference is to the fact that the executant as well as his heirs have no interest left in their hands and the 1st respondent has a right to use the land for the purpose of club. It similarly contained reference to reversion to the owner if the property is not put to use of the club. VIII. Nature of activities of club not stipulated but landlord has consented to the mode of user: 8. It can be seen that the activities of the club itself is not anywhere stated specifically from the recitals of the lease but going by the conduct of the successor-in-interest of the original executant namely Gauri Shankar, it is clear that the original donee/permanent lessee had not put the property to any use which was against what was contemplated by the parties. Bhagwan Dass himself had written a letter on 24.10.1938 (Ex.P-4) affirming receipt of rent and land revenue from the club. In the year 1938, the President of the Louis Club recorded the fact that a pavilion was constructed on the land at a cost of Rs.9,000/- and had given to the District Board on certain conditions, which included inter alia, that the District Board, Ambala could arrange annual school meets in the land but if they desired to Civil Revision No.2531 of 1994 (O&M) -8- use the land for any other purpose, first they should obtain the consent from the occupancy tenant Lala Bhagwan Dass and his heirs and secondly from the Managing Committee members of the club. This marks perhaps the first entry of how from the hands of Louis Club, the District Board, Ambala obtains some interest in the property. Bhagwan Dass also appeared to have given consent of such transaction by its own letter dated 24.10.1938 (Ex.P-4) where it is stated that if there was any non-payment of rent in respect of the ground Bhagwan Dass expressed that he be let known by the Secretary of the Louis Club so that he could recover the amount from the District Board. IX. Meaning of "Rented Land", explained: (i) Definition under the Act 9. Admittedly, the property that had been rented out, assuming that it was the subsequent perpetual lease that prevailed over the original deed of gift was in respect of the land and not of building. The "rented land" is defined under the Haryana Urban (Control of Rent and Eviction) Act, 1973 under Section 2F as follows:- "Rented land" means any land let separately for the purpose of being used principally for business or trade". 10. There are three expressions which are important for consideration of this definition: (i) it shall be in respect of land and not of building; (ii) it is the principal use or, to use synonym, the predominent use; and (iii) that such use shall be for business or trade. (ii) Decisions of Hon'ble Supreme Court considered 11. Learned State Counsel appearing for the petitioners states Civil Revision No.2531 of 1994 (O&M) -9- that the expression business or trade invokes concept of an activity for profit or some activity which is more than mere entertainment. According to him, by the terms of the gift and the lease, the property had been let out to the club for its activities. The club's activities are themselves not clearly spelt out but by the subsequent conduct to which the lessor was aware of, it is a clear fact that the club's activities partook the nature of construction of a pavilion and user of the property by the District Board and the Municiplaity. The learned counsel for the petitioners refers to a decision in Haji Ismail Valid Mohamad Vs. Sports Club in the name of Union Sports Club 1992 AIR (SC) 1855; 1992(1) SCC 315, 1992(1)RCR (Rent) 7, while dealing with the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 where the premises under tenancy with a club engaged in promoting activities of indoor and outdoor games was considered. Section 6 of the Act provided its applicability to "premises let for residence, education, business, trade or storage and also open land let for building purposes". The Hon'ble Supreme Court had adverted to the finding rendered by the Courts below that the activities of the club related to playing of indoor games like cards. In the opinion of the Hon'ble Supreme Court, the activities of the club were no more in the nature of cultural activities or recreational activities. The basic purpose of the club activities related to fraternising among the members by playing indoor or outdoor games and such activities could not lead to the conclusion that the premises were let for purposes of education and the suit filed was found to be competent. The case arose in a situation, where the club resisted the Civil Revision No.2531 of 1994 (O&M) -10- suit by saying that only the Rent Control Act could apply and the Civil Court did not have jurisdiction to entertain the suit. The Hon'ble Supreme Court found that if the activities of the club could not be treated as one for education but only for recreation, the Act itself would not be applicable and the tenant would not be entitled to the benefits of the Act. (iii) Decisions of Punjab & Haryana and other High Courts considered 12. In Hazara Singh and others Vs. Dalip Singh and others 1981 AIR (Punjab) 155, 1981 (1) R.C.R. (Rent) 301, the issue was as regards the applicability of the Act in two cases where the land was used principally for business. According to this decision, if the land was not principally let for business or trade, the Act itself could not be applicable and the jurisdiction of the Rent Controller or the Appellate Authority to entertain the ejectment application in respect of such property would be barred. The decision of the Gujarat High Court held in Rajnagar Club, Porimal Society Vs. Parimal Co-operative Housing Society Ltd. 1994(1) RCR (Rent) 22 that if activities of a club to which a property is let out is only for playing cards and celebration of certain festivals, catering certain food-stuffs to its members, it could hardly be said to be an activity of business. It was again a case where a suit had been instituted against a club when a club was trying to contend for a position that its activities part took the nature of business and relying on the decision of Hon'ble Supreme Court in Haji Ismail Valid Mohamad's case (supra) held that the activities of a club could not partake the character of business and hence it was only the Civil Court which was competent to entertain Civil Revision No.2531 of 1994 (O&M) -11- the suit. (iv) Scope of Full Bench ruling on expression business 13. Learned counsel appearing for the landlord relies on the decision of a Full Bench of this Court in The Model Town Welfare Council Ludhiana Vs. Bhupinder Pal Singh 1971 (LXXIII) PLR 734 which according to him squarely governs the issue. The reference of the Division Bench for constitution of a Full Bench was in relation to a lease of land to a society free of cost for construction of a library building thereupon at its own cost. One of the aims of the society itself was to recognize libraries. The Division Bench made the reference of a question whether the requirement of "rented land" by the society for construction of a library building was covered under Section 13 (3) (a) (ii) of the East Punjab Urban Rent Restriction Act. It could be seen in this case that the land had been transferred by the Government to a society subject to certain conditions by the Government that the property would be used in a particular manner. The construction had not been taken in hand immediately due to lack of funds and a vacant part of the plot was let out to a private individual for running a fuel and coal stall with a condition that the property would be returned to the society when it was required by it. That portion of the vacant land, which was given to the private tenant was sought to be vacated by the society for its own personal requirement for establishing a library. It should again be noticed from the judgment that the vacant land which had been rented out to the tenant was itself conceded by both parties as coming within the definition of "rented land". After all the private tenant had his own Civil Revision No.2531 of 1994 (O&M) -12- business and the question that was considered by the Division Bench and which was referred to a Full Bench was never on an issue whether the land in question was "rented land" or not. The point of reference, however, was that since the society was seeking for ejectment of the "rented land" for its business for running a liberty, was such a requirement bona fide? The consideration whether library activity was business was taken up to test the issue of bona fides and the nature of land that had been rented out itself was not in question. While answering the reference, the Full Bench had ruled that the expression business was not a word of art and it should be taken in the wider sense and not in the narrow sense. As per the ruling, the word "business" was not necessarily to be understood as an expression of commercial business carried on with profit motive. The word would include within its scope a charitable business or a dealing in the interest of public or a section of the public. The scope of the word business in the provisions of the Act was not controlled or coloured by the word "trade" occurring along with it in Section 2(f) of the Act. Whereas every trade would be business, the reverse of it would not be true. Business is a genus of which commercial and non-commercial business and trade are some of the species. (v) Full Bench reference did not examine any dispute regarding "rented land" 14. The reference to the decision of the Full Bench of this Court will have no relevance to this case except to understand the concept of the term "business" itself which need not be confined only to commercial activity that it could be even a charitable activity. Other than this, the Full Bench was not deciding the issue of a contest on Civil Revision No.2531 of 1994 (O&M) -13- whether a property in dispute came within the definition of "rented land" or not. As pointed out already both parties had conceded the jurisdiction of the Court and had also conceded that the property was a "rented land". The definition of the business was again considered in the context of examining the bonafides of the landlord for its own business use of starting a library. In this case, however, the issue is whether the property rented out came within the definition of "rented land". The crucial issue is whether the activity of a club which was by its conduct seen as erection of pavilions and stalls for public use for sports activity and recreation and by the Municipality for similar purposes could be said to be for business or trade. (vi) Club activities shall not mean business 15. The activities of the respondents for recreation or public use by sinking tubewell could hardly answer the definition of either trade or business. While trade would normally involve some activity for profit, business itself may not be necessarily for profit. It could even be charitable as pointed out by the Full Bench of this Hon'ble Court but a pure recreational activity of a club as observed by the Hon'ble Supreme Court in Haji Ismail Valid Mohamad's case (supra) and found by the decisions of the Assam and Gujarat High Courts referred to (supra) could never be said to be a business activity. 16. Halsbury, 4th Edn. (Vol.27, para 325, p.273) defines business as follows:- "The word "business" extends the convenant to all cases where work, involving the recourse of numerous persons to the premises, is done for payment, or even without payment Civil Revision No.2531 of 1994 (O&M) -14- where the result is in effect the same as if a charge were made. The making of profit is not essential to constitute a business; nor, on the other hand, does payment necessarily constitute one." 17. The Hon'ble Apex Court explained the expression "business" as follows:- "Business connotes some real, substantial and systematic or organised course of activity or conduct with a set purpose." Narain Swadeshi Mills Vs. Commissioner of Excess Profits Tax, AIR 1955 SC 176. The 'business' referred to is commercial business. The Government is engaged in huge commercial projects and so far as such activities are concerned (e.g. transport by land, air or sea) it cannot be said that the Government is not carrying on business. In its commercial ventures the Government is entering into contracts with citizens. These contracts are governed by the ordinary law of the land. The word 'business' is of large signification, and in its broadest sense includes nearly all the affairs in which either an individual or a corporation can be actors. The word 'business' has been held to denote an activity with the object of earning profit.