Case: Metalware and Company Etc Vs. Bansilal Sharma and Others Etc

Since the facts giving rise to the aforesaid question in all these appeals are almost similar it will suffice if the facts in C.A. Nos. 2087-2088/78 are stated. The appellant Metalware &Co., a proprietary concern has been a tenant of the premises in dispute, namely, a shop on the ground floor of door No. 425, Mint Street, George Town, Ma dras-1 since 1953. The respondents (landlord) purchased the building from its erstwhile owner some time in 1975 and filed applications against all the tenants thereof including the appellant for evicting them under s. 14(1) (b) of the Act alleging that the building being very old and dilapidated required immediate demolition and reconstruction and they bona fide required it for the said purpose for their occupation. The respondents further alleged that they were possessed of sufficient means to undertake the demolition and reconstruction and had applied for and obtained from the Municipal Corporation sanctioned plans in that behalf and after duly terminating the tenancies had sought vacant possession. The application was resisted by the appellant on several grounds. Inter alia, the claim of the landlords that the building was bona fide required by them for the immediate purpose of demolition and reconstruction was seriously disputed; in particular it was emphatically denied that the building was in a dilapidated condition requiring immediate demolition and reconstruction, so also the allegation that the respondents had sufficient means to undertake the demolition and reconstruct ion. Admittedly the building was over 70 years old but as regards the existing condition thereof the landlords were able to produce merely one Notice (Ex. Pl) received from the Municipal Corporation requiring them to carry out repairs specified therein which clearly showed that the building could not be said to be in any dilapidated condition needing demolition. The Rent Controller (7th Judge small Causes Court, Madras) on the evidence led before him by the parties came to the conclusion that the respondents had sufficient means to undertake the demolition and reconstruction, had got their plans approved by the Municipal Corporation and had an honest intention to demolish the existing structure and to reconstruct another on that site. On the question whether the building was in a dilapidated condition and required immediate demolition and reconstruction no definite finding one way or the other was given but he took the view that it was well settled that it was not al ways essential to prove that the building was decrepit before an application for possession could be made under s. 14(1)(b) of the Act and that the landlord had a right to demolish his property in order to build a new structure on the site with a vi ew to improve his business or get better returns out of investments and that since in the instant case the respondents had purchased the building for the purpose of demolition and reconstruction and had obtained the municipal sanction in that behalf and were found to be possessed of sufficient means, they satisfied the condition of s. 14(1)(b) of the Act. He, therefore, ordered the eviction of the III appellant. In the appeal preferred by the appellant under s. 23 of t he Act, the appellate authority (2nd Judge of Small Causes Court, Madras) confirmed the view of the Rent Controller that the respondents had established their bona fide requirement under s. 14(1) (b) and dismissed the appeal. The appellant preferred a Civil Revisional Application to the High Court specifically contending that the decision of the lower authorities on the question of bona fide requirement was wrong inasmuch as the factor whether the building itself required demolition and reconstruction or not had been regarded as irrelevant and completely ignored. The High Court dismissed the Revisional Application by observing thatthe only thing to be looked into in such cases is whether the intention to demolish the building is there and whether such an intention is for the purpose of demolishing the same with a future intention to reconstruct and whether it is a bona fide intention; all these have been found in favour of the landlord.The appellant has challenged the correctness of the view adopted by the Rent Controller, the appellate authority and the High Court before us.

Court's reasoning:
The decisions on which reliance was placed by counsel for the respondents, in our view, . do not go to the extent of saying that the existing condition of the building is a totally irrelevant factor. In Panchamal Narayan Shenoys case (supra), a case arising under s.21(1)(;) of the Mysore Rent Control Act, an extreme contention was urged on behalf of the tenant that unless the landlord was able to establish that the condition of the building was such that it immediately required demolition and reconstruction no tenant could be ordered to be evicted under the provision, in other words, the contention was that the words reasonably and bona fide required by the landlord occurring in cl. (j) of s.21(1) of that Act must be interpreted to have reference to the condition of the building, the demolition of which was sought to be made, and that those words had no reference to any intention entertained by the landlord. Such an extreme contention was negatived by this Court. And this Court went on to observe; no doubt, whether the landlords requirement is reasonable and bona fide has to be judged in the light of the surrounding circumstances, which will include his means for reconstruction of the building, and other steps taken by him in t hat regardThe next decision relied upon by counsel for the respondents is S. M. Gopalkrishna Chettys case (supra), the ratio of which is clearly different and does not touch the issue arising before us in these appeals. the question which arose for determination in that case was whether a landlord who had a life interest in the property in question could seek eviction of his tenant for bona fide requirement of demolition and reconstruction and this Court took the view that the definition of the word landlord under s. 2(6) was wide enough to include the appellant who had a life-interest in the premisesSuch a step per se cannot be characterised as mala fide on the part of the landlord. In the first place these observations were made in the context of the contention that was strongly urged before the Court that a person (landlord) having merely a life interest could not be allowed to demolish the property in order to reconstruct it as that action would per se be not bona fide for the purposes of s. 14(1)(b). It was while rejecting this contention that the aforesaid observation w as made by this Court. Secondly, all that the said observation indicates is that in the view of this Court if a landlord were to exercise his right to demolish his property in order to build a new structure at the site with a view to improve his business or lo get better return on his investment such a step per se could not be regarded as mala fide on the part of the landlord. This has nothing to do with the question whether while determining the bona fide requirement of the landlord under s. 14(1) (b) of the Act, the condition of the building is or is not a relevant factor. The Madras decision in Mahboob Badshas case (supra) merely takes the view that the age and the dilapidated condition of the building is not a sine qua non for eviction under s. 14(1) (b) of the Act. That is far from saying that it is a totally irrelevant factor. In fact, in that case the relevancy of this Factor has in one sense been accepted, for, the Court has observed that a decrepit building may c all for immediate demolition and without anything more the landlord could be said to have satisfied the condition of his bona fide requiring the building for immediate demolition but according to the Court the terms of s. 14(1)(b) are wide enough to cover cases where landlord bona fide requires a building for the expanse of his own business or for legitimate purpose. In David v. Denial (supra) also the Division Bench of the Madras High Court has proceeded on the basis that under s. 14(1) (b ) of the Act bona fide desire or intention on the part of the landlord was essential and that it was not essential requirement of the provision that the building should be old and decrepit. But it is the alternative contention of the counsel for the appellant which we have accepted, namely that the age and decrepit condition of the building is a relevant factor amongst several others which will have to be considered while adjudicating upon the bona fide requirement of the landlord under that provision and might receive greater emphasis in a case where the enactment, as is the case here, contains no provision for reinducting the evicted tenant into the new building than where the concerned enactment has such a provision.Having regard to the above discussion, on the construction of s. 14(1)(b) of the Act, particularly in the light of its scheme, we are clearly of the view that the existing condition of the building far from being totally irrelev ant is a vital factor which will have to be considered while pronouncing upon the bona fide requirement of the land lord under that provision which has to be done by having regard to all the circumstances and since in the instant case all t he Courts have totally ignored this vital factor to feel that their conclusion on the question of bona fide requirement of the landlord deserves to be set aside. We accordingly set aside the said conclusion of the Courts below and remand the matter back to the Rent Controller to dispose of the landlords application in light of our judgmentIn Civil Appeal No. 1301 of 1978 and Civil Appeal No. 1381 of 1978 which are by two tenants against the same landlord and attempt was made by counsel appearing for the respondent-landlord to show that the tenants in their written statements had made an admission that the building which was sought to be demolished was not merely old but in a dilapidated condition.After going through the written statements of the tenants in these appeals we are not satisfied that any such clear admission has been made by the tenants in their written statements. Further, in these matters also the Rent Controller, the Appellate Au thority as well as the High Court proceeded on the footing that even if it were assumed that the building was not old nor dilapidated even then the landlord was entitled to an order of eviction as his honest intention to demolish the building a nd to reconstruct the same was backed by sufficient funds and the steps which he took by applying for sanction of plan for demolition and reconstruction and, therefore, the applications of the landlord will have to go back to the Rent Controller and we accordingly set aside the orders of the High Court and remand the applications to tho Rent Controller for disposal according to law in the light of our judgment.