Case: Uttamchand Vs. S.M. Lalwani

by a roof irrespective of the purpose for which it is used and let, is a building within the meaning of the Act".The learned Judge has also remarked that so to construe the Act would bring within its operation all factories and mills which are invariably located in buildings. The question in each case would be what is the dominant part of the demise and what is the purpose for which the building was constructed and let out. In that case, the learned Judge was dealing with the question as to whether the lease before the Court was a building lease within the meaning of the Madras Act 25 of 1949. Mr. Iyengar contends that in construing the lease before us, we must apply the test of the dominant intention of the parties. In our opinion, this contention is well-founded, and so, we must determine the character of the lease by asking ourselves as to what was the dominant intention of the parties in executing the document.11. As we have already noticed, S. 3 (a) (y) (3) takes within the definition of accommodation any building or part of a building, including any fittings affixed to such building or part of a building for the more beneficial enjoyment thereof. There can be no doubt that the fittings of the machinery in the present case cannot be said to be fittings which had been fixed for the more beneficial enjoyment of the building. The fittings to which S. 3(a) (y) (3) refers are obviously fittings made in the building to afford incidental amenities for the person occupying the building. That being so, it is clear that the fittings in question do not fall under S. 3(a) (y) (3). If the fittings in question had attracted the provisions of S. 3(a) (y) (3) there would have been no difficulty in holding that the lease is in respect of accommodation as defined by the said provision.12. What then was the dominant intention of the parties when they entered into the present transaction? We have already set out the material terms of the lease and it seems to us plain that the dominant intention of the appellant in accepting the lease from the respondent was to use the building as a Dal Mill. It is true that the document purports to be a lease in respect of the Dal Mill building; but the said description is not decisive of the matter because even if the intention of the parties was to let out the Mill to the appellant, the building would still have to be described as the Dal Mill building. It is not a case where the subject matter of the lease is the building and along with the leased building incidentally passes the fixture of the machinery in regard to the Mill; in truth, it is the Mill which is the subject-matter of the lease, and it was because the Mill was intended to be let out that the building had inevitably to be let out along with the Mill. The fact that the appellant contends that the machinery which was transferred to him under the lease was found to be not very serviceable and that he had to bring in his own machinery, would not alter the character of the transaction. This is not a lease under which the appellant entered into possession for the purpose of residing in the building at all; this is a case where the appellant entered into the lease for the purpose of running the Dal Mill which was located in the building. It is obvious that a Mill, of this kind will have to be located in some building or another, and so, the mere fact that the lease purports to be in respect of the building will not make it a lease in respect of an accommodation as defined by S. 3 (a) (y) (3).The fixtures described in the schedule to the lease are in no sense intended for the more beneficial enjoyment of the building. The fixtures are the primary object which the lease was intended to cover and the building in which the fixtures are located comes in incidentally. That is why we think the High Court was right in coming to the conclusion that the rent which the appellant had agreed to pay to the respondent under the document in question cannot be said to be rent payable for any accommodation to which the Act applies.13. It appears that the Rent Controlling Authority as well as the District Judge were impressed by the plea raised by the appellant before them that if a Mill like the Dal Millwith which we are concerned was intended to be exempted from the operation of the Act, S. 2(1) would have expressly provided for such exemption. We have already noticed that S. 2 (1) (d), for instance, expressly exempts places of entertainment herein prescribed. Similarly, cls. (a), (b) and (c) of S. 2(1) make other exemptions. The argument was that since a Mill which is situated in a building is not expressly exempted by S. 2, it would be unreasonable to hold that the lease in the present case is not a lease in respect of an accommodation as defined by S. 3(a) (y)(3). In our opinion, there is no substance in this contention. The fact that a Mill situated in a building is not expressly exempted by S. 2(1) would hardly make any difference, because no lease can attract the provisions of the Act unless it is shown that it is in respect of accommodation as defined by S. 3(a) and that must inevitably take us to the question as to whether the present lease falls under S. 3 (a) (y) (3). If the answer to this question is in the negative, it makes no difference at all, because if the lease is not in respect of accommodation, it is hardly necessary to enquire whether it has been exempted from the operation of the Act.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]11. As we have already noticed, S. 3 (a) (y) (3) takes within the definition of accommodation any building or part of a building, including any fittings affixed to such building or part of a building for the more beneficial enjoyment thereof. There can be no doubt that the fittings of the machinery in the present case cannot be said to be fittings which had been fixed for the more beneficial enjoyment of the building. The fittings to which S. 3(a) (y) (3) refers are obviously fittings made in the building to afford incidental amenities for the person occupying the building. That being so, it is clear that the fittings in question do not fall under S. 3(a) (y) (3). If the fittings in question had attracted the provisions of S. 3(a) (y) (3) there would have been no difficulty in holding that the lease is in respect of accommodation as defined by the said provision.12. What then was the dominant intention of the parties when they entered into the present transaction? We have already set out the material terms of the lease and it seems to us plain that the dominant intention of the appellant in accepting the lease from the respondent was to use the building as a Dal Mill. It is true that the document purports to be a lease in respect of the Dal Mill building; but the said description is not decisive of the matter because even if the intention of the parties was to let out the Mill to the appellant, the building would still have to be described as the Dal Mill building. It is not a case where the subject matter of the lease is the building and along with the leased building incidentally passes the fixture of the machinery in regard to the Mill; in truth, it is the Mill which is theof the lease, and it was because the Mill was intended to be let out that the building had inevitably to be let out along with the Mill. The fact that the appellant contends that the machinery which was transferred to him under the lease was found to be not very serviceable and that he had to bring in his own machinery, would not alter the character of the transaction. This is not a lease under which the appellant entered into possession for the purpose of residing in the building at all; this is a case where the appellant entered into the lease for the purpose of running the Dal Mill which was located in the building. It is obvious that a Mill, of this kind will have to be located in some building or another, and so, the mere fact that the lease purports to be in respect of the building will not make it a lease in respect of an accommodation as defined by S. 3 (a) (y) (3).The fixtures described in the schedule to the lease are in no sense intended for the more beneficial enjoyment of the building. The fixtures are the primary object which the lease was intended to cover and the building in which the fixtures are located comes in incidentally. That is why we think the High Court was right in coming to the conclusion that the rent which the appellant had agreed to pay to the respondent under the document in question cannot be said to be rent payable for any accommodation to which the Act applies.13. It appears that the Rent Controlling Authority as well as the District Judge were impressed by the plea raised by the appellant before them that if a Mill like the Dal Millwith which we are concerned was intended to be exempted from the operation of the Act, S. 2(1) would have expressly provided for such exemption. We have already noticed that S. 2 (1) (d), for instance, expressly exempts places of entertainment herein prescribed. Similarly, cls. (a), (b) and (c) of S. 2(1) make other exemptions. Theargument was that since a Mill which is situated in a building is not expressly exempted by S. 2, it would be unreasonable to hold that the lease in the present case is not a lease in respect of an accommodation as defined by S. 3(a) (y)(3).In our opinion, there is no substance in this contention. The fact that a Mill situated in a building is not expressly exempted by S. 2(1) would hardly make any difference, because no lease can attract the provisions of the Act unless it is shown that it is in respect of accommodation as defined by S. 3(a) and that must inevitably take us to the question as to whether the present lease falls under S. 3 (a) (y) (3). If the answer to this question is in the negative, it makes no difference at all, because if the lease is not in respect of accommodation, it is hardly necessary to enquire whether it has been exempted from the operation of the Act.