IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM SATURDAY, THE 23RD MAY 2009 / 2ND JYAISHTA 1931 RCRev..No. 445 of 2006() ---------------------------------- RCA.173/2005 OF RENT CONTROL APPELLATE AUTHORITY,KOZHIKODE RCP.94/2004 of RENT CONTROLLER AND ADDL.MUNSIFF COURT-I.,KOZHIKODE .................... REV.PETITIONERS/APPELLANTS/RESPONDENTS IN R.C.P: ------------------------------------------------------------------------------------- 1. CHERUVATHOOR JOSE, S/O.KOCHUNNI, DOING BUSINESS AT 10/1033, S.M.STREET, KOZHIKODE. 2. CHERUVATHOOR SIMON, S/O.KOCHUNNI, DOING BUSINESS AT 10/1033, S.M.STREET, KOZHIKODE. 3. CHERUVATHOOR GEORGE, S/O.KOCHUNNI, DOING BUSINESS AT 10/1033,S.M.STREET, KOZHIKODE. 4. CHERUVATHOOR MRS.MARRY KOCHUNNI, W/O.KOCHUNNI, DOING BUSINESS AT 10/1033, S.M.STREET, KOZHIKODE. BY ADV. MR.V.V.SURENDRAN MR.P.M.PADMANABHAN MR.P.A.HARISH RESPONDENT/RESPONDENT/PETITIONER IN R.C.P.: --------------------------------------------------------------------------- PADUVATTU BABURAJAN, S/O.C.K.SANKARAN NAIR, RESIDING AT CHAKKYAR MADAM, KASABA AMSOM AND DESOM, KOZHIKODE TALUK. BY ADV. MR.K.RAMACHANDRAN MR.P.N.SREENIVASAN MR.P.RAMACHANDRAN THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 12/02/2009, THE COURT ON 23/05/2009 PASSED THE FOLLOWING: Rs/ PIUS C. KURIAKOSE & C.K.ABDUL REHIM, JJ ---------------------------------------------------- RCR.NO. 445 of 2006 ---------------------------------------------------- Dated this the 23rd day of May, 2009. ORDER Abdul Rehim, J. The tenants in RCP No.94/2004 on the files of the Rent Control Court (Additional Munsiff-I) Kozhikode, are the revision petitioners . The order of eviction passed under section 11(2)(b) and 11(3) of the Kerala Building (Lease and Rent Control) Act (for short the Act) was challenged by them in appeal, RCA.173/2005, before the Rent Control Appellate Authority (District Judge) Kozhikode. The appellate authority confirmed the order of eviction, and hence this revision. 2. Orders of both the courts below are common orders in two connected cases relating to two adjacent shop rooms, bearing Door Nos. 10/1033 and 10/1032. There is a third room in the building bearing Door No.10/1034. The schedule premises in this case is room bearing No.10/1033. The rent control petition was filed by the respondent/landlord on the ground of bonafide need for own occupation and on the ground of arrears of rent. Eventhough RCR.445/2006 2 eviction is ordered under section 11(2)(b) and 11(3), the revision petitioners confined their arguments only against the order of eviction under section 11(3). There was also no endeavor to press the contention regarding dispute of title of the landlord, which was agitated before the courts below. Hence the issue dealt with in this revision is mainly about the bonafides and genuineness of the need for own occupation. 3. The pleadings with respect to the ground under section 11(3), is narrated herewith in short. The landlord along with his wife Smt.Renuka Devi and one among the former landlords, Sri.Manjeri Krishna Iyer Ganesh, are conducting a joint business in partnership under the name and style "Lucky Detergent and Chemicals" in room No.10/1034, wherein sale of detergents, soaps and other cleaning agents and chemicals is being done. Sale of detergents, soaps and cleaning agents are undertaken on retail basis and sale of chemicals is on wholesale basis. The area now occupied is not sufficient to stock bulk quantities of chemicals, therefore the whole sale business could not be done efficiently. Further, the respondent and his wife are jointly conducting a detergent manufacturing unit at their RCR.445/2006 3 residential premisies at Chalapuram, kozhikode. The landlord wants to shift the said manufacturing unit near to the room of 10/1034, because it is convenient for them to run the business from there. He also requires additional space in order to expand the retail business of detergents, soaps and other cleaning agents converting it into a whole-sale business. Hence the landlord bonafide need additional space and hence eviction is sought for with respect to both rooms bearing Nos.10/1033 and 10/1032, for own occupation. It is categorically contended that there is no other building available in his occupation for the said purpose. 4.The tenants disputed the need for bonafie own occupation, stating that they are doing business in stationery wares in the schedule room and the income derived therefrom is the sole means for their livelihood. No other suitable building is available in the locality to shift their business. The need putforth by the landlord is not bonafide. It is contended that room No.10/1034 is remaining closed without any business activity. It is not true that the landlord and his wife along with Sri.Manjeri Krishna Iyer Ganesh is conducting business in RCR.445/2006 4 paprtnership in the said room. The said room is large and spacious enough for the respondent, even if he wants to conduct whole-sale business of Chemicals and detergents. The allegation that the landlord along with his wife is conducting a manufacturing unit at Chalapuram is not true and correct and the allegation that they want to shift the unit is denied. Further contention is that, the building which contaian the scheduled premises is in S.M.Street, Kozhikode which is a busy business place where commencement of manufacturing unit of Chemicals will not be permitted by the authorities concerned. It is alleged that the intention of the landlord is to evict the tenants and to let out the building for higher rent. 5. The rent control petition was tried jointly with RCP No.95/2004. Evidence was recorded in RCP.No.94/2004. The evidence consisted of oral testimony of Pws. 1 and 2 from the side of the landlord and Rws. 1 and 2 from the side of the tenants. Advocate Commissioner was examined as CW1. Exts.A1 to A32 were marked on behalf of the landlord. Exts.B1 to B16 were marked on the side of the tenants. Exts.C1 and C1 (a) are the commission report and sketch respectively. Ext.X1 is RCR.445/2006 5 marked as court exhibit. The trial court found that the alleged manufacturing unit is only a proprietory concern of the wife of the landlord, and there is no proof for partnership of landlord in the said business. Therefore it is held that the need projected for shifting of the said business cannot be granted, especially when there is no plea regarding dependency of the wife. But it is found that the need projected for expansion of the business which are now being conducted in room No.10/1034 is genuine and hence ordered eviction under section 11(3). The appellate authority confirmed the said finding. 6. Heard Advocate P.A.Harish, learned counsel appearing for the revision petitioners and Advocate K.Ramachandran, learned counsel for the respondent, at length. The main points argued by the counsel for the revision petitioners can be summarised as follows: PW2, one of the former landlords of the building, got vacant possession of RoomNo.10/1034 through execution of an order of eviction passed on the ground of his bonafide need for own occupation. The said room came into possession of PW2 on 1.8.2002 by virtue of proceedings in EP.No.18/2001. But without occupying RCR.445/2006 6 the said room, PW2 had assigned the entire building to the present landlord. PW2 claims that he is a partner of the alleged business conducted in room No.10/1034. Therefore, the discrepancy between the need projected in the earlier rent control petition filed for getting eviction of Room No.10/1034, and the need projected in the present petition, will reveal that the claim is not bonafide. It is also contended that the report of the Advocate Commissioner will show that the space available in room No.10/1034 is enough and sufficient to satisfy the alleged requirement of the landlord, which is found allowable by the rent control court. Yet another contention of the revision petitioners is that, it is clearly brought in evidence that room No.10/1034 is lying vacant, remaining closed. There is no pleading in the rent control petition to the effect that there is any temporary closure of the business. On the other hand, the pleadings are to the effect that the landlord is conducting business in that room in partnership and it is insufficient for running the business. Eventhough the tenants pleaded and contended in their counter statement that room No.10/1034 is remaining closed, there has been no replication by the landlord. RCR.445/2006 7 The revision petitioners are seriously disputing the contention that the business which was conducted in room No.10/1034 has been temporarily shifted to the house of the landlord at Chalapuram. From the evidence on record, especially the report of the Commissioner, it is clearly discernible that no activity or any sort of business is being conducted either at room No.10/1034 or at the residence of the landlord at Chalapuram, is the contention. It is contended that whatever articles seen stored at Chalapuram, at the time of the Commission inspecption, was only stage managed to create a camouflage in order to mislead the Advocate Commissioner. 7. Learned counsel for the revision petitioners have filed an affidavit before this court narrating certain new facts. The said affidavit is filed along with I.A.No.1325/2008 seeking to accept the affidavit and to consider its contents as subsequent events. Through the said affidavit, the revision petitioners have brought to the notice of this court two aspects. One is that Room No.10/1032, with respect to which RCP 95/2004 (RCA.179/2005) was fileld, came into vacant possession of the landlord subsequent to dismisisal of the rent control appeal. Eventhough RCR.445/2006 8 order of the appellate authority was a common order in both cases, only the revision petitioners have approached this court. According to the revision petitioners the tenant of that room has been somehow won over by the landlord and the loandlord got possession of the room. It is alleged in the affidavit that inspite of getting vacant possession, that room is now kept vacant, along with Room No.10/1034. In the affidavit it is further averred that the landlord had already agreemented for sale of the entire building, containaing all the three rooms, to one Sri.Koya from Mathottam and the landlord had already received substantial amount by way of advance. The submissiosn of the revision petitioners is that, the above said two aspectps are subsequent events having material impact on the bonafides and genuineness of the need projected. Therefore this court has to take note of those matters to deny relief to the landlord. 8. The tenant had filed detailed counter affidavit refuting the allegations in IA.1325/2008. It is conceded that he got vacant possession of Room No.10/1032. But the ocntention is that both the rooms, bearing Nos.10/1032 and 10/1033, are required for the need of additional space for expansion of the RCR.445/2006 9 business conducted in Room No.10/1034, and also for shifting of the business of the manufacturing unit. The allegation regarding the alleged sale to Sri.Koya of Mathottam is also denied. 9. Counsel for the revision petitioners urged that, it is incumbent on the part of the revisional court to evaluate the factual situation based on the subsequent events, as against the need which is projected and proved. In other words, the contention is that this court should take note of the fact as to whether the petition schedule building is also required for accomplishing the need for expansion or diversification of the business alleged to be conducted in room No.10/1034. The revision petitioners are also attacking the factual findings arrived by the courts below regarding the alleged need of the partnership, based the report of the Advocate Commissioner and other circumstancnes. A further contention is that the need for expansion of the business projected, can be agitated only under section 11(8) and not under section 11(3). In such case the courts below ought to have considered the comparative hardships, is the contention. Therefore counsel for the revision petitioners submits that the eviction order concurrently passed by RCR.445/2006 10 the courts below under section 11(3) is liable to be revered. 10. Counsel for the respondent while supporting the findings of the courts below ordering eviction based on the need for expanding and diversifying the business activity conducted in Room No.10/1034, is also attacking the findings with respect to denial of the need for shifting of the manufacturing unit from Chalapuram to the schedule building. According to him, the findings to the effect that the wife of the landlord is the sole proprietorix of the said business, is not factually correct and has no support of the evidence on record. Further it is urged that, even assuming that the manufacturing unit is owned exclusively by the wife, still eviction could have been ordered for the purpose of shifting the said business, treating the need as that of a dependent family member. Hence according to the respondent/landlord the findings of the courts below in this regard need reconsideration and reversal. 11. For an ananxious consideration of the rival contentions on both sides, we had perused the records of the courts below. The need for own occupation projected in the petition is three folded. RCR.445/2006 11 (1) There is shortage of space for the business of sale of detergents, soaps and other cleaning agents conducted on retail basis and the sale of chemicals conducted on wholesale basis, in room No.10/1034. (2) The manufacturing unit conducted at the residential premises of the landlord and his wife at Chalapuram, need be shifted to accommodate the same near to the present business premises, becuase the landlord and his wife finds it inconvenient to run the same at a place far away, for which room Nos.10/1032 and 10/1033 need be made available. (3) The landlord idntends to conduct wholesale business of detergents, soaps and other cleaning agents which are now carried out only on retail basis. The landlord also intends to expand the said business by starting agency of several new branded goods of well known reputed companies, for which additional space for storing their products is needed. 12. We have also perused Ext.C1 report of the Advocate Commissioner. It is stated in the report that room No.10/1034 is remaining locked. But small quantities of chock powder, one bag of 'Dolomate' and certain chemicals were seen stored RCR.445/2006 12 therein. According to the report, room No.10/1034 contains four distinct parts separated through partition walls and doors. The report of the Commissioner specifically says that there is storage and trade in products being conducted at the residential house bearing room No.19/1875 and in the adjacent room bearing No.19/1875A and the said business could not be conducted in room bearing No.10/1034. The reason for such a finding is also explained by the Commissioner. It is stated that at present there is storage of about 100 tins of 50 liter capacity, 20 bags of 'Dolomate' chemical powder, Barrels of castic soda and liquid soap, 50 bags of soap powder etc. According to the report, the landlord is intending large scale storage of raw-materials and to have production and trade, and it is insufficient to conduct an activity of such a magnitude in room No.10/1034. The oral evidence on both sides are supportive of their respective contentions. Under the above circumstances an evaluation of merits of the rival contentions based on the subsequent events, is highly necessary. 13. The need projected is a cumulative requirement to accomplish three specific purposes. The space in both the RCR.445/2006 13 rooms bearing Nos.10/1032 & 10/1033, are said to be required for satisfying all the three specific needs. One among the needs projected is shifting of the manufacturing unit. The need in this respect was not found allowable. There is concurrent findings that the manufacturing unit is owned by the wife of the landlord. It is vehemently contended by the counsel for the respondent that the said finding is factually incorrect. But relying on the documents Exts.A17, A18, A19 and A20 series and A32, both the courts concurrently found that all records pertaining to the said business indicate that the manufacturing unit is a proprietory concern in the name of the landlord's wife. We find no reason to interfere with the findings on fact in this regard. The contention of the respondent is that, inspite of that finding the need could have been considered as a need of the dependent family member of the landlord. But it is trite law by this time that, there should be specific pleadings and proof regarding the dependency of the family member for the purpose claiming bonafide need for own occupation. There is total lack of pleadings and evidence in this regard. Hence we do not find any reason to interfere with the findings in this sregard. RCR.445/2006 14 14. The next question arising for consideration is whether the petition schedule room is needed for expansion of the existing business, i.e. for retail sale of detergents, soaps, cleaning agents and wholesale of chemicals. Even though there is vehement contention from the side of the tenants that there is no such activity conducted in partnership under the name and style as "Lucky Detergent and Chemicals" , it has come out in evidence through records and Ext.C1 report that business of storage and dealing in these items is being conducted from the residential building. But the question which has to be decided is as to whether there is additional requirement of space for storage of these items, and as to whether the space available at room No.10/1034 is insufficient. But there is total lack of details available in this regard as to how much is the volume of business. How much is the quantity which can be stored in the present room. How much quantity need be stocked further etc. In this regard we find force in the argument of the revision petitioners that the need for expansion of the existing business is a ground which will fall only under section 11(8) and not under section 11(3). But the courts below has not considered this RCR.445/2006 15 aspect. 15. The third need projected is for conversion of the retail business of detergents, soaps and cleaning agents into whole sale business and also for getting of new agencies for new items to be dealt with. But there also lack of evidence regarding details of the new products, quantity to be stocked, volume of space required etc. The above narrated two distinct needs and the requirement of space for those needs has to be evaluated, bearing in mind of the subsequent event that the landlord had came into possession of room No.10/1032. So the ultimate question which is to be decided is whether the space available under room No.10/1034 along with room No.10/1032 will serve the need for additional space required under the above narrated circumstances. In fact both the courts below has not gone deep into these aspects and have not made any objective consideration of the same. Under these circumstances, the findings with respect to the needs projected, except the need for shifting of the manufacturing unit, requires reconsideration. 16. In the result, the order of eviction passed by the Rent Control Court (Additional Munsiff-I),Kozhikode in RCR.445/2006 16 RCP.No.94/2004, under section 11(3) of the Act, which is confirmed by the Rent Control Appellate Authority (District Judge),Kozhikode in RCA.No.173/2005 is hereby set aside. The case is remanded to the Rent Control Court for fresh disposal. Parties should be afforded with opportunity to adduce additional evidence. The Rent Control Court has to decide the matter afresh bearing in mind the observations made herein and after considering the evidence, both existing and to be adduced. Considering the fact that the Rent Control Petition is of the year 2004, all earnest endeavour should be made by the Rent Control Court to have a disposal of the case as early as possible, at any rate within a period of four months from the date of receipt of a copy of this judgment. The registry is directed to transmit the records along with copy of the judgment to the Rent Control Court, forthwith. The revision petition is disposed of accordingly. PIUS C.KURIAKOSE,JUDGE C.K.ABDUL REHIM, JUDGE pmn/ RCR.445/2006 17 R E C E I P T RCR.445/2006 18 Received from the Registrar General, High Court of Kerala, a sum of Rs.8,546/- (Rupees Eight Thousand Five Hundred and Forty Six only) towards petrol charges for the month of April, 2009. 19.5.2009. (JUSTICE C.K.ABDUL REHIM)