RSA No.54 of 2009 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** RSA No.54 of 2009(O&M) Decided on: 21.09.2010 **** Devender Kumar Yadav . . . .Appellant Versus Ravinder Kumar Sanghi . . . .Respondent **** CORAM: HON’BLE MR.JUSTICE RAKESH KUMAR JAIN **** Present: - Mr.Jai Vir Yadav, Advocate for the appellant. Mr.B.R. Mahajan, Advocate for the respondent. **** RAKESH KUMAR JAIN, J. By this common order, I shall be disposing of two appeals bearing RSA No.54 of 2009 titled as “Devender Kumar Yadav Vs. Ravinder Kumar Sanghi” and RSA No.482 of 2009 titled as “Jai Singh Yadav Vs. Ravinder Kumar Sanghi” because the question of law and facts are identical in both the appeals which are filed by the defendant against judgment and decree of the learned Courts below by which suits filed by the plaintiff/landlord, who is common in both the cases, for possession of the shops in dispute, has been decreed along with arrears of rent of `2740/- w.e.f. 01.11.1995 to 29.02.1996 and interest on the said amount @ 9% per annum till recovery. The plaintiff was also held entitled to mesne profit for unauthorized occupation of the RSA No.54 of 2009 - 2 - disputed shop @ `685/- per month w.e.f. 01.03.1996 till vacation of shops by the defendants. In order to appreciate the controversy involved in both the appeals, the few necessary facts are required to be noticed which are extracted from RSA No.54 of 2009 titled as “Devender Kumar Yadav Vs. Ravinder Kumar Sanghi”. According to the plaintiff, he leased out shop in dispute to the defendant on a monthly rent of `685/- w.e.f. 01.01.1988. He claimed that the shop in question was newly constructed after getting the site plan sanctioned from the Municipal Committee and is not covered under the provisions of the Haryana Urban (Control of Rent & Eviction) Act, 1973 (for short ‘the Act’) in view of Section 1(3). The plaintiff, therefore, terminated the tenancy of defendant w.e.f. 30.09.1995 by serving a notice upon him under the general law. It was alleged that defendant had given an assurance to vacate the shop (demised premises) but despite several notices, the vacant possession was not handed over, therefore, the plaintiff filed the present suit in the Civil Court. In reply, the defendant besides denying the rate of rent also denied relationship of landlord and tenant. The validity of notice issued under Section 106 of the Transfer of Property Act, 1882 was also assailed on the ground that it is not in accordance with law and the tenancy has never been terminated. The plaintiff filed the replication to contradict the averments made in the written statement and reiterated the stand taken in the plaint. Due to the variations in the RSA No.54 of 2009 - 3 - pleadings of the parties, following issues were framed by the learned Trial Court: - “1. Whether the plaintiff is owner of the suit property as alleged? OPP 2. Whether the defendant has not tendered the arrears of rent since 1.1.1998 of three months i.e.675/- as rent plus `10/- as house tax per month? OPP 3. If issue Nos.1 and 2 are proved then whether the plaintiff is entitled for the decree of possession by way of ejectment of the defendant as alleged? OPP 4. Whether the plaintiff has got no locus-standi to file the present suit? OPP 5. Whether the suit is bad on account of non- joinder of the necessary parties? OPP 6. Whether the suit is not maintainable in the present form? OPD 7. Whether the plaintiff is estopped from filing the present suit by his own act and conduct? OPD 8. Whether the civil court has no jurisdiction to try and entertain the present suit? OPD 9. Whether the Haryana Urban Control of Rent and Eviction Act, 1973 applies to the parties at suit? OPD 10.Relief.” Both the parties led oral as well as documentary evidence in support of their case. Since, it was the pleaded case of the plaintiff that the shops have been newly constructed, therefore, he led evidence in this regard by examining Ram Kumar (Mason) as PW6, RSA No.54 of 2009 - 4 - who had constructed the shop and also produced on record evidence to prove presence of the labourers by way of copy Ex.PW7/A, Ex.PW7/B and Ex.PW7/C. It was alleged that after getting the site plans (Ex.P2 and Ex.P3) sanctioned from the Municipal Committee, construction was started in the month of September 1987 and was completed in December 1987. The material purchased for the purpose of raising construction was also proved by bills Ex.P8/A & Ex.P8/C. The plaintiff also tendered in evidence rent deed Ex.P1 and the notice issued under Section 106 of the Transfer of Property Act, 1882 dated 28.08.1995 as Ex.P2, Postal Receipt as Ex.P3 and Acknowledgment Ex.P4. He had also produced on record another notice sent to the defendant i.e. Ex. P7, Postal Receipt Ex.P5 and Acknowledgment Ex.P6. The case set up by the plaintiff is that earlier the demised premises was a Hotel known as “Ved Hotel”. Basically, it was a big hall. The two shops were constructed by demolishing half roof of the hall, ground level was raised, walls were demolished and shutters were affixed. It is also the case of the plaintiff that the Eastern wall was not demolished as it was joint wall with the property of his brother. Moreover, there was a chajja over the roof when the hotel was in existence but the same was demolished and after the construction of the shops, the Hotel ceased to exist. It was alleged that it is not merely a case of division of the hall by putting a partition wall rather massive construction was undertaken for creation of two shops which were ultimately let out to both the defendants. RSA No.54 of 2009 - 5 - On the other hand, defendant examined Bhola Ram as DW1, who had tendered his affidavit Ex.DW1/A and stated that the shop in question was constructed 33-34 years back and is not a new construction. DW2 Ranjit Lal corroborated the statement of DW1. He examined Ghanshyam Mistri as DW4, who had stated that the shop was constructed by him about 20 years back which was earlier ‘Ved Hotel’. As a matter of fact, the case of the defendant is that with minor alterations the plaintiff has converted the hall into two shops which cannot be termed to be new construction, the premises in dispute is not out of the purview of the act and as such the Civil Suit was not maintainable. After taking into consideration, both oral as well as documentary evidence, both the Courts below recorded a concurrent finding of facts to the effect that the demised premises is a new construction and is covered by Section 1(3) of the Act and as such Civil Court had the jurisdiction to grant the decree for possession. In this Court also the only point raised by learned counsel for the appellant in both the appeals is ‘whether constructing two shops, out of the existing construction after which the old construction ceased to exist, would tantamount to new construction and is exempted under Section 1(3) of the Act”. Mr.Jai Vir Yadav, learned counsel appearing on behalf of the appellant has vehemently argued that by converting the existing structure of Hotel into two shops without pulling down the hotel, the construction would be deemed to be an alteration and not a new construction to attract the provision of Section 1(3) of the Act. To RSA No.54 of 2009 - 6 - support, his submission, he has relied upon decision of the Supreme Court in the case of “Mohinder Kumar Versus State of Haryana” AIR 1986 SC 244, “Anand Prakash Malik Versus Bhagwandas” AIR 1998 SC 2105 and also Single Bench judgment of this Court in the case of “Smt. Parkash Wati etc. of Chhawani Gurgaon Versus Jagdish Chand etc. of Gurgaon Cantt” 1984 Haryana Rent Reporter 496, “Girdari lal etc. Versus Bhag Singh and another” 1984 PLR 747 and “Kartar Chand Versus Shanti Devi” 2000(1) RCR (Rent) 388. On the other hand, Mr.B.R. Mahajan, learned counsel appearing on behalf of the respondent/plaintiff has submitted that if the old construction which was allegedly a big hall, is converted into two shops even by putting partition wall, it would amount to new construction and for that matter the provision of Section 1(3) of the Act shall be fully applicable and the suit filed before the Civil Court for possession was maintainable. In support of his submission, he has relied upon two decisions namely, “Smt. Raj Rani and others Versus Radha Kishan” 1988(2) PLR 212 and “Deepchand and Sons Versus Mohan Das and Another” 1979(1) RCR (Rent) 460. I have heard learned counsel for the parties and have perused the record with their assistance. Before adverting to the legal submissions made, it would be worthwhile to refer to relevant provisions of the Act, which are thus: - “1. Short title and extent.—(1) This Act may be called the Haryana Urban (Control of Rent and Eviction) Act, 1973. RSA No.54 of 2009 - 7 - (2) It shall extend to all urban areas in Haryana but nothing herein contained shall apply to any cantonment area. (3) Nothing in this Act shall apply to any building the construction of which is completed on or after the commencement of this Act for a period of ten years from the date of its completion. 2. Definitions.—In this Act, unless there is anything repugnant in the subject or context— (a) “building” means any building or a part of building let for any purpose whether being actually used for that purpose or not, including any land, godowns, out-houses, gardens, lawns, wells or tanks appurtenant to such building or the furniture let therewith or any fittings affixed to or machinery installed in such building, but does not include a room in a hotel, hostel or boarding house.” Now the other thing which is required to be mentioned is as to what was the extent of construction. Admittedly, earlier there was a hall which was in a dilapidated condition. The wooden doors of the hall were already broken. The floor level from the road was raised by 2 feet. A part of the roof was replaced. Eastern and Northern walls were kept intact whereas remaining walls were newly constructed. The levels of the doors were also raised by placing guarder. There was a gallery on the Eastern side which was included in the shops. Iron shutters were installed and the erstwhile Hotel was entirely converted into two shops and its old construction became non-existent. It is also a RSA No.54 of 2009 - 8 - fact that after the creation of the shops, the same were let out for the first time to the defendants and in their rent note it was mentioned as new construction. In the aforesaid facts and circumstances, it is to be examined by this Court as to whether the construction of the demised premises is a new construction or the old construction has been refurbished. Learned counsel for the appellant has referred to a decision of the Supreme Court in the case of Mohinder Kumar (Supra). In that case, the constitutional validity of exemption granted under Section 1 (3) of the Act was under challenge. The Supreme Court had held that the provision of Section 1(3) of the Act came into being by way of amended Act of 1978 (Act 16 of 1978) and it was held to be intra vires to the Constitution of India on the ground that it has a rational basis and a clear nexus with the object to be achieved. The following observations were made by the Supreme Court in this regard: - “It will be proper to encourage construction of new buildings, as construction of new buildings will provide more accommodation, easing the situation to a large extent, and will ultimately result in benefiting the tenants. As in view of the rigours of Rent Control Legislation, persons with means may not be inclined to invest in construction of new houses, the Legislature to attract investment in construction of new houses may consider it reasonable to provide for adequate incentives so that new constructions may come up. It is an elementary law of economics that anybody who wants to invest his money in any venture will expect a RSA No.54 of 2009 - 9 - fair return on the investment made. As acute scarcity of accommodation is to an extent responsible for the landlord and tenant problem, a measure adopted by the Legislature for seeking to meet the situation by encouraging the construction of new buildings for the purpose of mitigating the hardship of tenants must be considered to be a step in the right direction. The provision for exemption from the operation of the Rent Control Legislation by way of incentive to persons with means to construct new houses has been made in Sec. 1 (3) of the Act by the Legislature in the legitimate hope that construction of new buildings will ultimately result in mitigation of the hardship of the tenants. Such incentive has a clear nexus with the object to be achieved and cannot be considered to be unreasonable or arbitrary. The exemption for a period of 10 years from the operation of the Act allowed to buildings, the construction of which commenced or was completed on or after the date of commencement of the Act, is fair and reasonable. It is for a definite period and that period of exemption cannot be considered to be too long; and this exemption, the Legislature may be of the view, will serve the purpose of encouraging the construction of new buildings. It is for the Legislature to decide the period of exemption that may be allowed and to fix the date from which the period of exemption should run. This will ordinarily be a matter of Legislative police and this Court will not RSA No.54 of 2009 - 10 - normally interfere unless the Court is of the opinion that the period of exemption or the date from which the exemption is to operate is unreasonable and arbitrary. The classification of buildings with reference to the date of commencement of the Act namely, buildings constructed before the commencement of the Act and buildings the construction of which was completed on or after the date of the commencement of he Act, has a rational basis and has a clear nexus with the object to be achieved. For the purpose of achieving the object and encouraging the construction of new houses with a view to ameliorate the hardship of the tenants by removing the scarcity of accommodation, the classification of the landlord and the tenant of a house constructed before the commencement of the Act and the landlord and tenant of a house, the construction of which commences or is completed on or after the commencement of the Act, is clearly founded on an intelligible differentia which has a rational relation to the object and this classification does not result in any invidious discrimination between the classes of landlords and tenants so classified. This classification is not arbitrary and is not violative of Art.14 of the Constitution.” In the case of Anand Parkash Malik (Supra) the question was as to whether the period of exemption is to be reckoned from the date of completion of the construction or from the date of notification by which exemption has been granted. In the said case, the notification RSA No.54 of 2009 - 11 - issued by the Government of Haryana on 22.10.1971 was in question. The said notification is as under: - "Notification No. 5601. S.T.A. 71/30701 -In exercise of power conferred by Section 3 of East Punjab Urban Rent Restriction Act, 1949 (East Punjab Act 3 of 1949) the Governor of Haryana hereby exempts every building constructed during the year 1968, 1969, 1970 from the provisions of said Act for a period of 5 years from the date of its completion. A plain reading of the Notification shows that exemption from the provisions of the Rent Act has been granted to buildings constructed during 1968, 1969 and 1970 for a period of five years from the date of its "completion". It is not disputed and as a matter of fact it has been held by all the three courts below that the premises in dispute were constructed a new in December, 1968. Therefore, the period of exemption of five years from the provisions of the Rent Act pursuant to the Notification dated 22nd October, 1971 has to be reckoned from the date of completion of the construction and not from the date of the Notification. The building was constructed in December, 1968. The period of exemption, as such, expired in December,1973. Thus exemption from the provisions of the Rent Act was not available on 30th March, 1976, when the civil suit for eviction was filed. Since, the provisions of the Rent Act were applicable to the building in question on the date when the suit for eviction was filed, the eviction of the tenant could only be sought RSA No.54 of 2009 - 12 - under the provisions of the Rent Act and on the grounds as contained therein. Recourse to a civil suit under the General laws for seeking eviction of the tenant was not permissible. The learned Single Judge fell in complete error in ignoring this vital aspect of the case.” As a matter of fact, the aforesaid two cases of the Supreme Court, which have been relied upon by the learned counsel for the appellant, do not advance his case rather the reason mentioned in the case of Mohindra Kumar (Supra) is that if the old building is converted into new building, more space is created for accommodating the tenant as the acute scarcity of the accommodation has been largely felt, therefore, it was found to be a mitigating circumstance and for that exemption from the provisions of the Act was found to be justified. Insofar as Single Bench judgments referred by learned counsel for the respondent are concerned, I will deal with all the judgments one by one. In the case of Smt. Parkash Wati (Supra), the Court had dismissed the second appeal filed by the plaintiff/landlord on the ground that the said plaintiff had carried out large scale alterations on the ground floor of the building where she had built disputed shops by making necessary alterations in the rooms and the varanda because the back wall of these rooms and the roof was allowed to remain intact and the plaintiff redesigned the dimensions of the shops by building the front walls and the intervening walls of the shops. From the reading of the facts noticed in the judgment, it is apparent that the RSA No.54 of 2009 - 13 - plaintiff in the said case had “redesigned the dimensions of the shops by building the front walls and the intervening walls of the shops”. It appears that shops were already in-existence and without changing the back wall and the roof, the dimensions of the existing shops were re- designed by building the front walls and the intervening walls as a result of which the plaintiff in the said case, has created a shopping centre. This judgment is totally inapplicable to the facts and circumstances of the present case because in the present case, by virtue of the construction, the previous construction had ceased to exist after giving birth to new premises which are let out as shops to the defendants for the first time. In the case of Girdari Lal etc. (Supra), the tenant/defendant was in second appeal, who was ordered to be ejected. The plaintiff had alleged that the defendant had taken on rent three newly constructed shops but the Court had found that only the frontal portion (34’ x 20’) was newly constructed and the back portion of the shop to the extent of 20’ remained the old construction. The Court had found that “the evidence of the parties is, thus, consistent to the effect that out of the total area of the shops in dispute, the only area measuring 20’ x 32’ was newly constructed area on the front side of the shops while the remaining portion also measuring 20’ x 32’ is old construction”. It also found that “It is not disputed that the tenancy is one, including both the portions, i.e. the old as well as new. Once, it is so found then where a part of the premises was constructed during the period of exemption under the notification and the rest already existed, RSA No.54 of 2009 - 14 - and the whole is let out to a tenant, the building will not be protected by the notification.” In these circumstances, it was held that where both new and old portions given on rent to the tenant the entire building shall be deemed to be old building and would not come within the definition of Section 1(3) of the Act. To my mind, this judgment is also not applicable to the facts and circumstances of the present case. The old building namely, Ved Hotel completely became non-existent after the creation of new building namely, the demised premises and was let out to the defendants vide rent note (Ex.P-1). The last judgment relied upon by the learned counsel for the appellant is in the case of Kartar Chand (Supra). This judgment is relied upon by learned counsel for the appellant to show that where the roof and walls of the shop is demolished and reconstructed then it would not be a case of repairs but a case of construction of a new building. On this analogy, he has submitted that in the present case since roof and walls have not been demolished, therefore, they cannot be termed to be new building. I am afraid that this judgment is also not applicable to the facts and circumstances of the present case. In the said case, the old shop was under the tenancy with the tenant, who surrendered his tenancy for the purpose of reconstruction. The landlord demolished the old shop and constructed a new shop and let it out to the same tenant on different terms (i.e. rate of rent). In these circumstances, the Court had held that it was a case of new construction. RSA No.54 of 2009 - 15 - After considering all the judgments cited by learned counsel for the appellant, I have found that none of the judgment is of any help to him. Now, the question is as to whether the judgments relied upon by the learned counsel for the respondent answers the question in his favour or against him. In the case of Smt. Raj Rani and others (Supra), almost similar question was involved. The Court had noted down the extent of construction in para 2 of this judgment which reads as under: “2. Plan Exhibit P.2 clearly indicates that intervening walls of rooms already existing, the stair case behind them and the doors fixed in the existing two rooms in front were removed. The internal space becoming available thereby was divided into four shops of similar size, three partition walls were raised inside to give the outer façade a new shape and four shutters were put in front instead of the two doors previously existing.” This Court, relying upon various judgments, including a Division Bench judgment of this Court in the case of “Sadhu Singh Versus District Board, Gurdaspur” 1962 PLR 1, “Rai Bahadur Sewak Ram Trust Society Versus Mokam Chand” 1964 PLR 526, “Gian Chand Versus Shri Chhaju Ram” 1972 Current Law Journal 153 and “Girdhari Lal etc. Versus Bhag Singh and another” 1984 (2) Rent Controller Reporter 587 has given the following reasons: - RSA No.54 of 2009 - 16 - “It was laid down in this