Ramnikal Pitambardas Mehta vs Indradaman Amratlal Sheth
Rewritten Version Notice: This is a rewritten version of the original judgment.
Court: supreme-court
Case Number: Civil Appeal No. 61 of 1964
Decision Date: 28 April 1964
Coram: Raghubar Dayal, A.K. Sarkar, M. Hidayatullah
In the matter titled Ramnikal Pitambardas Mehta versus Indradaman Amratlal Sheth, decided on 28 April 1964, the Supreme Court of India heard the dispute with a bench consisting of Justice Raghubar Dayal, Justice A. K. Sarkar and Justice M. Hidayatullah. The petitioner in the case was Ramnikal Pitambardas Mehta and the respondent was Indradaman Amratlal Sheth. The judgment was delivered on the same date, 28 April 1964, and is reported in the official law reports as 1964 AIR 1676 and 1964 SCR (8) 1, with subsequent citations including RF 1984 SC 1890 (7), R 1985 SC 139 (3), RF 1986 SC 1789 (3) and F 1992 SC 1696 (11). The statutory provision that formed the core of the dispute was section 13(1) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, specifically clauses (g) and (hh), which deal with premises required bona‑fide for occupation after carrying out repairs and the applicability of the sub‑section when such circumstances arise.
The factual backdrop, as set out in the headnote, indicated that the petitioner was occupying the ground‑floor portion of a house owned by the respondent. The respondent instituted suit for ejectment, asserting that he required the entire house, including the portion occupied by the petitioner, for his own residential purposes. The petitioner defended the suit by contending that the respondent did not reasonably and bona‑fide require the premises for his own occupation or for the purpose of carrying out repairs. The trial court, after evaluating the evidence, held that the respondent did indeed require the premises bona‑fide for his occupation and consequently decreed the suit in favour of the respondent. The petitioner appealed this decision, but the appellate court dismissed the appeal. The petitioner further filed a revision petition before the High Court, which was also dismissed. By way of special leave, the petitioner approached the Supreme Court, and the sole question for determination before the Supreme Court was whether the respondent’s claim fell within the ambit of clause (g) or clause (hh) of section 13(1) of the Act.
Upon consideration, the Supreme Court dismissed the petitioner's appeal. The Court observed that the respondent’s case clearly fell under clause (g) because he required the premises for his own occupation. The Court emphasized that the mere intention of the respondent to make alterations to the house, whether driven by personal desire or by an absolute necessity arising from the condition of the building, did not invalidate his bona‑fide and reasonable requirement for occupation, provided that he had established a genuine need to occupy the house. The Court further noted that neither the language of clause (g) nor any other provision of the Act imposed a prohibition requiring the landlord to occupy the house without any alterations. The Court found no logical basis for such a restriction. It explained that the provisions of section 13 are intended to protect the landlord’s interests, and the various grounds for ejectment enumerated in that section are designed to justify the landlord’s lawful right to evict a tenant when such grounds are reasonably satisfied. Consequently, the Court held that no additional restrictions, not expressly mentioned in the statutory grounds, could be read into the provision.
Finally, the Court clarified that clause (hh) could not be applied to a scenario where a landlord reasonably and bona‑fide requires the premises for his own occupation, even if the landlord intends to demolish the existing structure and erect a new building on the site. Clause (hh), the Court indicated, is intended to apply only to situations where the landlord does not require the premises for personal occupation but instead seeks to erect a new building for the purpose of letting it out to tenants. In the present case, because the landlord’s requirement was for personal occupation, clause (g) governed, and the petitioner's challenge was therefore rejected.
The Court explained that clause (hh) of section 13(1) is intended to apply in situations where a landlord seeks possession of the premises for his own occupation, but the real purpose is to demolish the existing structure and erect a new building that will subsequently be let out to tenants. In support of this interpretation the Court referred to several authorities, namely Krishanial Ishwarlal Desai v. Bai Yijkor (1964 1 S.C.R. 553), Krishna Das v. Bidhan Chandra (A.I.R. 1959 Cal. 181), McKenna v. Porter Motors Ltd. ([1956] A.C. 688), Betty’s Cafes Ltd. v. Phillips Furnishing Stores Ltd. ([1959] A.C. 20), Manchharam Ghelabhai Pittalwala v. Surat Electricity Co. Ltd. (Civil Revision Application No. 204/56 dated 1 February 1957, Bombay High Court) and Allarkha Fakirmahomed v. Surat Electricity Co. Ltd. (Civil Revision Application No. 164/57 dated 8 October 1957, Bombay High Court).
The appeal under special leave was listed as Civil Appeal No. 61 of 1964. It arose from the judgment and decree dated 28 October 1963 of the Gujarat High Court in Civil Revision Application No. 697 of 1962. Counsel for the appellant were Purshottam Trikamdas, M. Patel and I. N. Shroff, while counsel for the respondent comprised S. T. Desai, B. J. Shelat, J. B. Dadachanji, O. C. Mathur and Ravinder Narain. The judgment was delivered on 28 April 1964 by Justice Raghu Bar Dayal. The appeal challenged the order of the Bombay High Court and sought to determine the proper construction of clauses (g) and (hh) of sub‑section (1) of section 13 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (Act LVII of 1947), hereinafter referred to as the Act.
The factual backdrop, as summarized by the Court, was that the appellant occupied the ground‑floor of a house owned by the respondent. The respondent instituted suit for the appellant’s ejectment, asserting that he required the entire house, including the appellant’s portion, for his own residential use. In the plaint the respondent described the bungalow as a very old structure, approximately seventy‑five years old, whose various parts were now at risk of collapse. He narrated that a portion of an upper balcony had already collapsed and that, because the building was unsafe, he was compelled to remain out of possession until the whole bungalow could be overhauled. He further stated that only after securing vacant possession of the entire bungalow and completing the necessary additions, alterations and repairs could he occupy it for his personal use.
The appellant contested the suit on several grounds. He argued that the respondent did not reasonably and bona‑fide require the premises for his personal occupation, nor did he reasonably and bona‑fide require the premises for the purpose of carrying out repairs. The trial Court, however, held that the respondent did bona‑fide require the premises for his occupation. It rejected the appellant’s contention that the provisions of section 13(1)(g) should be inapplicable when the landlord did not intend to occupy the premises as his own residence.
In the earlier proceedings, the trial Court found that the landlord intended to occupy the premises after carrying out major repairs and consequently decreed the respondent’s suit for ejectment. The defendant appealed this decision, but the appellate Court dismissed the appeal and affirmed the trial Court’s view. Unwilling to accept that outcome, the defendant then filed a revision petition before the High Court, which was also rejected. The present appeal was filed against that rejection. A preliminary objection was raised, contending that the revision petition was incompetent because no question of jurisdiction was involved. The appellant further argued that, based on the facts found, the trial Court had assumed jurisdiction that it actually lacked, and therefore the revision should have been competent. The Court upheld the preliminary objection and held that the revision was indeed incompetent.
The substantive issue presented to the Court concerned whether an ejectment decree could be granted on the ground of personal requirement under section 13(1)(g) of the Act when it was established that the landlord intended to pull down the premises, erect a new building, and then occupy it. It was submitted that in such circumstances the landlord should rely on clause (hh) of section 13(1) instead. The question therefore focused on the interpretation of these two clauses. Section 28 of the Act confers jurisdiction on the Court designated therein to try any suit or proceeding between a landlord and tenant relating to possession of premises, expressly stating that no other Court, subject to the provisions of sub‑section (2) which do not apply here, may entertain such suits. Consequently, the trial Court possessed full jurisdiction to entertain the ejectment suit and also to interpret whether clause (g) of section 13(1) applied to the present facts. The appellate Court likewise had jurisdiction to hear the appeal. Because the High Court’s jurisdiction to entertain a revision in this matter was absent, it could not interfere with the appellate Court’s decision, even if that decision were erroneous in fact or law. Accordingly, the revision application had to be dismissed by the High Court, and the present appeal must also fail. Having noted that the merits of the case had already been fully argued, the Court turned to the legal point raised. The sole question to be determined was whether the respondent’s case fell within the ambit of section 13(1)(g) of the Act or within the ambit of section 13(1)(hh). The relevant provision reads: “13(1) Notwithstanding anything contained in this Act but subject to the provisions of section 15, a landlord shall be entitled to recover possession of any premises if the Court is satisfied… (g) that the premises are reasonably and bona fide required by the landlord for occupation by himself or by any person for whose benefit the premises are held or where the landlord is a…”
The provision identified as clause (g) allowed a landlord to obtain possession of premises where the landlord was satisfied that the premises were reasonably and bona‑fide required for occupation either by the landlord himself, by a person for whose benefit the premises were held, or by a trustee of a public charitable trust for the purposes of that trust. Clause (hh) dealt with premises not exceeding two floors that were reasonably and bona‑fide required by the landlord for the immediate purpose of demolishing them in order to erect a new building on the site. Under section 13(1) a landlord could therefore institute an ejectment action for several reasons, including the requirement that the premises be needed for his own occupation. The respondent asserted, and the lower courts accepted, that he required the premises bona‑fide for his own occupation. In the plaint the respondent declared that he intended to reside in the premises after carrying out an overhaul. On that basis the appellant argued that the case should be placed under clause (hh), contending that the respondent’s intention to demolish the building and construct a new one fell within the immediate purpose contemplated by that clause. The appellant further maintained that clauses (g) and (hh) were mutually exclusive, so a landlord could not rely on clause (g) where the facts satisfied clause (hh) because of the immediate steps the landlord would take after obtaining possession. The Court noted that it need not express an opinion on that contention, because, as would be explained later, the facts placed the case within clause (g) and not within clause (hh) of section 13(1).
The Court affirmed the findings of the lower courts that the respondent’s claim fell within clause (g) because he bona‑fide required the premises for his own occupation. The Court observed that the respondent’s intention to make alterations—whether driven by personal preference or by necessity arising from the condition of the house—did not disturb his bona‑fide and reasonable requirement of the premises for occupation, since he had demonstrated a genuine need to occupy the house. The Court further stated that neither the language of clause (g) nor any other provision in the Act prohibited a landlord from occupying the house while also undertaking alterations. No logical justification existed for imposing such a restriction. Under ordinary law a landlord could evict a tenant at will after observing the prescribed procedures, except where the landlord had contractually agreed not to do so until a specified event occurred. The Act, however, limited this general right in the special context of scarce accommodation and the potential abuse by landlords demanding unjustifiably high rents. Consequently, the Act furnished tenants with adequate protection against harassment by the threat of ejectment when they were unable to satisfy their rent obligations.
The Court observed that the legislation imposes several restrictions on a landlord’s power to evict a tenant. Section 12(1) of the Act states that a landlord cannot recover possession of any premises as long as the tenant pays the standard rent, is ready and willing to pay any permitted increase, and complies with the other tenancy conditions to the extent that these conditions are consistent with the Act. Section 13, on the other hand, sets out exceptional situations in which a landlord may evict a tenant even though the tenant has been paying rent regularly or is prepared to pay rent. The provisions of Section 13 are intended to benefit the landlord, and the various grounds for eviction listed in that section are those that reasonably justify the landlord’s exercise of his general right to evict. Consequently, the Court found no basis for reading into the statutory grounds any additional restrictions that are not expressly mentioned.
The Court rejected the argument that clause (g) of Section 13(1) should be limited only to cases where the landlord genuinely needs to occupy the premises without making any alteration, that is, to occupy the exact building already occupied by the tenant. The Court held that there is no justification for giving such a narrow meaning to either the word “premises” or the word “occupies,” a construction that had previously been addressed by this Court in Krishanual Ishwarlal Desai v. Rai Vijkor (1). The Act contains safeguards to prevent misuse of clause (g). Section 17 provides that if the landlord does not occupy the premises within one month after recovering possession, or if the premises are not re‑let to anyone other than the original tenant within one year of that date, the Court may, upon an application by the original tenant, order the landlord to place the tenant back in occupation on the original terms and conditions. This provision is intended to ensure that a landlord does not evict a tenant unless the landlord truly requires the premises for personal occupation.
Relying on the citation (1) [1964] 1 S.C.R. 553, the Court expressed the view that once a landlord establishes a bona‑fide requirement for the premises for his own occupation, he is entitled to recover possession under sub‑clause (g) of Section 13(1), regardless of whether he intends to occupy the premises without alteration or after making the necessary changes. The Court further explained that the provisions of clause (hh) cannot be applied to a situation where a landlord reasonably and honestly needs the premises for his own use, even if that need involves demolishing the existing structure and erecting a new building. Clause (hh) is relevant only in cases where the landlord does not need the premises for personal occupation but seeks to use the land for constructing a new building to be let out to other tenants.
In this case the Court examined the provisions of subsection (3A) which impose a mandatory undertaking on a landlord who wishes to obtain a decree for eviction on the ground specified in clause (hh). The undertaking requires the landlord to guarantee that the new building to be erected on the site will contain at least twice the number of residential tenements and at least twice the floor area that existed in the premises that are to be demolished. In addition, the landlord must commence demolition no later than one month after he regains possession of the whole premises and must finish the demolition within three months of that date. The landlord is further bound to complete the erection of the new building within fifteen months from the date he recovers possession. These conditions create a fixed timetable for the new construction and assure that the number of residential units, meaning rooms or groups of rooms offered for rent as a single unit, is at least doubled, as stipulated in section 5(12) of the Act. The Court observed that such undertakings would be unnecessary if the landlord merely intended to evict the tenant in order to occupy the premises himself after making alterations for his own use. Moreover, section 17A protects the tenant by allowing him to re‑occupy the premises if the landlord fails to start demolition within the period prescribed in subsection (3A). Section 17B enables the tenant, after having delivered vacant possession, to inform the landlord within six months of his intention to occupy a tenement in the new building once it is completed, subject to the conditions laid down in that section. Section 17C requires the landlord to notify the tenant of the date on which the new building will be finished, and it confers upon the tenant the right to occupy a tenement on that specified date. Collectively, these provisions demonstrate that clause (hh) applies where the landlord’s purpose is to demolish the existing structure and erect a new building that will be let out to tenants, rather than to occupy the premises himself after alteration.
The Court further noted that similar clauses to (g) and (hh) of subsection (1) of section 13 have been interpreted in the same manner in earlier decisions such as Krishna Das v. Bidhan Chandra, McKenna v. Porter Motors Ltd., and Betty’s Cafés Ltd. v. Phillips Furnishing Stores Ltd. The appellant relied on two judgments of the Bombay High Court, namely Manchharam Ghelabhai Pittalwala v. The Surat Electricity Co. Ltd. and Allarkha Fakir‑Mahomed v. The Surat Electricity Co., asserting that those cases support the view that the present facts fall under clause (hh) of section 13 rather than under clause (g). The Court examined the reasoning in those precedents, which emphasized that clause (g) concerns genuine personal occupation of the premises by the landlord, whereas clause (hh) is triggered when the landlord seeks possession for the purpose of demolition and subsequent construction of a new building intended for tenancy. The Court concluded that the statutory language and the accompanying safeguards in sections 17A, 17B, and 17C reinforce the interpretation that clause (hh) governs situations where demolition and new construction for lease are the landlord’s objective.
The Court considered two earlier decisions of the Bombay High Court, namely Manchharam Ghelabhai Pittalwala v. The Surat Electricity Co. Ltd. (4) and Allarkha Fakir‑mahamed v. The Surat Electricity Co. Ltd. (5). The latter judgment followed the reasoning given in the former. In the earlier case the High Court explained that the term “occupation” appearing in clause (g) of sub‑section (1) of section 13 signifies “possession followed by actual occupation”, whereas clause (hh) requires only “possession for the purpose of demolition”. The Court further observed that “occupation” under clause (g) necessarily includes possession because occupation cannot occur without the ability to possess. By contrast, clause (hh) does not demand actual occupation; the essential requirement is that the land‑lord must possess the property in order to demolish the existing structure and erect a new building. The decisions cited include (1) A.I.R. 1959, Cal. 18i, (3) [1959] A.C. 20; (2) [1956] A.C. 688; (4) Civil Revision Application No. 204/56 decided on 1‑2‑57 by the Bombay High Court; and (5) Civil Revision Application No. 164/57 decided on 8‑10‑57 by the Bombay High Court.
The Court noted that demolition of an existing building and the subsequent construction of a new one are merely intermediate steps meant to render the premises suitable for occupation by the landlord. In Krishanlal Iswarlal Desai’s case the Court, while interpreting section 17(1) of the Act, declared that when possession is obtained through execution it must be followed by an act of occupation that inevitably involves some overt conduct on the part of the possessor. The Court clarified that “occupation” under clause (g) does not exclusively refer to residence; an owner may occupy property by using it in any manner that demonstrates control and intent. Consequently, when a plaintiff obtains possession and commences demolition within the period prescribed by the statute, such conduct constitutes occupation for the purpose of constructing a building fit for his use.
Applying this reasoning to the present dispute, the Court held that the respondent’s situation fell within clause (g) of sub‑section (1) of section 13 of the Act. Accordingly, the appeal was dismissed with costs. The order allowed a period of three months for the tenant to vacate the premises, based on the tenant’s undertaking to evacuate during that time, and the appeal was finally dismissed.