Case: Uttamchand Vs. S.M. Lalwani

The appellant moved the Rent Controller to fix the rent payable by him under the lease in question in respect of the property demised to him under S. 9(1) of the Act. This application was resisted by the respondent on the ground that the lease in question did not fall within the protection of the Act as the property demised to the appellant was not accommodation within the meaning of S. 3, and the rent payable by the appellant to the respondent was, therefore, not payable for any accommodation to which the Act applied. The Rent Controlling Authority at Bhopal rejected the respondents contention and, on the merits, held that Rs. 2,400/per annum should be the reasonable annual rent payable under the lease.2. The respondent then went in appeal to the District Judge at Bhopal and urged that the Rent Controlling Authority had no jurisdiction to fix the rent between the parties and, on the merits, the rent fixed was unduly low. The District Judge rejected the respondents contention as to jurisdiction and held that the lease in question was governed by the provisions of the Act. In regard to the merits of the order passed by the Rent Controlling Authority, The District Judge held that the rent had been fixed by the said Authority more or less arbitrarily without taking into consideration the definition of reasonable annual rent and so, he set aside the order under appeal and remanded the case to the Rent Controlling Authority, directing it to make an enquiry and give its finding as to the reasonable annual rent in accordance with the observations made in his judgment.3. The respondent then moved the High Court of Madhya Pradesh in its revisional jurisdiction and he challenged the validity of the order of remand on the ground that the lease did not fall within the protection of the Act, and so, the appellant was not entitled to ask for the determination of a reasonable annual rent under S. 9(1) of the Act. This plea has prevailed in the High Court with the result that the respondents revisional application has been allowed and the application made by the appellant for the fixation of a reasonable annual rent has been dismissed. It is against this order that the appellant has come to this Court by special leave

Court's reasoning:
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.