IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN MONDAY, THE 17TH MAY 2010 / 27TH VAISAKHA 1932 RCRev..No. 265 of 2004() ------------------------ RCA.3/2001 OF RENT CONTROL APPELLATE AUTHORITY, KALPETTA RCP.13/1999 OF RENT CONTROL COURT, KALPETTA .................... REVISION PETITIONER(RESPONDENT/RESPONDENT): --------------------------------------------------------------------------------- KERALA SARVODAYA SANGAM KOZHIKODE, REPRESENTED BY SECRETARY, KERALA SARVODAYA SANGAM KOZHIKODE, KHADIGRAM, KOZHIKODE AMSOM DESOM, KOZHIKODE. BY ADVS. SRI.D.KRISHNA PRASAD, SRI.D.NARENDRANATH, SRI.M.HARISHARMA, SRI.T.P.ELDHOSE. RESPONDENT(S): (SUPPLEMENTAL APPELLANTS 2 TO 10/LEGAL REPRESENTATIVES OF DECEASED PETITIONER): ------------------------------------------------------------------------------------------------------ 1. SARA VARGHESE, W/O.LATE P.M.VARGHESE. 2. MARY, D/O.LATE P.M.VARGHESE. 3. P.V.MATHAI, S/O.LATE P.M.VARGHESE. 4. CHINNAMMA, D/O.LATE P.M.VARGHESE. 5. P.V.KURIAKOSE, S/O.LATE P.M.VARGHESE. 6. LISSY, D/O.LATE P.M.VARGHESE. 7. SHAJI P.VARGHESE, S/O. LATE P.M.VARGHESE. 8. LEENA, D/O.LATE P.M.VARGHESE. 9. LIJI, D/O.P.M.VARGHESE. THE RESPONDENTS ARE RESIDING AT PULINAKUZHI HOUSE, MONDAKARA, P.O.THOVARIMALA, NENMENI VILLAGE, SULTHAN BATHERY TALUK. R1 TO R3 & R5 TO R9 BY ADV. SRI.V.RAJENDRAN (PERUMBAVOOR) SRI.GEORGE VARGHESE KIZHAKKAMBALAM THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 15/10/2009, THE COURT ON 17/05/2010 PASSED THE FOLLOWING: Kss C.R. PIUS C. KURIAKOSE & K.SURENDRA MOHAN, JJ. ------------------------------------------------ R.C.R.NO:265 OF 2004 -------------------------------------------------- Dated this the 17th May, 2010. O R D E R SURENDRA MOHAN, J. Whether the benefit of the second proviso to Section 11(3) of the Kerala Buildings (Lease and Rent Control) Act, 1965, (hereinafter referred to as the 'Act' for short) is available to a co- operative society? 2. This is the question that arises for determination in the above Rent Control Revision. The short facts of the case are the following. 3. The Kerala Sarvodaya Sangam, Kozhikode, the tenant of shop room bearing door No: V/442 of Sulthan Bathery Panchayat, is the revision petitioner. The shop room is occupied by the revision petitioner-tenant on a monthly rent of Rs.300/- as per a kychit dated 7-3-1998. Subsequently, the rent has been enhanced to Rs.375/- per month from April 1992. 4. The landlord filed the Rent Control Petition seeking RCR No.265/2004 2 eviction of the tenant under Section 11(2)(b) and Section 11(3) of the Act. During the pendency of the proceedings, the landlord passed away and his legal representatives have been brought on record. They are the respondents. The Rent Control Petition was filed on the allegation that the shop room was bonafide needed by the landlord for his dependent son Mr.Shaji P.Varghese, a diploma holder in Pharmacy who wanted to start a medical shop in the said shop room. According to the landlord, he was unemployed and no other suitable room for starting the medical shop was available in his possession. Though the landlord had requested for vacant possession of the building, the tenant had declined to surrender possession. Therefore, the landlord claimed possession of the shop room together with arrears of rent and interest at the rate of 6% per annum. 5. The petition was contested by the tenant pointing out that the Kerala Sarovdaya Sangam was a society registered under the Societies Registration Act and, therefore, the petition was not maintainable with only the Secretary on the party array. According to the tenant, rent had been paid regularly up to March 1992. Thereafter, the rent fell into arrears only for the reason that amounts had been misappropriated by the then RCR No.265/2004 3 Manager of the Society. Immediately, on coming to know that the rent was in arrears, the entire amount was paid as per cheque. However, since the landlord did not encash the cheque, the rent was still remaining in arrears. 6. The tenant further contended that the shop room occupied by the Society was part of a building having seven shop rooms. Out of the above, three shop rooms were in the possession of the petitioner and his sons, where they were doing business. Apart from the above, there was one shop room in the possession of the landlord that was being kept vacant by him. Therefore, it is contended that the need put forth by the landlord was neither bonafide nor genuine. It was also disputed that the landlord's son was dependent on him for the reason that they had a lot of landed properties, yielding a substantial income. According to the tenant, the 'Khadi Vastralaya' that was being conducted in the petition schedule shop room was the only means of livelihood for the employees thereof. Further, no other suitable shop rooms were available in the locality for shifting the business of the tenant. On the above grounds, it was contended that the landlord was not entitled to get vacant possesssion of the shop room, as claimed. RCR No.265/2004 4 7. The Rent Control Court tried the petition on the above pleadings. Both parties adduced evidence. On the side of the landlord P.Ws 1 and 2 were examined as witnesses and Exts.A1 to A12 documents were marked. For the tenant, R.W.1 was examined as a witness and Exts.B1 to B16 documents were marked. 8. The Rent Control Court, on an evaluation of the evidence in the case found that the landlord's son was dependent on him and that the need that was put forth was genuine and bonafide. However, since the landlord had not produced the best evidence to prove the occupation by another tenant of one of the shop rooms owned by him, that was alleged to be vacant, it was held that the landlord was not entitled to an order of eviction in view of the first proviso to Section 11(3) of the Act. In the above view of the matter, though eviction was granted under Section 11(2)(b) of the Act, eviction on the ground of bonafide need was declined. 9. The landlord challenged the above order of the Rent Control Court, Kalpetta in R.C.P.13/1999 before the Rent Control Appellate Authority, Kalpetta in R.C.A.3/2001. The Appellate Authority, on a re-appraisal of the entire evidence, held that the RCR No.265/2004 5 landlord was entitled to an order of eviction under Section 11(3) of the Act also. According to the Appellate Authority, the shop room alleged to have been in the possession of the landlord was actually in the possession of a tenant. On the claim of the tenant for protection of the second proviso to Section 11(3), the Appellate Authority held that the tenant being a registered society was not entitled to the benefit of the said proviso. The Appellate Authority relied on the decision reported in Tellicherry W. Co-operative Society v. Safiya Beebi Umma {2002(3) KLT 863} to support its finding. Thus, the order of the Rent Control Court declining an order of eviction under Section 11(3) of the Act to the landlord was set aside and an order of eviction was granted on the said ground also. 10. The tenant has filed this revision questioning the correctness of the findings of the Appellate Authority. The counsel for the tenant contended that the need that was put forth by the landlord was absolutely without any bonafides whatsoever. It is contended that the need is only a ruse for eviction. It is also contended that the landlord's son was not dependent on him and that he had independent sources of income for his livelihood. It is further pointed out by the counsel RCR No.265/2004 6 for the landlord that other shop rooms are available in his possession, which could be utilised for starting the proposed medical shop, if he actually wanted to do so. Since such vacant rooms have not been utilised for the purpose, it is only to be presumed that the need put forth was not bonafide. At any rate, it is contended that the tenant was entitled to the benefit of the second proviso to Section 11(3). Though the tenant is a registered co-operative society, it is pointed out that the income from the business conducted in the petition schedule premises was the only source of livelihood for the members of the society. For the above reason also it is contended that the Rent Control Petition was liable to be dismissed. According to the counsel for the revision petitioner, the decision reported in 2002(3) KLT 863 does not lay down the correct law and therefore requires reconsideration. 11. The counsel for the revision petitioner made elaborate submissions on the scope of the second proviso to Section 11(3) of the Act, with the object of substantiating his contention that the benefit thereof was available to artificial persons including a society also. According to the counsel, the word 'his' occurring in the proviso does not restrict the scope of the said provision for RCR No.265/2004 7 the reason that the expression used in the latter portion of the provision is 'such person'. The same word has been again used in the last portion of the Section. It is contended that the words, 'such person' would include artificial persons also. Reliance is placed on the definition of the word 'person' contained in Section 3(42) of the General Clauses Act to contend that the said expression includes artificial persons also. It is further pointed out that Section 2(26) of the Kerala Interpretation and General Clauses Act also includes artificial persons. Apart from the above, the definition of a tenant contained in Section 2(6) of the Act takes in a partnership firm also. Therefore, the words 'such person' in the second proviso would also include artificial persons. If such an extended interpretation is not given, it is contended that Section 11(3) itself would be rendered otiose. The counsel placed reliance on the decision in Haji P.Mamo v. Abdu Rahiman Basha (DB) {1986 KLT 1250} to point out that as per the said decision a partnership firm was held entitled to the benefit of the second proviso. For the above reason, there is a conflict between two Division Bench decisions that required determination and settlement by a larger Bench of this Court. 12. The contentions of the counsel for the revision RCR No.265/2004 8 petitioner are seriously opposed by the counsel for the landlord. It is pointed out by the counsel that the decision reported in 2002(3) KLT 863 laid down the correct law. The second proviso to Section 11(3) was enacted with the object of ameliorating the misery of the impoverished tenant. Only the said person was in the contemplation of the legislature, while enacting the said provision. If artificial persons were allowed to take the benefit of the said provision, that would result in unmerited advantages being enjoyed by the rich and ineligible persons who would remain concealed behind the artificial persons created by them. Further the present Division Bench decision that is sought to be reconsidered, has only followed an earlier Division Bench decision viz., Palghat District Co-operative Bank v. Mohammed Kaleem {1996(1) KLT 247}. Since there is no prayer to reconsider the 1996 decision, it is pointed out that no relief could be granted in the present case. The counsel further points out that the tenant is a society having 64 branches spread over various places, and having 2000 workers who are engaged in weaving khadi clothes. However, in the petition schedule shop room, there were only two employees. In view of the above, it is contended that there is no evidence available to prove that RCR No.265/2004 9 the livelihood of any of the members of the society would be affected by the order of eviction granted in the present case. The burden of proving both the limbs of the second proviso was entirely on the tenant. However, in the present case the tenant has not adduced any evidence to prove that the income from the business conducted from the petition schedule premises was the only means of livelihood of the tenant – society. In the absence of any evidence, it is contended that the tenant was not entitled to any relief even on facts. Therefore, the question of law that is raised, does not arise for determination in the facts of the present case and is therefore, not necessary to be decided at all. According to the counsel for the landlord, the second proviso to Section 11(3) of the Act was applicable only to natural persons. Therefore, he prayed for dismissal of the revision petition. 13. We have heard Adv. D.Krishna Prasad for the revision petitioner and Mr.N.J.Mathews and Mr.George Varghese Kizhakkambalam, Advocates, for the respondents. We have gone through the records of the case in detail and have given anxious consideration to the rival contentions of the parties. 14. As noticed above, the case of the landlord is that his son Mr.Shaji P.Varghese, who is dependent on him has RCR No.265/2004 10 completed his Diploma course in Pharmacy, that he is unemployed and that he wants to start a medical shop in the petition schedule shop room. For the above purpose, he needs vacant possession of the tenanted shop room. The need put forth by the landlord is disputed by the tenant, contending that the same is only a ruse for eviction. It is further contended that the landlord has other properties and shop rooms that could be utilised for satisfying his need, if any. It is also claimed that there are no suitable premises available in the locality for the tenant to shift and that eviction of the tenant would result in depriving the employees of the tenant, of their livelihood. 15. The landlord has examined as PW1, his power of attorney holder to prove his case. Mr.Shaji P.Varghese has also been examined as PW2. According to PW1, the hospital of one Dr.Krishna Das is functioning close to the tenanted shop room. The landlord's son is a person who has passed his Pharmacy course. He is also a bachelor and unemployed. Therefore, according to him, the shop room is bonafide required for starting a medical shop for PW2. One of the main contentions of the tenant is that, another shop room having Door No.V/710 is lying vacant and that the same was vacant on 9.3.1999, the date of RCR No.265/2004 11 filing of the Rent Control Petition. The same contention has been pressed vehemence before us also. In view of the above contention, notice was issued to the Secretary, Sulthan Bathery Panchayat to produce before us the register pertaining to the issue of D&O trading licence in relation to the said shop room. Pursuant to the order of this Court, the Secretary of the Sulthan Bathery Panchayat appeared before us on 17.8.2009 and made available to us the 'Licence and Permission Register' maintained by the Panchayat for the period from 3.2.1996 to 31.3.1998. He has also produced before us the relevant page, page No.55 which contains entry No.423 that relates to the shop room bearing Door No.V/710. The entry shows that one Mr.Siju George is the licensee in respect of the shop room as on 15.10.1997 for conduct of business in Oil Substance. The said document has already been marked as Ext.A13 in this case. Therefore, there cannot be any doubt that the shop room bearing Door No.V/710 was in the occupation of the said person at the time of filing of the Rent Control Petition. In view of the above, the contention of the tenant that the Rent Control Petition has to fail for the reason that the landlord has another vacant room in his possession, has to be rejected. RCR No.265/2004 12 16. The evidence of PW's 1 and 2 have been considered in detail by the Appellate Authority. We are also of the opinion that the evidence of the said witnesses are reliable and sufficient to prove the bonafides of the landlord. The son of the landlord being a young and unemployed youth, there is nothing wrong in the said person, aspiring to start a medical shop of his own. One of the main objections of the tenant was that the shop room bearing Door No.V/710 was lying vacant. However, the above contention has been proved to be without substance, by Ext.A13. Therefore, we affirm the finding of the Appellate Authority that the need of the landlord is bonafide and genuine. 17. The counsel for the revision petitioner has been very vociferous in contending that the tenant should have been given the benefit of the second proviso to Section 11(3) of the Act. The counsel takes serious objection to the manner in which the above aspect of the matter has been dealt with by the Appellate Authority. According to the counsel, the Appellate Authority has simply rejected the said contention on the premise that the tenant being a registered society, was not entitled to the benefits of the said proviso. It is also contended that the decision of this Court that has been relied upon by the Appellate Authority is RCR No.265/2004 13 wrong and liable to be referred to a larger Bench for being reconsidered. The decision that has been so relied upon is Tellicherry W.Co-operative Society v Safiya Beebi Umma (2002(3) KLT 863). 18. Before adverting to the question of law referred to above, it is worth noticing that the second proviso to Section 11 (3) contemplates two essential ingredients, both of which have to be proved by the tenant. The second proviso to 11(3) is re- produced hereunder, for convenience of reference. “Provided further that the Rent Control Court shall not give any direction to a tenant to put the landlord in possession, if such tenant is depending for his livelihood mainly on the income derived from any trade or business carried on in such building and there is no other suitable building available in the locality for such person to carry on such trade or business: 19. The two ingredients that are necessary to be proved for claiming the benefit of the above proviso are : i) That the tenant is depending for his livelihood mainly on the income derived from any trade or business carried on in such building, and ii) That no other suitable building is available in the RCR No.265/2004 14 locality for such person to carry on such trade or business. There cannot be any doubt, in view of the dictum laid down by a catena of decisions on the point that, the burden of proving the existence of both the above ingredients as a pre- condition for claiming the benefit of the above proviso, is entirely on the tenant. 20. In the present case, however, the tenant has not adduced any evidence to discharge the said burden of proof. There is absolutely no evidence available to prove that the tenant is depending mainly on the income derived from the business carried on in the tenanted premises for its livelihood. According to the tenant, if the Society is directed to surrender vacant possession of the shop room, the livelihood of its employees would be affected. At the time of arguments, it has been contended by the counsel for the revision petitioner that it is the livelihood of the members of the Society that would be affected. However, the contention is disputed by the counsel for the landlord by pointing out that, in the deposition of RW1 who is the Secretary of the Society, he has admitted that the tenant-Society is having 64 branches spread over four districts. We have been taken through the deposition of RW1 and we are satisfied that RCR No.265/2004 15 RW1 has testified to the said effect. In view of the fact that the tenant-Society is admittedly having 64 branches, by no stretch of imagination can it be said that any serious prejudice to the livelihood of the members or the employees of the society would follow, if an order of eviction is granted to the landlord. We notice that absolutely no evidence has been adduced by the tenant to prove either of the ingredients in the second proviso to Section 11(3) of the Act. Therefore, the contention of the tenant claiming benefit of the second proviso has to be rejected. 21. According to the learned counsel for the revision petitioner, the reasoning of this court in the decision reported in Tellicherry W.Co-operative Society v Safiya Beebi Umma (2002(3) KLT 863) requires reconsideration. We do not think so, for more reason than one. In the first place, an application of the said decision is not necessary in the present case for the reason that there is an absolute lack of evidence proving either of the ingredients in the second proviso, as already found above. In the second place, we are not satisfied that the reasoning of this Court in the decision referred to by the counsel for the tenant suffers from any error or infirmity necessitating a consideration of the same by a larger Bench. RCR No.265/2004 16 22. In Tellicherry W.Co-operative Society v Safiya Beebi Umma (2002(3) KLT 863), the Division Bench has held that a registered Co-operative Society is not entitled to claim the benefit of the second proviso. In the said case, the Co-operative Society was a sub tenant. After considering the contentions of the Society, this Court has held as follows: “We see no ground to differ from the above observation. Apart from the above, second and third respondents were not able to prove that they are entitled to the benefit of second proviso to S.11 (3). Second respondent did not produce any accounts or evidence to show that is the income earned by him from the business conducted in the above building so as to claim that he is mainly depending upon the income derived from the business conducted in the scheduled building. According to the landlord, he is not doing any business in the building. As far as the third respondent society is concerned, it was deposed by RW3, President of the Society, that members weave the cloths at their houses and at the time of deposing there was no stock in the petition schedule building. Even otherwise, being a registered co-operative society, third respondent cannot claim protection of second proviso to S.11 (3) as held in Palakkad District Co-op.Bank v Mohammed Kaleem (1996(1) KLT 247)” 23. This Court has therefore followed the dictum in an earlier decision, Palakkad District Co-operative Bank v Mohammed Kaleem (1996(1) KLT 247), to reach its conclusion. In the said decision, another Division Bench of this RCR No.265/2004 17 Court considered an identical issue and held that a registered co- operative society was not entitled to the benefits of the second proviso. Speaking for the Bench, T.V.Ramakrishnan, J. has concluded the issue in the following words: “The definition of the word 'tenant' contained in S.2 (6) of the Kerala Buildings (Lease and Rent Control) Act, 1965 would certainly take in both natural and legal persons within its fold as the word 'tenant' has been defined to mean any person by whom or on whose account rent is payable for a building. However, it is important to note that the words defined in S.2 of the Act may have wider or restricted meaning as the context requires. That is clear from the opening words of S.2 of the Act which contains the usual clause “unless the context otherwise requires”. The wording of the proviso would clearly indicate that only if a tenant proves that he is depending for his livelihood mainly on the income derived from any trade or business carried on in the building occupied by him as a tenant, the tenant can take advantage of the protection granted under the second proviso to S.11(3) of the Act. The words 'his livelihood' can naturally have only reference to a natural person and not to an inanimate lifeless legal entity like a Co-operative society or a Company incorporated under the Companies Act. The word 'his' would place the matter beyond any doubt. It can only be a pronoun for a natural person. If legal persons or entities like Companies or Societies registered under the Societies Registration Act and statutory bodies were also comprehended as beneficiaries of the second proviso, the legislation would have certainly used the words 'his or its livelihood' even accepting that there can be livelihood for legal persons or entities”. RCR No.265/2004 18 24. Adv.D.Krishna