D. N. Sanghavi & Sons v. Ambalal Tribhuwan Das

/J. V. Patel A. T. M. Sampatlz, M. M. L. Srivastava and £. C. Agarwa!a, for'the respondent. lh~ J1J;n,:it·or th! Court was delivered by DIVIVEDI, J. -Th: facts of this case fall within a short compass. The respondent, Amba Lal Tribhuwan-Oas, is the owner of the suit ac:;ommodation. It is situated in Siyaganj, Indore. The appellants 2 to 4 are cirrying on business in the name of the first appellant, D. N. Singhavi and Sons. Th!y are the tennants of the accommodation. Courts b!low have held that it was. being used predominantly as a shJp by them and that a pirt of it was being used by them as their residence for the sake of more of efficient conduct of the business they were cirrying on in th: shop. The resp:indent purchased the shop some time in 1963. The ap;i!llant wore then carrying on their business in the shop". 1h!Y attarne:I to the respondent. On October JO, 1964 the res­ pJndent give the requisite notice to them to vacate. On November 16, 1954 h• instituted a suit for their ejectment from the accommoda­ tion. It wds allez:d by him that he . needed the accommodation for cJntinuing"his business" within the meaning of s. 12 (I) (f) of the M1dhya Pradesh Acc0mmo:lation Control Act, 1961 (hereinafter called th! Act). At the evidence stage he gave evidence that it was needed for putnership business. There arose two crucial questions in the case: (I) What is the m:aning of the phrase "his business" in s. 12(1)(f)? (2) Whether in the circumstances of the ca•e the business for which he required the ac~ommodation could be said to be "his business". The first qu.,tion arose because he wanted the accommodation for con­ tinuing the businoss of a p1rtnership firm of which he was one partner. Th!fe w!re tw0 other p1rtners. They are his brothers. The trial court held ag1inst the respondent on the second issue and dismissed the suit. No view was expressed on this issue. The respondent filed an appeal from the ju:lgn,nt. The ap;nal court reversed the judgment and decreed th' suit for ejectment of the appellants. The appeal court recorded this . fin:iing of fact " ...... Ambalal (plaintiff) has stated ...... that the p1rtner3hip shop was previously run by his father. It is now run by the brvthers in p1rtnership. This business is thus of the family alone. Their shJ;> is at Siyagmj itself where the premises in suit are situate.',' On this fin:iing the app!al court reached the conclusion that the business of th' pirtnership firm, of which he is one partner is "his business" r A • I E .A ' D. II, IANG~Y.I " soils v. AMBALAL (Dwivedi, J.) 57 within the meaning of s. 12(l)(f). As the firm's business was hirg carried on in a rented premises, his need was found to be grnume. 1 he appellants then filed an appeal in the Madhya Pradesh High Court from the judgment of the appeal court. 1he High Court has upheld, the judgment of the appeal court. It is noteworthy that the appeal court has simply assumed that the partnership business is "his businus". No reasoning$ are given in support of the conclusion. 1he High Court agreed with the appeal court that the firm's business of which the respondent was one partner is "his business". 1he reasoning of the High Court in support of this conclusion Is summed up in the following passage in thejudgment: "In the present case what we are concerned with is whether the landlord can be said to have the necessity when the need was for the partnership firm. It cannot be doubted that when a p!rson runs a business in partnership with others he does it for him;elf and therefore his necessity is identified wifh the necessity of the firm. Whether he wants to do business himself or he does it along w i h c.thrs t still remains that he needs it for his own purpoic." It is evident from this passage that the High Court, like the appeal court, has overlooked the words of s. 12(l)(f) in arriving at its con­ clusion. The High Court considered that it is an elementary proposition of law that a partnership business is the business of each and every partner so that it will be "his business." It seems that the High Court was misled by the apparent meaning of this phrase so that the neces­ sity of examining the scheme of the Act and the setting of clause (f) of s. 12(1) to discover its real meaning was not felt at all. But this is the first thing on which the High court should have fixed attention. After all, it is a matrer of statutory construction. And in such a case all attempts at construction should converge on the statute at hand, lest the reasoning should become abstract and artificial, having no contact with reality. The High Court has ought support from a decision of the erstwhile Nagp\lf High Court. (Rainikla/ and Co. vs. Vitila/ Pandurang Kawade and another)(!). Here again, the High Court did not take care to IIOJ tpJ1,IM M~J 01(~ UOOMJoq SO)i!l~J!WfSS)P·PU~ SO!J)J~)!WfS 01{1 OO!JOU · or constderatton ID that case and the law which falls for construction n this appeal. With. these preliminary comments, we pass on to the real issue : What does "his business" mean ins. 12(I)(f)? 1he meaning is to be determined by ex.amining the object of the Act and the setting of the phrase "his business". The Act deals with the difficult problem of sca~city of accommodation and seeks to distribute accommodation in II. fair way amongst those whd need. The Act professes· to control letting and rent of accommodation and the eviction of tenants therefrom. The Act restricts the power uf the landlord to let and to rack-rent at will. It also restricts his pow<r to eject the tenant at will. Thus the direct and immediate object of the Act is to ensure occupation of accommodation by them who are in need of it. Broadly speaking, a construction which fulfils this purpose should be preferred to the alternative construction which furstrates it. · I. Al.R. 19S2 Naapur 312. 58 SUPREME COURT REPORTS I 19741 3 s.c.ll. Chapter III controls eviction·oftenants. Section 12 is the first pro· vision in this Chapter. We are now reading the material portions of s. 12: "Section 12(1)(e) : that the accommodation let for residential purposes is required bonafide by the landford for occupation as a residence for himself or for any member of his family, if he is the owner thereof. or for any person for whose benefit the accommodation is held and that the landlord or such person has no other reasonably suitable residential accommodation of his own in his occupation in the city or town concerned : (f) that the accommodation let for non-residential purposes is required bonafide by the landlord for the purpose of continuing or starting his business or that of any of his major sons or un" married daughters if he is the owner thereof or of any person for whose benefit the accommodation is held and that the landlord or such person has ·no other reasonably suitable non-residential accommodation of his own in his occupation in the city or town concerned; (4) where a landlord has acquired any accommodation by transfer, no suit for the eviction of tenant shall be maintainable under sub-s. (I) on the ground specified in clause (e) or clause (f) thereof, unless a period of one year has elapsed from the date of the acquisition. (5) where an order for the eviction of a tenant is made on the ground specified in clause (e) of sub-section (I), the landlord shall not be entitled to obtain possession thereof before the expiration of a period of two months from the date of the order. (6) where an order for the eviction of a tenant is made on the ground specified in cl. (f) of sub-section (I), the landlord shall not be entitled. to obtain possession thereof- ( a) before the expiration of a period of two months from the date of the order : and (b) if the accommodation is situated in .... Indore .... unless the landlord pays to the tenant such amount by way of compensation as may be equal to ..... . (i) double the amount of the annual standard rent of the accommodation in the following case• : (a) where the accommodation· has for a period of ten complete years . immediatly preceding the date on which the landlord files a suit for possession thereof, been used for business purposes or for any other purpose along with such purposes, by the tenant who is being evicted. '· D' ' F I I D. N. SANG~VI & SONS v. AMBALAL (Dwivedi, 1.) 59 (b) where during the aforesaid period of ten years, the tenant carrying on any business in the accommodation has left it and the tenant im­ mediatly succeeding has acquired the business of his predecessor either through transfer or inheritance. (ii) the amount of the annual standard rent in other cases." Section 17 provides that where, after ejecting the tenant, the land­ lord does not occupy the accommodation within two months of ob­ taining possession, or transfers or re-lets it witnin two years therwf, the rent Controlling Authority may, on an application made in this behalf by the evicted tenant, direct the landlord to put him in posses­ sion of the accommodation or to pay him such compensation as the Rent Controlling Authority may think fit. This compensation shall be over and above the compensation which has already been paid to the tenant under s. 12(6). In a similar way, section 18 provides that where the landlord has ejected the tenant for the purpose of repair­ ing of rebuilding the accommodation and does not commence the work of repairing or rebuilding within one month of the date speci­ fied in the order for ejectment or fails to complete the work in a reason­ able time or having completed the work fails to place the tenant in occu­ pation of the accommodation, the court may, on an application made in this behalf by the tenant, direct the landlord to give posses­ sion to the teriant or to pay to him such compensation as the court may think fit. Section 39(1) requires the landlord to inform the Collector whenever any accommodation has fallen vacant or is likely to fall vacant The Collector may then direct him to Jet or not to let it in accordance with the ]lrovisions of the Act. Section 39(2) gives preference to certain class of persons in the matter of letting. It is not neccessary to mention them here. But the first proviso to s. 39(2) is important for this case. It reads : "Provided that if the landlord has in the information given ...... under s. (I) stated that he needs the accommodation for his own occupation,.the Collec­ tor. . . . . shall, if satisfied after due inquiry that the accommodation so needed is proper, direct the landlord to occupy the same under the proviso the accommodation may be allotted to the landlord if he makes out a case that he needs the accommodation for "his own occupation". A review of these provisions would show that the Act is more strict with respect to the eviction of tenant from a non-residential accommodation than from a residential accommodation. Jn the case of a residential accomodation, section 12(1) (e) provid<S for the eviction of a tenant where it is needed for the residence of the landlord or for any member of his family. But he cannot sue for eviction of a tenant from a non-residential accommodation where he needs it for continuing or starting his major married daughter's business. Nor he can evict a tenant from such accommodation for continuing or starting his brother's business. Thus while 60 SUPREME l;;OURT REPORTS ( 1974] 3 S.C.R. cl. (e) of s. 12(1) is more hospitable to the landlord, cl.(f) thereof A is more pr~tective of. the tenant. Sut-.section (4), (5) and (6) of s. 12 also pomt to this contrast. While the tenant evicted from a residential accommodatio':' gets a respite .of 14 months, the tenant evtc!ed from a non-res1dent1al accommodat1on g€ts not only the said respite but also the. prescribed compensation. Jn many cases the bur- den of compe!lsation may act as a deterrent to eviction. Having regard to the ngour of cl.(f) of s. 12(1) we think that the phrase"his B buss1ness" should not receive a wide, construction as to the class of persons wh~ may be included in the possessive pronoun 'his' in the phrase, for 1t would be against legislative policy. Section 39 control' the Jetting of an accommodation, resicential as well as non-residential, which has fallen vacant or is likely to fall vacant. The first proviso to sub-section (2) of s. 39 provides that at the request of the landlord such accommodation may be allotted to him if he needs it "for his own occupation." As section 39 deals with a residential as well as a non-residential accommodation. the expression "his own occupation" in the first proviso should be ampli- fied to read as "his own occupation by way of residence or business". Clauses (e) and (f) of s. 12(1) are complementary to the fast proviso to s. 39(2). While the first proviso enables the landlord to obtain possession of a vacant accommodation for his own occupation by way of residence or business, section 12(1) (e) enables him to obtain a residential by accommodation for his or his family's residence by ejecting a tenant. Similarly, s. 12(1) (f) enables him to obtai.n a non­ residential accommodation for continuing or starting "his business" by ejecting the tenant. Considering the complimentary nature of s. 12(1) (f), we have little doubt in our mind that the words "for the purpose of continuing or starting his business" in the section should be amplified to read as "for the purpose of his own occupation by way of cotinuing or starting his business." It cannot be legitimately complained that we are trying to redraft cl. (f). This amplification is necessarily implied, for we think that the legislature intended to use the phrase "for the purpose of continuing or starting his business." as a synonym for the phrase "for his own occupation" in the first proviso to s. 39(2) as explained earlier. The words "in his occu­ pation" at the end of cl. (f) fortify our construction. Again, the word "own° in the phrase "his own occupation" should not be discarded as redundant. It seems to us that the Legislature has deliberately used it to add emphasis to the possessive force of the pronoon "his". (see the Shorter Oxford Dictionary, 3rd Edn. P. 1409) It connotes the idea that the accommodation is needed directly and substantially for his occupation. On this construction of cl. (f) of s. 12(1), it is necessary for the respondent to prove that the accommodation is needed direc/ly and substantially for his occupation for the purpose of continuing or starting his bu,iness. H The respondent has stated in his evidence that he and his two brothers are carrying on a partnership business in a rented shop in I I o. N. SANGltAVI & sONS v. AMBALAL (Dwivedi, /.) 61 Siyaganj. He has further said that he needs the suit accommodation for that purpose. The appeal court has believtd this evidence and has: recorded ~he finding that the respondent bonafide requires the accom·. modation for his partnership business. But this finding does not: fulfil the conditions of cl. (f) of s. 12(1) as construed by us. Unfortu, nately for him. the respondent did not lead any evidence to show that the accommodation was needed directly and substantially for his occu. B pation by way of business. He filed the registration e<rtificate •how. ing that the partnership was registered with· tlie Registrar of Firms, The certificate will only prove as to who are the partnus of the firm, nothing more The respondent did not file the deed of partnership. It would have disclosed whether the r<spondent is a mere sletping partner or a partner who is entitled to manage the business eithtr solely or with other partners, or that they are the sole managing part- C ners. 0 Jn his examination he has said that he was a partner in the firm. He has also said : "There is no proper accommodation for carrying on business in Indore by the m<mbus of his family" Jn Cross-exami· nation he has said : "In the members of my family there are two of my brothers Nand Kishore and Mani Lal. their wives and children and my mother are included For our residence and running the shop: we netd the disput<d 'shop." No doubt he has stated that he needs, the suit accommodation for his residence also. but the lov.·Er courts did not examine the need for reridrnce. Before the appeal court counsel for the parties had stated that the suit for eviction of the tenant shoulq be dis;>osed of only on the basis of s. 12(1) (f). The respondent thus abrndoned his case tased on s. 12 (I) (e) which deals with residential accommodation. So we are concerned with his need for business accommodation. The pas~age in his statement, earlier reproduced would seem to sugg~~t that his notion of 'hi~ business' is inclusive of his brothers' business in which he may have no conccrn at all. So 1he possibility of his brothers' S<parate business being sel up in tho suit accommodation is not ruled out. However, we do not ground our.judgment on this stetement. In his evidence he has said : "We, the three brothers and father are the partners in the shop: There is no person from outside. Before the partnership my father. used to run the shop. (The father died during pendency of the suit)". He also said : "We deal in bidi, cigarettes, match<S, tobacco and soap., We also want to have the same business in the disputed shop." IQ neither of these two passag<S nor anywhere else in the evidence he has stated that on fhe terms of partntrship he is entitled to manage the partnership business or even that he would also occupy the suit accommodation along with his partners on obtaining posS<ssion from the appellants. He has also not said that the other parmcrs have agreed to shift the businrn. If the deed of partnership has excluded him expressly or impliedly from th~ management of firm's business and has made him a sleeping partner, it cannot be held that the accommodation is needed directly and substantially for his occupation hy way of business: Nor he has 62 SUPREME COURT REPORTS ! 19741 3 s.c,a. power to shift !he business. To sum up, for the reasons already given, his suit should fail. Counsel have referred us to a large number of decisions. Such of them as appear to us to be relevant in this case will alone be noticed by us. We shall make no reference to the others. In Rajnik/a/ and Co. (supra) the decision turned on the meaning B of the phrase "business of his own" in cl. 13(3)(vi)(c) of the C.P. and Berar Letting of Houses and Rent Control Order, 1947. The Nagpur High Court confined itself to that single phrase and did not refer to the object and setting of the order. Jn our case the conditions of s. 12(1)(f), as construed by us, are apparently different from those of cl. 13(3)(vi)(c) of the order. So it is not helpful in this case. In Tansukhdas Chhaganla/ vs. Smt. Shambai(I), the Nagpur High C Court has held that where a tenant carrying on business in the demised shop converts the business into a partnership business and allows the latter business to be carried on in the demised premises, it would amount to sub-letting becaust the partnership "was clearly a personality in law distinct from that of the petitioner himself." There also, the High Court was concerned with cl. 13 of the aforesaid Order. This statement ¢' law does not appear to be universally true. However, as D pointed out earlier, in respect of Rajnik/a/ (supra) it is sufficient for us to say that this case also is not helpful in this appeal. Commissioner of Income-tax, West Bengal vs. A. W. Figgies and Co.(2) and Dulichand Lakshminarayan vs. The Commissioner of lncomcotax Nagpur(3) are concerned with the legal character of a firm in the In- come-tax Act. It is held that a firm is a distinct entity different from E its partners for purposes of assessment. These decisions are based on particular provisions of that Act which are radically different from the provisions of the Act. So these cases are also not helpful in deci- ding the present appeal. Karsandas Ramji vs. Karsanji Ka/yanji(4) and Gundalapalli Rangama- nnar Clzetty vs. Desu Rangialz(5) discuss the very question which fell F for consideration in Tansukhdas Clzhagan/a/ (supra). It was held on the facts of these cases that the tenant could not be held to have sub- let the rented premises to the partnership firm because they retained possession over the premises. These cases thus apply the test of occu­ pation by the tanant in finding out whether he has or has not sub-let. These are all the· relevant Indians cases cited before us. Sri Patel has also relied on three English cases: (1) Clift. v. Taylor,(6) Tunstall v. G Steigamann(') and Gian Singh & Co. vs. Devraj Narar and Others. (B) Clift takes the same view as Rajnik/al (supra). The decision turned on the meaning of the expression "required the premises for his own occupation" in s. 5(3)(b)(i) of the Landlord and Tenant Act, 1927. There the landlord carried on a business in a part of the building in (I) A.I.R. 1954 Nagpur 160. (2) [1954! S.C.R. 171. H (3) [1956] S.C. R. 154. (4) A.l.R. 1953 Saurashtra 113. (5) A.LR. 1954 Madras 182, (6) [1948] 2 A.E.R. 113. (7) [1962] 2A.E.R. 417. (8) [19651 I A.E.R. 768. > I D. N. SANGNAVI & SONS v. AMBALAL (Dwivedi, J.) 63 dispute; in another part of it the tenant carried on her business. On the eve of the expiry of her lease, she applied for a new lease. Her application was opposed by the landlord on the ground, inter alia, that he required the premises for his own occupation. The facts found were that he had converted his own business into a partnership business. There were six partners including himself. The partnership business had extended considerably so that there was scarcity of accommodation. It app,ared that the landlord needed the demised premises for the pur­ pose of his partnership business. So the issue was whether he needed the premises "for his own occupation." The finding was: "The firm and he himself, as its senior partner, had great need for less cramped head office premises, and, in particular, for the free and full use of the ground floor on street level as essential to convenience of office work, for clients, and for display of notice etc., and indeed, it was necessary for the prosperity of the greatly enlarged and still growing business with its remifications into many allied or compatible departments or activi­ ties." It is evident from this finding that the landlord was a managing plrtner and that he himself along with the firm was to occupy the demised premises after getting possession. This decision, far from helping Sri Patel, helps the appellants in view of the construction pla­ ced by us on clause (f) of s. 12(1 ). Tunstall (supra) deals with an enti­ rely different set of facts. There the landlord was carrying on busi­ ness. She gave notice to the tenant that she wanted the rented shop for her own business. The notice was given under the Landlord and Tenant Act. 1954. In the meantime she transferred her business to an incorporated company. The relevant words of s. 3l(g) of that Act are : "to occupy the holding for the purpose .... of the business to be carried on by the landlord." It was held that the business of an inoorporated company was not the business of the landlord the com­ pany being a distinct legal pmon different from the landlord. Gian Singh (supra) was concerned with the construction of a particular clause in a covenant forbidding the tenant from assigning his tenancy to a third p!rson. It is claimed by the landlord that the tenant ha~ assigned the premises to a partnership firm of which he was a partner. On the facts of the case, it was held that there was no assignment. We fail to appreciate .how these cases help Sri Patel. In some of the cases cited by Sri Patel, 'own' has been interpreted virtually as otiose. Nevertheless what it means in the Act would depend on its own context, for a word may take a colour from its con­ text. In view of our decision against the respondent on the basis of the construction of s. 12(1)(f) it is not necessary for us to decide several other points raised by Sri Phadke. The appeal is allowed with costs (one set only). The decision of the courts below are set aside and the suit of the respondent is dis­ missed. s.c. Appeal allowed.