IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN THURSDAY, THE 13TH AUGUST 2009 / 22ND SRAVANA 1931 RCRev..No. 299 of 2006(A) ---------------------------------- RCA.16/2001 of D.C & SESSIONS COURT,TRIVANDRUM RCP.92/1998 of Rent Control Court,TRIVANDRUM .................... (S): REVISION PETITIONER --------------------------------------- V.S.ABDUL KARIM, PROPRIETOR, CREATIVE ENTERPRISES, 82/10, BADRIKESWAR BUILDING, PATAN, JAIN MANDAL MARINE DRIVE, BOMBAY-300 002. BY ADV. SRI.P.V.CHANDRAMOHAN RESPONDENT(S): ----------------------- PADMASREE HOTELS (P) LTD., REGISTERED OFFICE 'HOTEL HORIZON', ARISTO ROAD, THIRUVANANTHAPURAM, REP. BY ITS DIRECTOR SURESH M.PILLAI, "AASHINA", HILL GARDENS, PATTOM.P.O., THIRUVANANTHAPURAM-4. ADV. SRI.L.MOHANAN THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 13/08/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: PIUS C KURIAKOSE & K.SURENDRA MOHAN, JJ ------------------------------------------------------------------------ R.C.R.NO.299 OF 2006 -------------------------------- Dated this the 13th day of August, 2009 ORDER Pius C.Kuriakose,J The tenant who has suffered an order of eviction on the ground of additional accommodation under sub section (8) of Section 11 at the hands of the Rent Appellate Authority is the petitioner in this revision u/s.20 Act 2 of 1965. The parties will be referred to respectively as the tenant and the landlord. The landlord's case was that the landlord is a Private Limited Company and that it is conducting a 3 star hotel by name and style Hotel 'Horizon' at Aristo junction in Thiruvananthapuram, that the tenant is conducting a Travel Agency and recruitment business under the name and style ''Creative Enterprises' in a portion of the ground floor of the Hotel building on the basis of a rental arrangement between the landlord and the tenant, that the landlord requires the premises under the occupation of the tenant for the purpose of providing the requisite infrastructure and to shift the accounts section functioning on the 7th floor of the building. It is necessary to shift the accounts section to the ground floor where the reception lobby is located. It is averred that the landlord had already obtained an order of eviction in respect of the area situated just opposite to the petition schedule building which was let out RCR NO.299/2006 2 to an electronic shop. It was also averred that the landlord has its own travel agency under the name and style 'Padmasree Tours and Travels' and that the same is also presently functioning at the reception counter. There is a bookstall in the hotel which is functioning at the reception counter. The functioning of all these in the reception counter, is causing inconvenience to the customers. The rent control petition was therefore filed seeking additional accommodation quoting the ground under sub section (8) of Sec.11. The tenant resisted the Rent Control Petition contending inter alia that the need and the claim is not bonafide . It was alleged that the Rent Control Petition was instituted only because the landlord was much displeased by the unwillingness on the part of the tenant to oblige to the request for enhancement of the monthly rent which currently is Rs.2500/-. It was alleged that the travel agency claimed to be conducted by the landlord is only a paper agency which does not exist. It was averred that at any rate, the landlord has already secured an order to evict the electronic goods shop on the same ground as projected in the present rent control petition. As the rent control petition was one filed under sub section (8) of Sec.11, it was contended that the hardship which the tenant will suffer, if he is evicted , will be irreparable. It was RCR NO.299/2006 3 also contended that the tenant and his employees are depending on the income derived from the business carried on in the premises for their livelihood and also that no alternate accommodation is available in the locality for shifting the business to. 2. In para 9 statement of the objections it was contended as follows: “The petitioner is a hotel where rooms are given on daily / monthly basis and as such they cannot seek eviction of this counter petitioner”. 3. The Rent Control Court enquired into the Rent Control Petition and at trial evidence on the side of the landlord consisted of Ext.A1 to A7 series and the oral evidence of PWS 1 to 5. On the side of the tenant, the same consisted of Ext.B1 to B12 and the oral evidence of CPW1 Accommodation Controller and CPW2 Manager of M/S. Creative Enterprises. The report submitted by the Advocate Commissioner on the basis of a local inspection was marked as Ext.C1. Ext.X1 produced by the Accommodation Controller was the extract of the Vacancy Register relating to the relevant period. 4. The preliminary point which the Rent Control Court considered was a point which was raised by the tenant regarding the maintainability RCR NO.299/2006 4 of the rent control petition in the context of the contention that the petition schedule building is a room in a hotel. The above point was answered by the Rent Control Court in favour of the landlord relying on the judgment of the Supreme Court in Associated Hotels of India Limited V. R.N.Kapoor (AIR 1959 Supreme Court 1262) and also the judgment of this court reported in 1973 KLT 203 K.Vidyadharan & Another V. M.S. Narayana Pillai (1973 KLT 203). According to the Rent Control Court the purpose of the letting to the tenant was for the purpose of business other than hotel business and hence notwithstanding the situation that the petition schedule building is physically part of a hotel building, the same is not excluded from the purview of the Rent Control Act . On evaluating the evidence which came on record, the Rent Control Court concluded that the need projected by the landlord was one for additional accommodation and that the same was not bonafide. The Rent Control Court did not examine the question of comparative advantage and hardship under the proviso to S.11(10). Denying order of eviction, rent control petition was dismissed in the light of the finding that the need for additional accommodation was not bonafide. 5. On an appeal preferred by the landlord the Rent Control RCR NO.299/2006 5 appellate authority made a thorough re-appraisal of the entire evidence. The appellate authority agreed with the Rent Control Court and held that the Rent Control Petition was perfectly maintainable since the petition schedule premises did not qualify as room in a hotel. According to that authority, the question whether the petition schedule building is outside the jurisdiction of the Rent Control Court because of it being room in a hotel did not even arise on the pleadings raised by the tenant. Nevertheless, the Appellate Authority re-examined the question and concurred with the finding of the Rent Control Court relying on the judgment of the Supreme Court in Associated Hotels of India Ltd., V. R.N.Kapoor. 6. While the matter was pending before the Appellate Authority, it seems that a compromise was arrived at between the parties and an agreement incorporating the terms of the compromise was produced before the court. The appellate authority did not become inclined to receive the above agreement in evidence. Both parties therefore, filed a joint petition requesting that an order of eviction be passed under sub section (8) of Sec.11 granting time to the tenant till 2.6.06 to vacate the premises. Appellate Authority however, took the view that an order of RCR NO.299/2006 6 eviction under sub section (8) of Section 11 can not be passed merely on compromise and since the parties have already adduced evidence in support of their rival contentions the appellate authority was expected to examine the legal and factual aspects of the decision of the Rent Control Court based on the evidence which was available on record. In that view of the matter, the Appellate Authority rejected the joint petition filed by the parties and proceeded to hear the parties and decide the appeal on merits. 7. On re-appraising the evidence, the Appellate Authority concluded that the landlord was successful in proving that the need for additional accommodation projected in the RCP was a bonafide need and that the advantages which the landlords will gain by obtaining possession of the petition schedule building will outweigh the hardship which may be occasioned to the tenant. Thus, reversing the decision of the Rent Control Court, the Appellate Authority ordered eviction under sub sec.(8) of Section 11 of the Act. 11. Assailing above decision of the Appellate Authority the present revision is filed raising various grounds. We have heard the submissions of Mr.P.V. Chandramohan, learned counsel for the revision RCR NO.299/2006 7 petitioner and those of Mr.L.Mohanan, learned counsel for the revision respondent landlord. Mr.P.V.Chandra Mohan at the very outset referred to the relevant portion of the judgment of the Supreme Court in Associated Hotels of India Limited V. R.S.Kapoor. According to him, the business of Travel Agency which is being conducted in the petition schedule premises is hotel business and the same cannot be in dispute since the landlord hotel itself is having their own travel agency unit in the hotel Horison Building. Mr.P.V. Chandramohan would assail the finding of the learned Appellate Authority that pleadings have not been raised by the tenant to the effect that the building is a room in a hotel and hence the Rent Control Petition is not maintainable. Learned counsel relied on the judgment of the Supreme Court in Bachaj Nahar V. Nilima Mandal in (AIR 2009 S.C.1103) to argue that the object and purpose of pleadings is only to ensure that litigants come to trial with all the issues clearly raised and proved . In the instant case where both sides have raised the issue as to whether the petition schedule building is a room in a hotel, the landlord cannot be allowed to contend that for want of proper pleadings prejudice has been caused to the landlord in meeting the contention that the rent control petition is not maintainable since the RCR NO.299/2006 8 schedule building is a room in a hotel. Mr.Chandramohan drew our attention to Ext.A2. According to him, the evidence of PW1 was to the effect that in order to comply with the direction in Ext.A2, Ext.B1 was sent. Counsel submitted that Ext.A2 was received by the landlord only after the Rent Control Petition was instituted. Drawing our attention to Ext.A4 lawyer notice Mr.Chandramohan submitted that the details as set out in Ext.A2 did not find a place in Ext.A4 at all. In Ext.A4 there is only a general statement that the landlord is in dire need of the space occupied by the tenant for “ his own hotel business”. Mr.Chandramohan submitted that the landlord was successful in obtaining possession of the building which was subject matter of RCP No.32/1997 where an electronic shop was conducted. The carpet area of that room is 697 Sq. feet as against the carpet area of the petition schedule room which is only 215 sq. feet. Even if the need of additional accommodation is a genuine one, such need could be accomplished more than sufficiently by utilising the room which was subject matter of RCP No.32/1997. Mr.Chandramohan submitted that apart from that room, the landlord was able to get back the room in which the book shop was previously functioning. Thus the landlord has already secured possession of more RCR NO.299/2006 9 than what was actually necessary for the landlord's purpose. This was the reason why the Rent Control Court relying on the evidence held that the need does not survive. Mr.Chandramohan would assail the findings of the appellate authority regarding the protection of the first proviso to sub section (10) of Section 11. According to him, the proper course to be adopted by the Appellate Authority was to remand the case to the Rent Control Court to enable that court to enter a decision on that proviso. As a result of the course adopted by the Appellate Authority, the tenant has been deprived of an opportunity to prefer an appeal. 8. Mr.L. Mohanan learned counsel for the respondent would resist all the submissions of Mr.V.P.Chandramohan. According to him, the contention that the landlord is a hotel and the landlord is letting out rooms on monthly /daily rental basis will not amount to a contention that the petition schedule building is a room in a hotel and hence the building is outside the jurisdiction of the Rent Control Court. Mr.Mohanan argued that it is not travel agency business that is conducted by the tenant. He would contend that the revision petitioner's main business is recruitment business. The travel agency business is only incidental business. Referring to Ext.B6 counter foil book relating to receipts issued by the RCR NO.299/2006 10 tenant, Mr.Mohanan argued that B6 will reveal that revision petitioner caters to the general public mostly and not to customers to the petitioners hotel. The service rendered by the Revision Petitioner to customers of hotel Horison is very limited. Referring to Ext.B10, B11 and B12 Mr. Mohanan argued that the main business of the tenant was recruitment agency, though general service in connection with travel and tourism was also mentioned in those documents as business carried on by the tenant. Drawing our attention to paragraph 9 of the Rent Control Petition Mr. Mohanan submitted that it is not correct to say that the need projected is that additional accommodation is required for complying with the direction issued under Ext.A2. The need projected is the need to conform to “ the norms of department of tourism”, which were issued much earlier. The details of the need have been given in the Rent Control Petition and stated generally the need is to make up for the insufficiency of infrastructure in the hotel which is a 3 star hotel . It is only a branch office of the revision petitioner, which is functioning in the petition schedule premises. The main place of business of the revision petitioner is on the Marine Drive, Bombay as is clear from the address given in the rent control petition itself. No hardship whatsoever will be RCR NO.299/2006 11 occasioned to the tenant by the eviction since it is in evidence that ever so many other buildings have come up in Thiruvananthapuram to which the tenant's business can be shifted. Mr.Chandramohan submitted that before the appellate authority the tenant conceded that the need projected is a bonafide one and that the hardship which may be sustained to the tenant by order of eviction can be allieviated if the tenant is given time till 30.6.2006 to vacate the premises. Mohanan pointed out that more than three years have elapsed after the expiry of the period sought for by the tenant in the compromise petition. It is inequitable on the part of the tenant to pursue the contentions at this stage. 9. Mr.P.V.Chandramohan submitted that in 2003 in terms of the compromise arrived at between the parties a fresh rent deed was executed between the parties . Thus the rent arrangement on the basis of which the landlord sought to maintain the RCP ceased to exist and hence the proceedings became not maintainable on account of the striking of fresh rental arrangement by the parties. Mr.Mohanan submitted that the execution of a fresh rent deed in respect of the building was only to provide for the period of three years up to 2.6.2006 RCR NO.299/2006 12 the time agreed to by the landlord in the light of the assurance of the tenant that he will give peaceful surrender on 2.6.2006. The tenant who has gone back on his words is not entitled to argue before this court that the eviction proceedings are no longer maintainable and that fresh petition should be filed. 10. We have anxiously considered the rival submission addressed at the Bar. We have carefully gone through the pleadings and the evidence in case. The question is whether the rent control petition is not maintainable due to the reason that the subject matter of premises is a room in a hotel. The judgment of the Supreme Court in Associated Hotel of India Ltd., case has been rendered with reference to the definition given to the term building under the Section 2(b) and Section 7(1) of the Delhi Ajmeer Morwara Rent Control Act. The relevant provision in Section 2 of the statute is actually quoted by the Supreme Court in para 3 of the judgment we re-quoted the same as follows. “ Section 2(b) 'premises' means any building or part of a building which is, or is intended to be, let separately for use as a residence or commercial use or for any other purpose but does not include a room a Dharmasala, hotel or lodging house ”. RCR NO.299/2006 13 The building which is subject matter of the rent control petition is physically a portion of a larger building in which the landlord is conducting hotel business. But the ratio emerging from the judgment of the Supreme Court in Associated Hotels of India Limited V. R.N. Kapoor (AIR 1959 SC 1262) is that for deciding whether a given building qualifies as a room in a hotel so as to be excluded from the purview of the statutory definition of the term building, mere physical integrity with the larger building in which hotel business is carried on will not be sufficient. The business carried on by the tenant in the building should have something to do with hotel business. In the instant case, the evidence will revel that the main business carried on by the tenant is recruitment business and that travel agency business (which can be said to be incidental to hotel business) is only incidental to the main business of the tenant. Exts.P10, P11 and P12 will show that the main business is recruitment business though “general service in connection with travel and tourism” is also mentioned as business carried on by the tenant. The finding concurrently entered by the Rent Control Court and the Appellate Authority that the subject building does not qualify as room in a hotel so as to be out of the purview of rent control proceedings, according to us, is a correct finding RCR NO.299/2006 14 entered applying law correctly to the evidence available on record. The pleadings raised by the tenant will also show that the contention that the rent control petition is not maintainable due to the reason that the building does not fall within the ambit of buildings under the Rent Control Act was not raised specifically. 11. Now we will consider the correctness of the decision entered by the Rent Control Appellate Authority, the final court on facts, regarding the bona fides of the need for additional accommodation and also regarding the question whether the revision petitioner tenant is entitled to the protection of the proviso to sub-section (10) of Section 11, i.e., whether the hardship to be sustained by him on account of the eviction order will outweigh the advantages which the landlord may gain by getting eviction. According to us, the evidence adduced by the landlord clearly shows that the landlord will be able to carry on its business of conducting hotel Horizon, a three star hotel much more conveniently if the petition schedule building is also got surrendered. The infrastructure facilities in hotel Horizon will definitely increase and it will be possible for the landlord to carry on its hotel business more conveniently to its customers and it's own staff. It is apparent from the evidence that what RCR NO.299/2006 15 the revision petitioner is having in the petition schedule building is only a branch office. The main place of business of the revision petitioner is on Bombay Marine Drive. It is in evidence that a large number of buildings have come up in Thiruvananthapuram and if necessary it will be possible for the revision petitioner to identify another building in Thiruvananthapuram for shifting his Thiruvananthapuram business to. Thus the conclusion that the advantages which the landlord will gain by getting eviction will outweigh the hardship to be sustained by the tenant, according to us, is a perfectly correct conclusion. 12. As for the bonafides of the need for additional accommodation, it is trite that the standards for establishing bonafides of a need for additional accommodation are much more liberal than the standards for establishing bona ides of a need under sub-section (3) of Section 11. In the instant case, the Rent Control Appellate Authority which under the statutory scheme is the final court on facts has rightly concluded that the need under sub-section (8) of Section 11 is bona fide and we do not find illegality, irregularity or impropriety warranting invocation of the revisional jurisdiction under Section 20 of 1965. 13. There is another most important point. The authorities under RCR NO.299/2006 16 the Rent Control Act are expected to decide the causes before them in accordance with principles of equity, justice and good conscience. (See sub-rule (8) of Rule 11 of the Kerala Buildings Lease and Rent Control Rules). In this case a compromise was arrived at between the parties during the pendency of the rent control appeal. On the terms of the compromise the revision petitioner agreed that an order of eviction can be passed against him under Section 11(8) and that he need be granted time up to 2-6-2006 for surrendering the premises peacefully. It was not at all equitable on the part of the revision petitioner to have gone back on that compromise. The fact remains that by agreeing to surrender the building by 2-6-2006 for the purpose of paving the way of the landlord getting possession of the petition schedule building for the purpose of accomplishing the need projected in the RCP, the tenant revision petitioner conceded that the need is a reasonable and genuine one. At any rate, we don't find any reason for interfering with the Appellate Authority's finding that the need for additional accommodation is bona fide. In fact, the revision petitioner went to the extent of arguing before us that since a fresh lease deed was executed in the context of the compromise arrived at by the parties the rent control proceedings have RCR NO.299/2006 17 ceased to be maintainable. We are not even prepared to entertain this argument since the execution of that lease deed itself was to facilitate implementation of the agreement by the revision petitioner that he will surrender by 2.6.2006, an agreement which he never honoured. 14. The result is that we confirm the order of eviction of the Rent Control Appellate Authority. However, considering the last submission of Mr.Chandramohan that a reasonably long period be given to the revision petitioner to surrender the premises, we are inclined to direct the execution court not to effect delivery of the petition schedule premises in favour of the landlord till 31.12. 2009 provided the following conditions are fulfilled. 1. The Revision petitioner pays the rent which fallen due to the landlord in respect of the petition schedule premises from the date of institution of the Rent Control Petition till the date, at the agreed rate of rent less amount if any paid during the pendancy of the rent control proceedings within one month from today and produces receipt before the execution court. 2. The proprietor of M/S.Creative Enterprises will file an affidavit before the execution court within one month from today undertaking RCR NO.299/2006 18 to give peaceful surrender of the petition schedule premises to the respondent on or before 31st December 2009. It is made clear that the revision petitioner will get the benefit of time granted under this judgment only if both the conditions are satisfied. PIUS C. KURIAKOSE, JUDGE K. SURENDRAMOHAN, JUDGE pm RCR NO.299/2006 19 The building which is subject matter of the rent control petition is physically a portion of a larger building in which the landlord is conducting hotel business. But the ratio emerging from the judgment of the Supreme Court in Associated Hotels of India Limited V. R.N. Kapoor (AIR 1959 SC 1262) is