Case: Haridas Girdhardas &amp; Others Vs. Varadaraja Pillai &amp; Another

2. The plaintiffs had filed a suit on the following allegations. The plaintiffs who were landlords leased to defendant No. I the plot of land on Mount Road, Madras, under a duly registered lease deed dated November 17, 1938, for a period of 15 years 3 months from March 1, 1939 at a rent of Rupees 560/- per month on the terms and conditions set out therein with an option for renewal in favour of defendant No. 1 for a further period of 10 years from March 1, 1954 but at an enhanced rent of Rupees 630/per month, and subject to the other stipulations except the clause for renewal. For our purpose the following clauses areThe Lessee covenants with the Lessors as follows:-(c) Within a reasonable period from the date hereof, at his own cost and charges, under the supervision of the Lessors and in accordance with plans, elevations, sections and specifications to be first approved by the Lessors, erect, cover in and complete in a substantial and workman like manner on the demised plot of land. a theatre with all proper offices and out buildings such as bazars, restaurants, motor and dunamo sheds etc., and fences, drains, sewers to be used for production and exhibition of films and for staging Drama therein and to expend in building such theatre a sum of not less than Rupees 50,000/-. The Lessee shall be at liberty to put up other buildings in addition to the above.(d) Not to have an entrance for the theatre going public from the General Peters Road, so long as the Police Authorities do not permit such access from the said road.(f) In the erection and completion of such buildings to do all acts and things required by and perform the works conformably in all respects with the provisions of the statutes applicable thereto and with the by-laws and regulations of the Corporation of Madras to pay and keep the Lessors indemnified against all claims for the fees, charges, fines, penalties and other payments whatsoever which during the progress of the works may become payable or be demanded by the said authorities in respect of the said works or of anything done under the authority herein contained and from time to time discharge and pay all claims, assessments, outgoings now or at any time hereafter chargeable against an owner by Statute or otherwise in regard to the said plot of land or any buildings thereof, save and except the property tax and quit rent levied on the demised plot of land which alone shall be born by the Lessors.(g) Not at any time to cause or permit any public or private nuisance in or upon the demised plot of land or anything which shall cause unnecessary annoyance, inconvenience or disturbance to the Lessors or to the occupiers of any adjoining or neighbouring premises or which shall lead to interference by the Police or Local Authorities and at all times to comply with all Municipal and Police requirements.(h) Not to install or cause to be installed on the demised land or any part thereof any petrol pump, without getting the Lessors previous permission in writing and without providing sufficient safeguards to the Lessors neighbouring owners and their other tenants.(o) Not to put up a compound wall on the southern side of the demised plot but to put up only iron railing or bars with a low wall if necessary, not exceeding three feet inIt was further agreed between the lessor and(d) At the expiration or sooner determination of the tenancy, the Lessors shall have the option of buying the buildings to be erected on the demised land the basis of valuation being as follows :-The buildings shall be valued at Rupees 50,000/- irrespective of the actual cost of construction and the Lessee shall allow a depreciation of 3 per cent per annum, the period being calculated for the purpose of this valuation from 1st March 1939. If within a week from such termination of tenancy the Lessors do not signify their willingness to purchase the building or erections at the aforesaid valuation from the Lessee, the Lessee shall within three months thereafter remove and carry away any buildings or erections on the demised plot of land and shall cause to be restored to its original or natural level state and condition the demised plot of land.Defendant No. 1 in accordance with the stipulations in the lease deed, constructed a theatre on the said plot and the same has been used for exhibition of cinema films by him. Defendant No. 1 exercised the option of renewal of lease for the further period of 10 years from March 1, 1954 and has been continuing in possession for a full further term of 10 years from March 1, 1954 expiring with the month of February, 1964.5. In accordance with the terms of Clause 4 (d) of the lease deed, the plaintiffs exercised the option of buying the buildings erected on the demised land by letter dated February 27, 1964 and sent along with the full amount of Rupees 50,000/- by cheque in payment for all the superstructure without deducting any amount for depreciation, as provided in the. said clause of the lease deed, stating that they had decided not to stand on their strict legal rights to deduct depreciation but to pay the full price of Rupees 50,000/- as the buildings had been maintained and kept in good repair. Defendant No. 1 however, refused the sum of Rupees 50,000/- and contended that the plaintiffs were not entitled to claim any rights on the footing of Clause 4 (d) of the lease deed or to offer the sum of Rupees 50,000/- as the price for purchasing the superstructure put up by him on the land leased to him.

Court's reasoning:
7. This Court construed the said Act and its various provisions in N. Vajrapani Naidu v. New Theatre Carnatic Talkies, (1964) 6 SCR 1015   = (AIR 1964 SC 1440  ) and in The Mylapore Hindu Permanent Fund Ltd. v. K. S. Subramania Iyer, AIR 1970 SC 1683   at pp. 1691-92. The second decision was not before the High Court when the Letters Patent Bench rendered its judgment. It seems to us that the case is covered by the judgment in the Mylapore Hindu Permanent Fund case. In that case Vaidialingam J., speaking for the Court, observedin our opinion, the decision in Vairapanis case (supra) has been misunderstood by the learned Judges of the Letters Patent Bench and the said decision is no authority for the proposition that the stipulation contained in the lease deed before us cannot come within the proviso to Section 12. The case before us is not one under which the tenant has in any manner contracted himself out of the rights conferred on him by the statute. On the other hand by allowing the building to stand on the property and agreeing to receive the amount of compensation provided for in the lease deed, the object of the legislation is fully satisfied. It must also be emphasised that the first part of S. 12 protects a tenant against the deprivation or limitation of his rights under the Act and the rights conferred by the Act do not directly relate to covenants relating to erection of buildings.Considering the facts of that case this Court held that Clause 2, in he deed, read with Clause 4, amounted to stipulations as to the erection of buildings and, in this view the proviso to Section 12 applied.9. We have set out the relevant clauses of the lease deed in this case and it seems to us that these clauses amount to a stipulation as to the erection of buildings and consequently the proviso to Section 12 applies.10. Mylapore Hindu Permanent Fund case, AIR 1970 SC 1683   was sought to be distinguished by the learned counsel for the respondent on the ground that in the present case the defendant was entitled to put up the building beyond the value of Rupees 50,000/-. But Clause 2 (c) of the lease deed, set out above, clearly shows that the plaintiffs required "a theatre with all proper offices and out buildings such as bazars, restaurants, motor and dunamo sheds etc., and fences, drains, sewers to be used for production and exhibition of films and for staging drama therein" to be erected. The plaintiffs wanted to ensure that the cost of the building would not be less than Rupees 50,000/- in order that the building would be of a proper quality of construction. There is no evidence as to what other buildings the defendant had put up. On these facts we cannot say that these were not stipulations as to the erection of buildings within the meaning of the proviso to Section 12.11. It must be remembered that the Madras City Tenants Protection Act, 1921, was passed in 1922 to give protection to certain classes of tenants who had constructed buildings on others lands in the hope that they would not be evicted so long as they paid a fair rent for the land. It was not the object of the Act to cover hope if the hope was entertained contrary to express stipulations as erection of buildings. Accordingly proviso to Section 12 exempted and stipulations made by the tenant in writing registered as to the erection of buildings, in so far as they related to buildings erected after the date of the contract.