IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 19TH FEBRUARY 2009 / 30TH MAGHA 1930 RCRev..No. 204 of 2007() ------------------------ RCA.37/2006 OF RENT CONTROL APPELLATE AUTHORITY ( II ADDL. DISTRICT COURT), TRIVANDRUM RCP.31/2004 OF RENT CONTROL COURT,TRIVANDRUM .................... REV.PETITIONERS/APPELLANT/COUNTER PETITIONER ---------------------------------------------------------------- 1. M/S.JCR TRADING PVT.LTD., A COMPANY REGISTERED UNDER THE COMPANIES ACT WITH REGISTERED OFFICE AT SURAJ,KURUVIKKAD, VATTIYOORKAVU, THIRUVANANTHAPURAM,REP.BY S.SUSEELAN, M.D., OF JCR TRADING PVT.LTD.,(COMPANY CARRY ON TRICHUR JEWELLERS, EAST FROT, THIRUVANANTHAPURAM. 2. MR.S.SUSEELAN, MANAGING DIRECTOR, OF M/S. JCR TRADING PVT.LTD.,COMPANY CARRY ON BUSINESS UNDER THE NAME AND STYLE TRICHUR JEWELLERS, EAST FORT, THIRUVANANTHAPURAM, REPRESENTED BY ITS MANAGING DIRECTOR. 3. MR.JOHN JOSEPH, DIRECTOR OF M/S. JCR TRADING PVT.LTD., COMPANY CARRYING ON BUSINESS UNDEER THE NAME AND STYLE TRICHUR JEWELLERS, EAST FORT, THIRUVANANTHAPURAM. BY ADV. SRI.V.CHITAMBARESH, SENIOR ADVOCATE SRI.D.KISHORE RESPONDENT(S): RESPONDENTS/PETITIONERS. --------------------------------------- 1. A.J.VARGHESE, S/O. A.V.JOSE, ALUKKA HOUSE, PUTHUSSERIL, ARISTO ROAD, EAST FORT P.O., THRISSUR. 2. A.J.PAUL, S/O. A.V.JOSE, ALAUKKA HOUSE, PUTHUSSERIL, ARISTO ROAD, EAST FORT, THRISSUR. 3. A.J.JOHN, S/O. A.V.JOSE, ALUKKAS HOUSE, PUTHUSSERIL, ARISTO ROAD, EAST FORT P.O., THRISSUR ADV. SRI.S.V.BALAKRISHNA IYER, SENIOR ADVOCATE FOR R.1TO3 SRI.K.JAYAKUMAR FOR R.1TO3 SRI.P.B.KRISHNAN FOR R,1TO3 SMT.GEETHA P.MENON FOR R.1TO3 THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 19/02/2009, ALONG WITH RCR NO. 35 OF 2008 THE COURT ON THE SAME DAY PASSED THE FOLLOWING: PIUS C. KURIAKOSE & C.K.ABDUL RAHIM, JJ. ----------------------------------------------- R.C.R.Nos. 204 of 2007 & 35 of 2008 ----------------------------------------------- Dated this the 19th day of February, 2009 O R D E R Pius C.Kuriakose, J. RCR. No. 204 of 2007 is instituted by the tenants and RCR. Nos. 35 of 2008 is instituted by the landlords. Both these revision petitions are directed against the common judgment of the Rent Control Appellate Authority dismissing the appeals filed by the tenants and the landlords. The landlords filed the rent control petition invoking the grounds of eviction under Sections 11(2)(b) (arrears of rent), 11(3) (bona fide need for own occupation) and 11(8) (requirement for additional accommodation for personal use). 2. The landlords' case in the context of the ground for eviction under Section 11(2)(b) was that the contract rent was Rs.4840/- per mensem and that the same is in arrears since January 2002 and that despite the statutory demand notice issued under Section 11(2)(b) the tenant did not pay the arrears of rent within the period of 15 days of receipt of the notice or even thereafter. The Rent Control Court on appreciating the evidence adduced by the parties became inclined to accept the landlords' case that the tenant did not pay the arrears of rent payable since January, 2002. However, that court found hat WP(C)N0. -2- there was no evidence to hold that the contract amount of Rs.4400/- payable as per Ext.A5 lease agreement was increased to Rs.4840/- and accordingly concluded that rent is in arrears only at the rate of Rs.4400/- per mensem. Considering the grounds for eviction under Sections 11(3) and 11(8) the Rent Control Court noticed that the evidence given by the power of attorney holder of the petitioner who was examined as PW1 was only hearsay evidence regarding the requirement of the petitioners to expand their jewellery business which was being conducted by them in the adjacent northern rooms of the petition schedule building. That court also found that no acceptable evidence was let in for proving that the rooms available in the upstair portion already in the possession of the landlords was not sufficient for meeting the projected need of expansion of the landlords' business. That court relied on the evidence of CPW-2, a retired Chief Engineer of Thiruvananthapuram Corporation to find that the area of the upstair portion possessed by the landlords was equal to the corresponding area in the first floor. More importantly that court noticed that none of the landlords who are three in number have chosen to enter the witness box to testify regarding the bona fides of their need for additional accommodation. Rent Control Court relied on the judgment WP(C)N0. -3- of this Court in 2005(2) KLJ 46, the judgment of the Supreme Court in 2005(2) SCC 217 and also the judgment of this Court in 1994(2) KLT 571 and held that the failure on the part of anyone of the petitioners to speak about their own bona fides was fatal and accordingly declined order of eviction sought for under Sections 11(3) and 11(8). The Rent Control Appellate Authority on a reappraisal of the evidence would concur with all the conclusions of the Rent Control Court and dismissed the appeals preferred by the landlords and the tenants. In the context of a contention seriously raised by the tenants that the previous owners of the building had agreed to sell the building to them and that they are possessing the building on the strength of that agreement for sale and that there is no landlord tenant relationship between them and the petitioners in the RCP, the Rent Control Court and the Appellate Authority concurrently held against the tenants that the jural status of the respondents in RCP who were admittedly tenants under the predecessors in interest of the present landlords was that of tenants in view of the conceded position that the ownership had not been conveyed to them and that the suit filed by them for specific performance was only pending. 3. As already indicated RCR No. 204 of 2007 has been filed by WP(C)N0. -4- the tenants impugning the order of eviction passed against them under Section 11(2)(b) and in RCR No. 35 of 2008 the landlords challenge the finding of the Rent Control Court regarding the contract rent payable by the tenants as well as rejection of their petition for eviction on the grounds of bona fide own occupation and for requirement of additional accommodation. 4. We have heard the submissions of Mr.V.Chitambaresh, senior counsel for the tenant petitioners in RCR. No. 204 of 2007 and also those of Mr.S.V.Balakrishna Iyer, senior counsel for the landlords petitioners in RCR. No. 35 of 2008. Defending the order of the Rent Control Court and the Appellate Authority declining the eviction on the grounds under Sections 11(3) and 11(8) Mr.Chitambaresh would cite a catena of decisions before us including the judgment of a Division Bench of this Court in Indian Saree House v. Radhalakshmy, 2006(3) KLT 129, the judgment of another Division Bench of this Court in K.T.Thomas v. P.Sreedhara Varma, 2008(1) K.L.J. 125, judgment of a Division Bench of this court in Ratheesh Kumar v. Jithendra Kumar, 2005(2) KLT 669, the judgment of a Division Bench of this Court in Subramaniyan Pillai and others v. M.Shamsar Jihan and others, 2009 (1) KHC 384, the judgment of this Court in Sivadasa Panicker v. WP(C)N0. -5- Travancore Mats and Mattings Co., 2009(1) KHC 472, the judgment of a Division Bench of this Court in Aboobacker v. Sahithya P.S.Sangham Ltd., 2004(2) KLT 947, Janki Vashdeo . Indusind Bank, 2005(2) KLT 265 (SC), the judgment of the Supreme Court in Joseph Mathew v. Jose Thomas, 2005 (4) KLT 764 (SC), the judgment of the Supreme Court in Davis v. Sebastian, (1999) 6 SCC 604, the judgment of the Supreme Court in S.R. Babu v. T.K.Vasudevan and others, (2001) 8 SC 110 and the judgment of the Supreme Court in Ubaiba v. Damodaran, (1999) 5 SCC 645 were some of them. Mr.Chitambaresh would argue that at any rate, in the light of the principles of law laid down by the decisions cited by him there was no warrant for interfering with the orders concurrently passed by the Rent Control Court and the Appellate Authority and that the maximum relief which could be aspired for by the landlords was leave to institute a fresh rent control petition on the same cause of action. 5. Resisting the submissions of Mr.Chitambaresh Sri.Balakrishna Iyer would argue that the finding of the Rent Control Court that the contract rent payable by the tenants was Rs.4400/- only per month and not the sum of Rs.4840/- per month as averred by the landlords was faulty being contrary to the pleadings and the evidence. Learned WP(C)N0. -6- senior counsel submitted in this context that there was no specific denial of the landlords' pleadings regarding rate of rent and at any rate, CPW-1 had admitted in his evidence that the tenants used to pay rent to the previous landlord at the rate of Rs.4840/-. Trying to distinguish the decisions cited by Mr.Chitambaresh taking the view that the non-examination of any one of the landlords is fatal when the need is for bona fide own occupation Mr.Balakrishna Iyer would submit that all these decisions have been rendered following the judgment of the Supreme Court in Janki Vashdeo v. Indusind Bank, 2005(2) KLT 265 (SC) wherein the Supreme Court was concerned with the powers conferred on the holder of a power of attorney in terms of Order III Rules 1 and 2 of the Code of Civil Procedure to act on behalf of the principal. The ratio of that decision, according to the learned senior counsel was only to the effect that an agent is not capable of deposing for the principal in respect of matters on which only principal can have personal knowledge. In the instant case the person examined on behalf of the landlords was the manager and actual conductor of the business. The landlords are youngsters and it is this PW1 who is actually conducting the business and hence he is aware of the ground realities including the extent of space required for conducting the WP(C)N0. -7- business in a more profitable way. Mr.Balakrishna Iyer argued that at any rate, all the decisions cited by Mr.Chitambaresh were decisions rendered in the context of a claim under Section 11(3) and not under Section 11(8). Mr.Balakrishna Iyer conceded that though in the instant RCP both 11(3) and 11(8) were quoted in view of the ratio of the judgment of this Court in Indian Saree House v. Radhalakshmy, 2006(3) KLT 129 and the judgment of the Supreme Court in S.R.Babu v. T.K.Vasudevan and others, (2001) 8 SCC 110 the rent control petition can be maintained only under section 11(8). Counsel submitted that the standards of bonafides required for establishing a ground under Section 11(8) were not so rigorous as in a case under Section 11(3) and hence the bonafides of the petitioners for additional accommodation has been established by the oral evidence of PW1, their manager who is in the know of things. When the attention of the senior counsel was drawn to the situation that in the instant case neither the Rent Control Court nor the Appellate Authority appears to have considered the question of comparative advantages and hardships as is necessary in the case of petitions under Section 11(8) in view of the second proviso to section 11(10) the senior counsel would draw our attention to Sections 18(3) and 23(1) of the Rent WP(C)N0. -8- Control Act and also to Rule 16(2) of the Kerala Buildings (Lease & Rent Control) Rules and argue that if it becomes necessary the issue be remanded to the Rent Control Court. 6. In reply Sri.V.Chitambaresh, senior counsel would oppose Mr.Balakrishna Iyer's request for a remand of the matter and that too to the Rent Control Appellate Authority. According to him by remanding the matter to the Rent Control Appellate Authority the tenants are being deprived of the statutory right of appeal guaranteed under Section 18 against the order of the Rent Control Court. Counsel submitted that on facts the case of Joseph Mathew v. Jose Thomas, 2005(4) KLT 764 (SC) was much stronger for the landlord and that in that case the Supreme Court had set aside orders of eviction concurrently passed in favour of the landlords on the sole ground of non-examination of the landlords. Yet the Supreme Court became inclined not to remand the matter, but only to permit the landlord to file a fresh petition. 7. We have considered the rival submissions addressed by the learned senior counsel. In the light of the relevant statutory provisions and the ratio emerging from the various decisions cited at the Bar. WP(C)N0. -9- The above discussions will lead these revision petitions to the following result. The order of eviction passed by the Rent Control Court under section 11(2)(b) is confirmed. However, the finding of that court regarding the contract rent payable by the tenant is modified and it is found that the contract rent payable by the tenant is Rs.4840/- per mensem. The arrears of rent to be deposited by the tenant for getting the order of eviction passed under Section 11(2)(b) set aside under Section 11(2)(c) will be quantified on that basis. It is found that R.C.P. No. 31 of 2004 is not maintainable under Section 11(3) and that it is maintainable under Section 11(8). The orders passed by the Rent Control Court and the Appellate Authority dismissing the R.C.P. are set aside and the R.C.P. is remanded to the Rent Control Court, Thiruvananthapuram for further enquiry and fresh decision. The Rent Control Court will permit the landlords to adduce further evidence by examining any one of the landlords and by producing any item of documentary evidence. In case further evidence as permitted above is adduced by the landlords the Rent Control Court will allow the tenants to adduce counter evidence. That court will pass fresh orders in the WP(C)N0. -10- RCP on the basis of the entire evidence on record. The necessary finding in the context of the first proviso to Section 11(10) will also be entered by the Rent Control Court. R.C.R. No.204 of 2007 is dismissed and R.C.R. No. 34 of 2008 is allowed to the above extent. In the circumstances the parties will suffer their respective costs in the revisions. (PIUS C.KURIAKOSE, JUDGE) ksv/-