Case: V. Sanjeevaraya Mudaliar Vs. N.A. Raghavachary

1. The respondent is the owner of premises No.8, Brahmin Street, Saidapet, Madras. By a registered lease dated November 21, 1952 he let to the appellant the backyard of the premises for a term of 5 years. The backyard consisted of vacant land. The lease deed authorised the appellant to use land for boiling and drying paddy, to use the gate in the western compound wall for ingress and egress, to erect an opening in the wall for bringing in and taking out the paddy, and to erect a temporary shed or keeping the paddy on condition that while vacating the land he would dismantle the same. The deed specifically provided that the appellant should not erect any kind of permanent super-structures on the said vacant site so as to entitle him to claim in future the value thereof, except such facilities as were necessary for drying paddy at his own expense. In contravention of this stipulation and without any authority from the respondent, the appellant erected permanent super-structures on the land. On the expiry of the lease the appellant refused to vacate the land. On March 12, 1959 the respondent filed a suit for his eviction. The appellant claimed protection underthe Madras City Tenants Protection Act, 1921 (Act III of 1922). Before filing his written statement on February 15, 1960, he filed an application under Section 9 of the Act asking for an order that the respondent be directed to sell the land for a price to be fixed by the Court. The trial Court decreed the suit on August 25, 1960. The first appellate Court reversed the decree and dismissed the suit. The High Court on second appeal restored the decree of the trial Court. The present appeal has been filed after obtaining special leave.

Court's reasoning:
Before the execution of the lease deed dated November 21, 1952 the land in the backyard was occupied with and was appurtenant to the residential house at No. 8, Brahmin Street. It may be conceded that if the respondent had let the residential building together with its appurtenant land, the tenancy would not be a tenancy of land within the purview of the Act. But the respondent did not let the building with the land appurtenant thereto. He retained the building and let the land separately. The letting was of land and nothing else. The appellant is not a tenant of a building as defined in Section 2 (1) either before or after its amendment by Madras Act XIII of 1960.He is a tenant of land as defined in S. 2 (2). The High Court was in error in holding that he was a tenant of buildingUnder Section 8 a tenant on ejectment is entitled to be paid as compensation the value of any building erected by him. A tenant entitled to compensation under Section 3 and against whom a suit for ejectment has been instituted is entitled to purchase the whole or part of the land by invoking the procedure under Section 9. The effect of the main part of Section 12 is that nothing in any contract made by a tenant takes away or limits his rights under Sections 3 and 9. The proviso to Section 12 saves stipulations as to the erection of buildings made by a tenant in a registered writing. But a stipulation as to the erection of buildings made orally or in an unregistered writing is not protected by the proviso and a tenant erecting a building in breach of the covenant is entitled the benefits of Sections 3 and 97. In contravention of the stipulation, as to the erection of buildings, in the registered lease deed the appellant erected permanent structures on the land after the date of the lease. The question is whether the appellant is entitled to compensation for the structures under Sec. 3 and to the benefits of Section 9. The effect of the proviso to Section 12 is that nothing in the Act affects the stipulation. Sections 3 and 9 are subject to and controlled by the proviso to Section 12. Section 3 provides that a tenant shall on ejectment be entitled to be paid as compensation the value of any building erected by him.The right conferred on the tenant by Section 3 is controlled by the stipulation in the registered lease deed that he shall not erect permanent struotures of any kind on the land so as to entitle him to claim in future the value thereof. The stipulation overrides the tenants rights under S. 3.If the tenant erects a permanent structure in contravention of the stipulation he is not entitled to any compensation under Section 3. As he is not entitled to any compensation under Section 3, he cannot claim the benefit of Section 9. The High Court rightly held that the appellant was not entitled to the protection of Section 9.