Case: A.R. Salay Mohamed Sait etc Vs. Jaffer Mohamed Sait's Memorial Dispensary Charity & Others

MITTER, J.1. These are two appeals by Special Leave from a common judgment in two Second Appeals Nos. 1623 and 1639 of 1963, disposed of by the High Court of Judicature at Madras on 15th September, 1967.2. The present appeals are by the two defendants in two suits for ejectment filed in the Court of the Subordinate Judge of Nilgris in the year 1960. The Subordinate Judge found against the plaintiff but on appeal the District Judge reversed that finding and the High Court in Second Appeal upheld the District Judges decision.3. The relevant facts are as follows. On 3rd February, 1941, a lease deed was executed between one Abdul Rahiman Dulla Sait (lessee) and one Mohamed Hashim Sait (Lessor) in respect of Ac. 2-00 of land in Goel Mohameds compound being part of S.No. C-316 for a period of 10 years from 29th January, 1941, with an option of renewal for a further term often years at an annual rent of Rs. 260 excluding water tax and the taxes on the buildings and sheds which had been erected by the lessee at his own cost. The lessee authorised the landlord in case of default in the payment of the yearly rent to confiscate the said building and sheds. It was a further term of the lease that at the expiry thereof the lessee would be at liberty to remove at his own cost all the materials of the buildings and sheds which had been erected on the land within two months from the date of the said expiry. The lessee hypothecated the buildings and sheds as security for the payment of the yearly rent. In case of renewal of the lease for another period of 10 years, the lessee was to execute a fresh lease for the said period, the rates and taxes on the land having to be borne by the lessors. It appears that the lessee put up at his own cost and risk a cinema hall and some other buildings over the demised land and enjoyed the same as a lessee. In 1945 the lessor created a trust in respect of the demised property and other properties by a deed of trust dated 21st February, 1945, and appointed himself and Haji Abdul Rahim Saite the trustees of the said trust. The original lessee paid rent to the trustees, upto March, 1948, and thereafter the 2nd defendant-appellant paid the same. The option of renewal of the lease was not exercised but the lessee continued to occupy as before from year to year. In 1957, the defendants agreed to pay rent at Rs. 500 per annum. They started to make default in payment of the rent from the month of June of that year. On 7th July, 1959 the trustees decided to determine the lease after the expiry of the yearly lease on 29th January, 1960, and gave notice to the tenants accordingly. On 13th November, 1945, there was another lease between the said trustees and one Thiruvengadam in respect of a portion of the land bearing S.No. 434/1 measuring about Ac. 0-50 for a period of 7 years at an annual rental of Rs. 350 with an option of renewal for a further period of not more than 8 years on the same terms and conditions but at an increased rental of Rs. 400 per annum. The lease provided that the rent of the land for the first seven years was to commence from 1st January, 1945. The lessee was to have the right to use the land as a business place putting up shelters, erections and fixtures required for running his business at his own cost but he was not to have any right to remove or cause the same to be removed either before or after the expiration of the period or when it became necessary for the lessee to vacate the land for default in payment of rent. The lessee was further not to use the building as a cinema hall without the written permission of the lessor. The lessee exercised his option of renewal and got it for a further period up to 31st April, 1959. He however did not vacate the land and give possession thereof to the lessor in spite of demands.4. A common defence taken in both the suits was that the property demised to the defendants had actually vested in a family trust even as early as 1918 and Hashim Sait had no right to deal with the same as lessor in 1941 nor was he competent to create the trust in 1945 and hence the plaintiffs could not institute the suit. By the amendment of written statements in both the suits the defendants raised a plea that the suit was barred under the Madras Buildings (Lease and Rent Control) Act, 1960.5. The Subordinate Judge found that the plaintiffs had no right or locus standi to maintain the suit; but he also held that the said Act did not apply to the suit property.6. The appeals by the landlord were allowed by the District Judge. He held that it was not open to the tenants to deny their landlords title.7. In further appeal to the High Court it was held that the suits were maintainable and that there was no substance in the defence that the plaintiffs were not competent to institute the suits. The High Court held that though the plaintiffs had loosely described themselves as trustees in strict law they would be only muta-walis of a wakf and any person in management of the wakf property like the plaintiffs could be mutawalis and competent to institute the suit on behalf of the wakf. The High Court found it unnecessary to consider the question about the Rent Control Act.8. Before us Mr. Gokhale argued that the civil Courts have no jurisdiction to entertain the suit for eviction in view of the Madras Buildings (Lease and Rent Control) Act of 1960 Which applied to the facts of this case. Under section 10, sub- section (2) of the Act a landlord seeking to evict a tenant had to apply to the Controller for a direction in that behalf. There is no dispute that the Act would be applicable if what was let was ‘building’ within the meaning of section 2, clause (2) of the Act which runs as follows:“‘building’ means any building or hut or part of a building or hut let or to be let separately for residential or non-residential purposes and includes:(a) the garden, grounds and out-houses if any appurtenant to such building, hut or part of such building or hut and let or to be let along with such building or hut.(b) any furniture supplied by the landlord for use in such building or hut or part of a building or hut,but does not include a room in a hotel or boarding house.”On a reference to the deeds of lease of 1941 and 1945 Mr. Gokhale contended that it was clear that the land mentioned therein was not vacant but had certainly some structures and buildings standing thereon and it was not open to the landlords to evict the tenants therefrom except by following the procedure laid down in the Act. He referred to certain decisions of the Madras High Court in aid of his contention which we shall presently examine.The decisions of the years 1963 and 1964 referred to by him followed the earlier decision in Irani v. Chidambaram Chettiar, It appears from the judgment of Raghaya Rao, J. in that case that the subject-matter of the lease consisted of (1) the site underneath the actual building known as Gaiety Theatre which belonged to the lessee; (2) the small sheds at one end of the premises and (3) all the vacant space within exclusive of the theatre and the sheds. The learned Judge stated that:“The entire premises embracing the three portions demised as well as the lessees own structure known as Gaiety Theatre are described in the record as Blackers stables and at the time of Exhibit P-9 (the deed of lease) the Gaiety Theatre having become the property of the lessee himself it was the rest of Blackers stables consisting of three portions just referred to that was let out to the defendant.”9. The question was whether what was let out was a ‘building ‘within the definition of the Madras Buildings (Lease and Rent Control) Act of 1946. For the appellant it was contended that the description of the premises in the lease deed as well as in the prior leases pointed to the land principally as a subject-matter of the letting and since the sheds occupied only an inconsequential part of the entire premises there was no reason to suppose that what was let out was a building. The description of the premises in the deed of lease was:“that piece or parcel of land lying at No. 1/1 Blackers Road more particularly, described in the schedule hereto annexed and the compound wall and certain buildings standing thereon.”The description in the schedule was,“that piece or parcel of land together with the buildings being a portion of the premises known as Blackers stables situate and bearing door No. 1/1, Blackers Road, etc.”According to Raghava Rao, J.“It is sufficient to say that there are some buildings within the premises and that from the year 1914 down to Exhibit P-9 the land and the building enclosed in the compound wall have been treated as one unit and have always been leased out as one property.”The learned Judges were unable to accept the contention of the appellant-landlord that in substance the letting was of the land and not of any building.In Ramaswami Pathar v. J. K. Devasthanam, the tenant-appellant had (to quote the words of the judgment)“Presumably with the permission of the respondent put up a superstructure on the land which forms the subject-matter of dispute in this case. While the superstructure was in, existence the appellant obtained a lease from the respondent the owner of the site for a period of five years. Under the terms of the lease deed, the appellant agreed to surrender possession of the land after the period of the lease and during the interim period not to sell or otherwise alienate the superstructure without the permission of the landlord.”It was further found that“the site alone is the property of the respondent and that at the time when the lease Was granted there was a superstructure belonging to the appellant on the property.”Referring to the judgment in Irani v. Chidambara Chettis case, the learned judges took the view that the lessee could not be evicted from the property.Much to the same effect is the judgment in Palaniappa Chettiar v. Vairavan Chettiar. There also it appears that at the time when the lease was granted there was on the property one half of the entire superstructure known as Raja Talkies owned by the respondent. According to the learned judges although the lease did not specifically describe the property as a building there were indications in it to show that the lease was granted on the basis that there was a building on the property of which the respondent was the owner. They held that the question before them was answered by the decision in Iranis case.In Palaniappa Chettiar v. Babu Sahib, the facts were as follows. There was a lease in 1947 in favour of the 1st respondent in the suit of a vacant site but the deed contemplated the putting up of buildings thereon and actually some buildings were put up. It appears that there was no renewal of lease in this case as in Palaniappa Chettiars case, and the Counsel for the plaintiffs sought to distinguish the case on that ground. The learned Judge found that although the lease itself did not specifically mention the purpose it was one to enable the first defendant to put up buildings on the site and to carry on his business. It was said:“The lease having therefore clearly contemplated the vacant site let out being built upon and when such buildings were put up during the currency of the lease the building became part of the land and therefore the land became indistinguishable from the buildings. In other words they were integral parts of each other for the purpose of the lease and the lease should therefore be regarded as of buildings as well.”10. With all respect to the learned Judges of the Madras High Court trying the cases in 1963 and 1964 referred to, it seems to us that in following Iranis case they fell into an error. In Iranis case, what was let out was not a vacant site. Even leaving out of account the superstructure of Gaiety Theatre there were certain stalls and structures on the land which would come within the definition of building in the Act then in force.11. In order to determine whether the lease is of a vacant land or of a building within the meaning of the Act of 1960 we must take into account both the form and the substance of the transaction. In form the transactions in suit were leases of vacant land. The substance of the transactions points to the same conclusion. The lease of 1941 shows that the landlord was aware that there were certain structures on the land but what was let out Was not the structures but the entire land of Ac. 2-00. It was with in the rights of the lessee to remove all the materials of the buildings and sheds which were erected on the land within 2 months after the date of the expiry of the agreement and the landlord was to have a charge thereon only in case of default of payment of the yearly rent. The structures belonged entirely to the lessee and they did not form the subject-ma4ter of the lease.The lease of 1945 was of a portion of S. No. E. 434/1 measuring Ac. 0-50. The rent for the first seven years was to be Rs. 300 annually and for the second period of 8 years at Rs. 400 per annum. Although the lessee was to have the right to use the land as business premises and to put up erections and fixtures for running his business he was not to have any right to remove or cause them to be removed either before or after the expiration of the period mentioned. It is clear that what was let out in both leases was the land without any structures.It seems to us therefore that neither in form nor in substance was there a letting of any building. In the first case there were some structures on the land in 1941 but the landlord had no interest thereon and the tenant unless he made default in payment of rent could remove at any time within 2 months after the expiry of the lease, the building materials by demolishing the structures. In the second case, although the structures were to become the property of the landlord at the end of the term the letting was only of the vacant land. The landlord did not let out any building which could come within the mischief of the Act.12. Our conclusion is supported by the decision of this Court in Krishnapasuba v. Dattatreya. There a rent note was executed stating that the subject-matter of the letting for which the rent was payable by the tenant was open land with a khatta. It was admitted that a khatta was not a building. Clause (1) of the note shows that on a portion of the land the tenant had built a shed of corrugated iron sheets at his own cost and clause (5) stated that on the termination of the tenancy the tenant could remove the structure raised by him including the timber, the pillars, the iron materials etc. It was contended on behalf of the tenants in that case that the property let out being a ‘premises’ within the meaning of section 5 (8) of the Bombay Rents Hotel and Lodging Houses Rates Control Act (LVII of 1947) section 13 (1) was a bar to the landlord obtaining a decree for eviction in respect of premises which were building and ground appurtenant to the building. It was observed by this Court that:“The building belonged to the tenant and was not the subject-matter of the letting. The land only was the subject-matter of the letting. Consequently the premises are land within the meaning of section 13(1)(i).”13. A faint argument was put up that the plaintiffs were not the proper persons to maintain the suit. It seems to us that there is no substance in this contention either. The lease of 1945 was in favour of the trustees and the tenant could not be heard to deny the landlords title. As regards the lease of 1941 nothing was shown to us to take a view different from that arrived at by the High Court.

Decision reasoning: 0[ds]10. With all respect to the learned Judges of the Madras High Court trying the cases in 1963 and 1964  referred to, it seems to us that in following Iranis case they fell into an error. In Iranis case, what was let out was not a vacant site. Even leaving out of account the superstructure of Gaiety Theatre there were certain stalls and structures on the land which would come within the definition of building in the Act then inseems to us therefore that neither in form nor in substance was there a letting of any building. In the first case there were some structures on the land in 1941 but the landlord had no interest thereon and the tenant unless he made default in payment of rent could remove at any time within 2 months after the expiry of the lease, the building materials by demolishing the structures. In the second case, although the structures were to become the property of the landlord at the end of the term the letting was only of the vacant land. The landlord did not let out any building which could come within the mischief of the Act.In order to determine whether the lease is of a vacant land or of a building within the meaning of the Act of 1960 we must take into account both the form and the substance of the transaction. In form the transactions in suit were leases of vacant land. The substance of the transactions points to the same conclusion. The lease of 1941 shows that the landlord was aware that there were certain structures on the land but what was let out Was not the structures but the entire land of Ac.It was with in the rights of the lessee to remove all the materials of the buildings and sheds which were erected on the land within 2 months after the date of the expiry of the agreement and the landlord was to have a charge thereon only in case of default of payment of the yearly rent. The structures belonged entirely to the lessee and they did not form theof the lease.The lease of 1945 was of a portion of S. No. E. 434/1 measuring Ac.The rent for the first seven years was to be Rs. 300 annually and for the second period of 8 years at Rs. 400 per annum. Although the lessee was to have the right to use the land as business premises and to put up erections and fixtures for running his business he was not to have any right to remove or cause them to be removed either before or after the expiration of the period mentioned. It is clear that what was let out in both leases was the land without any structures.Itseems to us therefore that neither in form nor in substance was there a letting of any building. In the first case there were some structures on the land in 1941 but the landlord had no interest thereon and the tenant unless he made default in payment of rent could remove at any time within 2 months after the expiry of the lease, the building materials by demolishing the structures. In the second case, although the structures were to become the property of the landlord at the end of the term the letting was only of the vacant land. The landlord did not let out any building which could come within the mischief of theseems to us that there is no substance in this contention either. The lease of 1945 was in favour of the trustees and the tenant could not be heard to deny the landlords title. As regards the lease of 1941 nothing was shown to us to take a view different from that arrived at by the High Court.