In order that the lease should be covered by the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, the lease should be of a building as defined in Section 2(iii). = The lease is of a Saw mill machinery which is covered by a zinc sheet shed. The dominant purpose of the lease is to lease out the machinery. The shed is only an adjunct. It is also pointed out that a covering over the machinery in the shape of a structure consisting of zinc sheets supported on poles can hardly be called a house or even a hut. In any case, looking to the dominant purpose of the lease, the two courts below have rightly come to the conclusion that the lease is not covered by the provisions of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act. 1960.”
THE HON’BLE SRI JUSTICE K.C.BHANU
C.C.C.A. No.259 of 2008
1. This appeal is directed against the judgment and decree dated 06.08.2008, passed by the XIII Additional Senior Civil Judge, City Civil Court, Secunderabad, in Original Suit No.111 of 2003, whereunder and whereby the trial court decreed the suit filed for recovery of possession of plaint schedule property, arrears of rent and past and future mesne profits, with costs directing the defendants to deliver the vacant possession of suit schedule property to the plaintiffs by removing all structures, if any, at the cost of the defendants within 2 months from the date of judgment, and further directing the defendants to pay a sum of Rs.8,100/- as arrears of rent along with interest @ 18% per annum from 16.3.2001 till realization, and the plaintiffs are directed to file a separate application for ascertainment of past and future mean profits.
2. The appellants herein are defendants and the respondents herein are plaintiffs, in the suit. For better appreciation of facts, the parties are hereinafter referred to as they are arrayed before the trial court.
3. The plaintiffs filed the suit stating as follows:
The plaintiffs are absolute owners of the suit schedule property. Smt M.P. Bhageeratamma who is grand mother of plaintiffs 1 to 4 and the original owner of the property executed a Will dated 17.04.1961 in favour of the plaintiffs 1 to 4. Plaintiffs 5 and 6 are the sons of M.P. Anantha Padmanabha Swamy, who died after the execution of Will. During the life time of said M.P. Bhageeratamma, the suit property was let out to Standard Vacuum Oil Company of Newyork on lease for a period of 10 years commencing from 15.02.1969, for the purpose of storing and selling and otherwise carrying on trade in petrol and petroleum products.
The suit schedule property leased out was the open land and the monthly rent was fixed at Rs.200/- payable on or before 5th of every succeeding month. The lease was expired on 15.2.1970, and the same was not renewed and the tenancy became month to month commencing from 16.2.1970. During the course of time, the rent was enhanced from time to time to Rs.600/- per month. The defendants company had defaulted in payment of rents and failed to pay the rents due from January, 1993, in spite of repeated reminders by the plaintiffs. The defendant is liable to pay the rents from January, 1993, but however the plaintiffs are restricting their claim for arrears of rents only from 16.1.2000 to 15.3.2001 in view of the period of limitation. The plaintiffs constrained to terminate the tenancy by issuing a notice on 15.2.2001, and called upon the defendants to deliver the vacant and peaceful possession of the suit schedule property and also directed the defendants to pay the arrears of rents for 29 months amounting to Rs.23,400/- and also claimed damages @ Rs.25,000/- per month from 16.3.2001 till the date of delivery of actual vacant possession, with interest and also past and future mesne profits.
4. The defendants 1 and 2 filed written statement denying the averments made in the plaint stated that until the Will dated 17.4.1961 is proved as per law, the plaintiffs cannot acquire absolute rights over the plaint schedule property. The defendants were regularly sending rents to M.P. Ananthasena, but the same were being returned. The defendant corporation could not get the details of all the legal heirs of Smt Bhageerathamma, despite of its efforts, so as to enable it to pay the rents to them. They are not aware about the execution of Will dated 17.4.1961. Notice dated 15.2.2001 is not valid in the eye of law. The defendants are not liable to pay any amount or damages much less at Rs.25,000/- per month and sought for dismissal of the suit.
5. Basing on the pleadings the following issues were framed for trial:
1) Whether the plaintiffs are entitled for recovery of vacant possession of suit schedule property by evicting the defendants there from?
2) Whether the plaintiffs are entitled for arrears of rents of Rs.8,100/- as prayed for with interest?
3) Whether the plaintiffs are entitled for past mesne profits @ Rs.25,000/- p.m from 16.3.2001 to 31.01.2003 amounting to Rs.5,62,500/-?
4) Whether the plaintiffs are entitled for future mesne profits @ Rs.25,000/- from the date of suit till recovery of vacant possession?
5) Whether the quit notice dated 15.2.2001 is not valid?
Whether this Court has no jurisdiction to try the suit as alleged in para 9 of Written Statement?
6) To what relief?
6. During trial, on behalf of the plaintiffs, P.Ws.1 to 3 were examined and Exs.A.1 to A.12 were got marked, and on behalf of the defendants, D.W.1 alone was examined and Exs.B.1 to B.13 were got marked.
7. The trial court after considering the entire evidence on record, decreed the suit as stated above. Challenging the same, the present appeal is filed by the defendants.
8. The learned counsel for the appellants contends that Ex.A.2 lease deed would clearly go to show that the vacant site, along with structures thereon, was given on lease and the rent payable is less than Rs.600/- per month, and so, the civil court has no jurisdiction to try the case and the landlord has to approach the Rent Control Court. He also contends that even assuming for a moment that the only vacant site was given on lease for the purpose of petroleum business, since subsequently constructions were made, it would come within the purview of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 (for short, ‘the Rent Control Act’), and therefore, the civil court has no jurisdiction.
9. On the other hand, the learned counsel for the respondents contended that Exs.A.1 and A.2 would clearly go to show that only a vacant land was given to the defendants on lease for the purpose of carrying on petroleum business and that the plan attached to the lease deed is only a proposal for making constructions and the dominant intention of the landlady is to lease out the land only but not raise any structures, and therefore, the civil court has got jurisdiction to try the same, and considering these aspect, the trial court rightly decreed the suit and there are no grounds to interfere with the impugned judgment and decree.
10. The points that arise for determination in this appeal are:
(1)Whether the civil court has got jurisdiction to try the suit as urged in the written statement ?
(2) Whether quit notice issued by the plaintiffs to defendants is valid and if so, whether the defendants are liable for eviction ?
(3) Whether the defendants are liable to pay damages for use and occupation of plaint schedule property ?
(4) To what relief ?
11. POINT No.1: Whether the civil court has got jurisdiction to try the suit as urged in the written statement ?
Ex.A.2 which is the lease deed is not in dispute. Similarly, it is not in controversy that Ex.A.1 is the Will executed by Smt. Bhageerathamma in favour of the plaintiffs, who are grand children of executant, bequeathing the suit schedule property. As seen from Ex.A.1-Will, Smt. Bhageerathamma purchased an extent of 1100 sq. yards of site with a shed thereon on 6.8.1959. The recitals in Ex.A.1-Will also clearly show that out of the said extent of 1100 sq.yards, an extent of land of 550 sq. yards of site was given on lease to the defendants. The remaining half which contains a shed was given to some third parties, which is not the subject matter of the suit.
12. One of the terms and conditions in the Ex.A2-lease deed reads thus:
“The landlord hereby lets and the tenant hereby takes ALL THAT piece of land situate at Mahatma Gandhi Road in the registration sub district of Secunderabad, District Hyderabad, and more particularly described in the Schedule hereto and delineated on the plan hereto annexed being thereon surrounded by a red colour boundary line TOGETHER with all ways, passages, lights, drains, sewers, water courses, rights, easement, advantages and appurtenances whatsoever to the said piece of land belonging or therewith usually held or enjoyed AND TOGETHER ALSO with the right for the tenant to instal erect and maintain in and upon the said piece of land, roadways and pati__ and underground tank(s) attendant and any other building, erection or equipment whether of a permanent temporary nature for the purpose of storing, selling or otherwise carrying on trade in Petrol, Petroleum products, oil and kindred motor accessories and any other trade or business that can conveniently be carried on therewith TO HOLD the demised premises unto the tenant from the Fifteenth day of February, 1960 for the term of ten years (determinable as hereinafter provided) at the monthly rent of Rs.200/- (Rupees two hundred only) payable monthly on or before the fifth day of every succeeding English calendar month.”
A perusal of the above recitals would clearly go to show that it is only the land that was given to the defendants on lease for the purpose of carrying on the business.
13. The learned counsel for the appellants placed a strong reliance on the plan appended to this document which shows about the existence of store and sales room in the site, and contends that as on the date of granting of lease, there was a structure existing on the premises and when the structure is existing, it would attract the provisions of the Rent Control Act for eviction of a tenant. The said document was prepared on 12.8.1959. The lease deed was executed on 24.2.1960 but the effective date of commencement of lease was on 15.2.1960. If really the contention of the learned counsel for the appellants is to be accepted that this sales room, gas tank, high speed diesel tank and store room are in existence by the date of execution of Ex.A.2 lease deed, certainly there is absolutely no need or reason for the executant to make such structures, which will be useful for carrying petroleum business within six days after purchase of vacant site. The vacant site was purchased on 6.8.1959. Six days later, the lease deed came into existence. The plan annexed thereto contains the gas tank, HSD tank, Store & sales room, lubricant space and open space. Therefore, after entering into the lease, there is every possibility for making constructions by the defendants to make use of vacant site to run the petroleum business. This plan, which is only a proposal for making constructions suitable for petroleum business, must have been appended to the document. That is the reason why, D.W.1 who is the Area Sales Manager of the defendants, categorically admitted that the plan annexed to Ex.A.2 contains the proposal for establishment of gas tank, H.S.D tank, sales room, stores room and pumps, etc. So, on the own admission made by the D.W.1, it is clear that the plan appended to Ex.A.2 is only a proposal plan to make constructions to suit the business of defendants as indicated therein, but not the actual structures existing as on the date of lease agreement. So, it may not be necessary for the executant of Ex.A2 to make these structures within one week after purchase of the site. Therefore, from the evidence available on record, it is clear that it is only a vacant site that was leased out to the defendants for the purpose of carrying on petroleum business and after entering into lease agreement, the structures as shown in the plan attached to Ex.A2 came into existence.
14. It is the further contention of the learned counsel for the appellants that even if the land is taken on lease and with the permission of the landlord any constructions are made after lease, it would be brought under the purview of the Rent Control Act, and in support of the said contention, he relied on a decision in George Coronation Club, Rajam, Srikakulam District v. Potta Ramakrishna Rao (died) by LRs and others wherein it was held: (para 12)
“Basically, Ex.A.1 refers to vacant land, provides for construction of buildings by the lessee i.e. respondents herein. Therefore, even if the vacant land alone was leased out at the initial stage, at least from the stage after the building is constructed with the permission of the appellant, the lease becomes amenable to the provisions of the Act. A different situation would arise, if such a structure is brought about, without the permission of the landlord.”
No doubt the above decision would go to show that if, at the initial stage vacant site was taken on lease and subsequently any building was constructed with the permission of the land lord, such lease becomes amenable to the Rent Control Act. A decision is only an authority for what it actually decides and not for what may logically follow from it. On this aspect, it is pertinent to refer to a decision of the Apex Court in State of Orissa v. Sudhansu Sekhar Misra, wherein it is held thus:
“A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it.”
The observation made by this Court amounts to obiter dicta. In the course of a suit, many incidental questions arise indirectly connected with the main question, for consideration. The observations on such questions, whether usual or of collateral relevance, are known as ‘obiter dicta’. It is an expression of opinion by this Court on a question immaterial to the ratio decidendi and unnecessary for the decision of the particular case. It is in no way binding on any Court but receive attention as being an opinion of this Court concerning the facts of that case. In the above decision, admittedly, a vacant land together with a building thereon was lease out under a lease agreement and thereby the jurisdiction of civil court is taken away. Therefore, the above decision has no application to the facts of the present case.
15. On the other hand, the learned counsel for the respondents placed strong reliance on the decision of this Court reported in Panga Illayya v. Neethi Mahalakshmi wherein it was held:
“Ex.A5 is the Caveat petition lodged by the appellant before the Rent Controller-cum-Principal District Munsif, Srikakulam. Elaborate submissions were made by the learned counsel for the respondent and specific portions of the Caveat petition have been pointed out to show that clear admissions were made that what had been let out to the tenant was only a vacant site but the mere fact that subsequent thereof for the purpose of running a hotel, he raised certain super structures would not alter the nature of the property as far as the question of tenancy is concerned.”
16. He also relied upon a decision reported in Suryakumar Govindjee v. Krishnammal and others wherein it was held:
“There is no difficulty in determining the scope of the lease where a building and a piece of land are separately let out. But in the case of composite lease of land and building, a question may well arise whether the lease is one of land although there is a small building or hut on it (which does not really figure in the transaction) or one of a lease of the building (in which the lease of land is incidental) or a lease of both regardless of their respective dimensions. In determining whether a particular lease is of the one kind or another, difficulties are always bound to arise and it will be necessary to examine whether the parties intended to let out the building along with the lands or vice versa.
The decisions in T.K. Sivarajan v. Official Receiver, Nagamony Kumaraswamy v. S. Tiruchittambalam, Official Trustee v. United Commercial Syndicate and Raj Narain v. Shiv Raj Saran, relied upon by Sri Vaidyanathan, were instances where what the parties had in mind was only the lease of land, although there were certain petty structures thereon which were not demolished or kept out of the lease but were also lei out. They were clearly cases in which, we think, the applicability of the Rent Act was rightly ruled out. On the other hand, Larsen and Toubrois a case where there was the lease of a building although a vast extent of land was also included in the lease. That was not a case which arose under the Rent Control Act but it illustrates the converse situation. Sri Vaidyanathan wants to derive, from the cases referred to above and certain cases which deal with other aspects which become relevant while considering a composite letting, a proposition that the dominant purpose of the letting should govern. For instance, there are cases where factories, mills or cinema theatres are leased out and cases have held that the dominant object is to lease a factory, mill or theatre and that, even though in all these cases, the letting out of a building would be involved, the provisions of the Rent Control Act would not apply (vide Konijeti Venkayya v. Thammana Venkayya Peda Venkata Subbarao, Uttamchand v. S. M. Lalwani 352 and Dwarka Prasad v. Dwarka Das. But we think that this approach also seeks to oversimplify the problem. When we come down to consider the terms of a particular lease and the intention of the parties, there are bound to be a large variety of cases. If the transaction clearly brings out a dominant intention and purpose as in the cases cited above, there may be no difficulty in drawing a conclusion one way or the other. But it is not always necessary that there should be a dominant intention swaying the parties. There may be cases where all that is intended is a joint lease of both the land and the building without there being any considerations sufficient to justify spelling out an intention to give primacy to the land or the building. For instance, where a person owns a building surrounded by a vast extent of vacant lands (which may not all be capable of being described as appurtenant thereto, in the sense of being necessary for its use and enjoyment) and a party comes to him and desires to take a lease thereof, he may do so because he is interested either in the building or the land (as the case may be). But the owner may very well say: "I am not interested in your need or purpose. You may do what you like with the land (or building). I have got a compact property consisting of both and I want to let it out as such. You may take it or leave it." The fact in such cases is that the owner has a building and land and he lets them out together. He is not bothered about the purpose for which the lease is being taken by the other party. In such cases, it is very difficult to say that there is no lease of building at all unless there is some contra indication in the terms of the lease such as, for example, that the lessee could demolish the structure. The test of dominant intention or purposes may not be very helpful in such cases in the context of this legislation.”
No doubt, the above decision is not directly on the point. That is a case where when a piece of land and building were separately let out, it is held that there was no difficulty in determining the scope of the lease. If the transaction clearly brings out a dominant intention and the purpose, then there will not be any difficulty in drawing a conclusion in one way or the other. In the case on hand, as on the date of the execution of the lease deed, the dominant intention of the landlady is to give the vacant site to the tenant for the purpose of running a petroleum business. That should be the crux of the case in deciding whether the Rent Control Act applies or civil suit has to be filed for eviction of the tenant from the premises in question. As seen from the evidence available on record, it can safely be said that only the vacant site has been leased out to the defendants and giving a right to the defendants to raise constructions for the purpose of carrying out the petroleum business. Therefore, as on the date of execution of Ex.A.2-lease deed, when it is established by preponderance of probability that a vacant site was given on lease to the defendants, the Rent Control Act, has no application for the lease of the schedule property.
17. The Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 is enacted to consolidate and amend the law relating to the regulation of lease of buildings, the control of rent thereof and the prevention of unreasonable eviction of tenants therefrom in the State of Andhra Pradesh.
From this, it can be said safely that the Act applies to leasing of buildings.
‘Building’ has been defined under clause (iii) of Section 2 of the Act which means a house or hut let or to be let separately for residential purposes and which includes….. As seen from the evidence, when there is no building in the premises in question as on the date of lease agreement, the Rent Control Act has no application. On this aspect, it is pertinent to refer to a decision of the Apex Court in Koti Sarojanamma v. Jonnalagada Malleswara Rao, wherein it is held thus: (para 7)
“Looking to the evidence, it is clear that the shed, which has a zinc sheet roof, was erected only to protect the Saw mill machinery. What was leased out to the respondent was substantially the Saw mill machinery for the purpose of carrying on timber/Saw mill business.
The shed was merely erected to shelter the machinery.
The dominant purpose of the lease was to lease out the Saw mill machinery.
In order that the lease should be covered by the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, the lease should be of a building as defined in Section 2(iii).
It should, therefore, be a lease of any house or a hut or a part of a house or a hut let for residential or non-residential purposes. It would include gardens, grounds, garages and outhouses appurtenant to such a house or a hut. In the present case, however, the lease is not of any house or a hut or part of a house or a hut.
The lease is of a Saw mill machinery which is covered by a zinc sheet shed. The dominant purpose of the lease is to lease out the machinery. The shed is only an adjunct. It is also pointed out that a covering over the machinery in the shape of a structure consisting of zinc sheets supported on poles can hardly be called a house or even a hut.
In any case, looking to the dominant purpose of the lease, the two courts below have rightly come to the conclusion that the lease is not covered by the provisions of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act. 1960.”
There cannot be any dispute that in order to gather as to what purpose the lease was brought about in respect of certain property, reference must be made to the date on which the lease is brought into existence.
18. POINT Nos. 2, 3 and 4:
-Whether quit notice issued by the plaintiffs to defendants is valid and if so, whether the defendants are liable for eviction ?
-Whether the defendants are liable to pay damages for use and occupation of plaint schedule property ? and
- To what relief ?
It is an admitted fact that Ex.A2 is the lease deed executed between the parties. One of the contentions raised on these points is that Ex.A1, on which the plaintiffs are claiming title, is not proved.
Son of one of the attestors of Ex.A1 is examined as P.W.3.
He identified signature of his father on Ex.A1.
Nothing has been elicited to discredit his testimony.
Therefore, Ex.A1 is proved from the evidence of P.W.3.
Further, there is no dispute about issuance of quit notice under Ex.A3, which is completely in accordance with Section 106 of the Transfer of Property Act, 1882.
One of the terms of lease deed Ex.A2 would provide to the plaintiffs to recover possession of the schedule property.
After demise of M.P. Bhageeratamma, the defendants did not take any steps to pay rent to her legal heirs.
As Ex.A3 is in accordance with law, there is no other defence available to the defendants to continue in possession of the property.
19. In so far ascertainment of mesne profits, a separate application has to be filed, as rightly observed by the trial court.
With regard to mandatory direction to remove structures, it is needless to observe that at the time of delivering vacant possession, the defendants have to remove structures, as, under Ex.A2, only land alone was given for lease.
Therefore, the trial court rightly decreed the suit and the impugned judgment and decree need no interference by this court.
The appeal is devoid of merit and the same is liable to be dismissed.
20. The learned counsel for the respondents seeks time to vacate the premises in question by the defendants on the ground that the defendants have to secure suitable alternative accommodation to run the petroleum business.
Considering the facts and circumstances of the case, the respondents are directed to vacate the premises within one year from today, subject to payment of Rs.20,000/- per month commencing from 1st October, 2011 till the appellants vacate the premises, failing which the respondents/plaintiffs can recover the possession through process of court.
However, this amount is subject to mesne profits that may be ascertained by the trial court after enquiry.
21. Accordingly, the appeal is dismissed with costs confirming the judgment and decree dated 06.08.2008, passed by the XIII Additional Senior Civil Judge, City Civil Court, Secunderabad, in Original Suit No.111 of 2003.
THE HON'BLE SRI JUSTICE K.C. BHANU
C.C.C.A. No.259 of 2008
IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH
THE HON'BLE SRI JUSTICE K.C. BHANU
C.C.C.A. No.259 of 2008
M/s. Hindustan Petroleum Corporation Limited, rep. By its Managing Director and another
M.P.Jayanthswamy @ M.P.Jaya Ananthaswamy and others