Mst. Subhadra vs Narsaji Chenaji Marwadi

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 356 of 58

Decision Date: 9 August 1961

Coram: J.C. Shah, K.N. Wanchoo, K.C. Das Gupta, Raghubar Dayal

In the matter titled Mst. Subhadra versus Narsaji Chenaji Marwadi, decided on 9 August 1961, the Supreme Court of India delivered its judgment under the authorship of Justice J.C. Shah, with Justices K.N. Wanchoo, K.C. Das Gupta and Raghubar Dayal forming the bench. The petitioner was Mst. Subhadra and the respondent was Narsaji Chenaji Marwadi. The judgment was recorded on 09/08/1961 and the case is reported in 1966 AIR 806 as well as in 1966 SCR (3) 98. Citations also appear in later reports such as R 1970 SC 1475 (4) and OPN 1980 SC 590 (4). The statutory provisions involved were Section 5(8), Section 6 and Section 11 of the Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947 (57 of 1947), relating to the concept of “premises” and the assessment of standard rent for land that had been assessed for agricultural purposes under the Bombay Land Revenue Code, 1879.

The factual backdrop described in the headnote indicates that the owner of a particular plot of land granted a perpetual lease of the land at an annual rent to certain individuals, who subsequently sub‑let the land to the respondent at a higher rent. The respondent, in turn, sub‑let the same plot to the appellant at an even higher annual rent. All three lease deeds contained a clause stating that the lessee might construct buildings on the land after obtaining the necessary sanction from the appropriate authority. At the times of each lease, the plot was assessed for agricultural purposes under the Bombay Land Revenue Code, 1879. The appellant later obtained permission from the Collector to convert the land’s use from agricultural to non‑agricultural purposes. Following this conversion, the appellant applied to the Court of Small Causes, Ahmedabad, for fixation of the standard rent of the plot under Section 11 of the 1947 Act. The respondent argued that because the land was originally granted as agricultural, the provisions of the Act were inapplicable.

The central question before the Court was whether the plot of land qualified as “premises” within the meaning of Section 5(8) of the Act. The Court held that the decisive factor for determining whether a plot constitutes “premises” is the date of letting, not the date on which an application for fixing standard rent is filed. Applying this principle, the Court concluded that on the date of the relevant lettings the plot could not be regarded as “premises” under Section 5(8) of the Bombay Act. Consequently, the appellant’s application for fixation of standard rent was not maintainable.

The judgment arose from Civil Appeal No. 356 of 1958, which was filed by special leave against the judgment and order dated 21 January 1955 of the Bombay High Court in Civil Revision Application No. 813 of 1953. Counsel for the appellant included S. T. Desai, S. N. Andley and Rameshwar Nath, while the respondent was represented by I. N. Shroff. The factual narration continued with the Court noting that Pot No. 68 in Town Planning Scheme No. 1, Jamalpur, Ahmedabad, forming part of Survey No. 405, Mouje Rajpur‑Hirpur, comprised approximately 38 Gunthas and was owned by Bai Jekor and her two sisters. By a lease dated 15 October 1934, the owners granted a perpetual lease of this plot to Gajjar Ramanlal Gordhandas and his brother at an annual rent of Rs. 558. The lessees, the Gajjars, subsequently sub‑let the plot by a lease dated 7 February 1946, continuing the chain of sub‑leasing.

In the original lease dated 15 October 1934, the owners conveyed the plot in perpetuity to Narsaji Chenaji Marwadi, who was thereafter referred to as the respondent, for an annual rent of Rs 1,425. The respondent later executed a deed on 25 April 1947 in which he sub‑let the same plot to Subhadra, who was thereafter referred to as the appellant, at an annual rent of Rs 2,225. Each of these three instruments expressly provided that the lessee was permitted to erect buildings on the land and that, in order to obtain the necessary sanction for such construction, the lessor was required to make an application to the Collector or to any other competent authority. At the time the three leases were created, the plot was assessed under the Bombay Land Revenue Code of 1879 for agricultural purposes. Section 65 of that Code allowed land that had been assessed as agricultural to be used for non‑agricultural purposes only if the Collector granted a specific permission. Consequently, the appellant applied to the Collector of Ahmedabad for such permission, and the Collector issued an order on 11 November 1949 that authorized the conversion of the land’s user from agricultural to non‑agricultural. Following that conversion, the appellant filed an application on 27 October 1950 before the Court of Small Causes, Ahmedabad, seeking fixation of the standard rent of the plot under section 11 of the Bombay Rents, Hotel and Lodging Houses Rates, Control Act 57 of 1947, hereinafter called the Act. The respondent argued that because the land had originally been granted in lease for agricultural use, the provisions of the Bombay Act were inapplicable and, therefore, the appellant’s application could not be entertained. The Court of Small Causes accepted the respondent’s argument and dismissed the application. That dismissal was upheld on appeal to the District Court at Ahmedabad and again on revision before the High Court of Judicature at Bombay. With special leave, the appellant then appealed to this Court against the High Court’s order. Both parties agreed that until the Collector’s order of 11 November 1949 the plot remained assessed for agricultural purposes under the Bombay Land Revenue Code. Although the land lay fallow in 1947, such a condition did not, by itself, alter the user of the land; a change in user could occur only through a Collector’s order under section 65 of the Code. Section 11 of the Bombay Act 57 of 1947 empowers a competent court, upon a proper application, to fix the standard rent of any premises. However, section 11 belongs to Part XI of the Act, and section 6 clause (1) stipulates that in the areas listed in Schedule I, Part II applies solely to premises let for residence, education, business, trade or storage. There was no dispute that Part II was applicable to the area where the plot was situated. Nevertheless, before the appellant could invoke section 11 to obtain a standard rent, she first needed to demonstrate that the leased plot qualified as “premises” within the meaning of section 5(8) of the Act and that it was let for one of the specified purposes. For the purposes of this appeal, the Court therefore examined those requirements.

In this case, the Court held that it was unnecessary to examine whether the plot had been let for residence, education, business, trade or storage. The term “premises” was defined by section 5 clause (8) of the Act, and the essential portion of that definition read: “In this Act, unless there is anything repugnant to the subject or context … (8) ‘premises’ means – (a) any land not being used for agricultural purposes, (b) any building or part of a building let separately (other than a farm building) including – (i) the garden, grounds, garages and out‑houses if any, appurtenant to such building or part of a building, (ii) any furniture supplied by the landlord for use in such building or part of a building, (iii) any fittings affixed to such building or part of a building for the more beneficial enjoyment thereof.” Reading section 5 sub‑clause (8) together with section 6(1), the Court observed that Part II of the Act could apply in the areas listed in Schedule II to lands that are not being used for agricultural purposes and that are let for residence, education, business, trade or storage. The Court noted that the relevant date for determining whether the plot qualified as “premises” under section 6 was the date on which the plot was let, not the date on which either the tenant or the landlord filed an application for fixation of standard rent. After reviewing the facts, the Court agreed with the High Court that the disputed plot could not be characterised as “premises” within the meaning of the statute and therefore did not fall within the scope of Part II. Consequently, the application filed by the appellant under section 11 for fixation of standard rent was held to be not maintainable. The appeal was dismissed with costs, and the order of dismissal was affirmed.