CASE NO.: Appeal (civil) 4732 of 2006 PETITIONER: M/S Hotel Kings & Ors RESPONDENT: Sara Farhan Lukmani & Ors. DATE OF JUDGMENT: 08/11/2006 BENCH: B.P. Singh & Altamas Kabir JUDGMENT:
J U D G M E N T
(Arising out of SLP ) No.7186/2006)
WITH
Civil Appeal No.4733/2006
(Arising out of SLP ) No.7400/2006)
Yashdhir Hotels Pvt. Ltd. ….Appellant
Versus
Sara Farhan Lukmani & Ors. …Respondents
ALTAMAS KABIR,J.
Leave granted in both the special leave petitions.
Respondent Nos. 1 to 4 in both the special leave petitions
are the owners of a plot of land measuring about 2739.50
sq.yds. bearing survey No. 37, situated at Juhu, Greater
Bombay. The said land was leased to one M/s.H. Bloch
Engineering Pvt. Ltd. by a registered deed of lease dated 3rd
November, 1966. By a deed of assignment dated 8th June,
1970, the said lessee transferred and assigned the demised
property to M/s. Yashdhir Hotels Pvt. Ltd., a company
registered under the Companies Act. The original lease was
for 98 years commencing from 1st November, 1966. By virtue
of the deed of assignment dated 8th June, 1970, M/s.Yashdhir
Hotels Pvt. Ltd. became the lessee of the said land for the
unexpired period of the lease and became a tenant under the
respondent Nos. 1 to 4. The lease rent was initially fixed at
Rs.3,215/- per month, but was thereafter increased to
Rs.3,450/- per month. As M/s. Yashdhir Hotels Pvt. Ltd.
defaulted in payment of rent for more than six months, the
respondent Nos. 1 to 4 issued a notice dated 1st February,
1983 to M/s. Yashdhir Hotels Pvt. Ltd.. It appears that on
receipt of the notice, M/s. Yashdhir Hotels Pvt. Ltd. tendered
rent to the lessors for a period of fourteen months but
the same was refused as the same did not constitute the entire
arrears of rent payable by the lessees. It was also the claim
of the lessors that the lessee had unlawfully sublet the
demised property.
Having refused to accept the rent for fourteen months
tendered by the lessee, the lessors filed a suit, being
R.A.E.No.732/2538/1983, claiming possession on the ground
that the lessee had defaulted in payment of the rents.
Apart from the lessee, certain other parties were made
defendants in the suit on the allegation that the suit property
had been sublet by the lessee in their favour. The defendants
filed their written statements and while admitting that
M/s.Yashdhir Hotels Pvt. Ltd. had become the tenant of the
leasehold premises by virtue of the deed of assignment,
denied that the lessee was in arrears of rent as alleged.
According to the defendants, the lease rent, which was initially
fixed at Rs.3,215/- per month and was thereafter enhanced to
Rs.3,450/- per month, was payable after every six months
and not monthly as claimed by the lessors. It was also
contended that although the rent had been tendered by
cheque along with a letter dated 23rd April, 1983, the same
had been wrongly refused by the lessors. It was also
contended that since the period of lease was 98 years which
was still subsisting, and there was no breach of any of the
terms and conditions of the lease, the lessors were not entitled
to get possession of the suit property. It was the specific case
of the defendant Nos. 2 to 5 that under the deed of lease, the
lessee was entitled to let out the structure erected on the
leasehold property or any part thereof.
The learned trial judge, on an assessment of the evidence
adduced by the parties, came to the conclusion that the rent
of the suit property was payable every six months.
Consequently, even if the defendants were in arrears of rent
for more than six months on the date of the notice dated 1st
February, 1983, the lessors were not entitled to possession in
view of the provisions of Section 12 (3) (a) of the Bombay
Rents, Hotel and Lodging House Rates (Control) Act, 1947,
(hereinafter referred to as the “Bombay Rent Act.”) On the
basis of the aforesaid finding, the learned trial court dismissed
the lessors’ suit for possession.
The lessors preferred an appeal against the said order of
the learned trial judge which was numbered as Appeal
No.76/1997. In the appeal, the Appellate Bench of the Small
Causes Court, Bombay, came to a conclusion that the rent for
the demised premises was payable every month and not after
six months as held by the trial court. Holding further that the
notice terminating the defendants’ tenancy was legal and
valid, the appellate court decreed the suit for possession on
the ground mentioned in Section 12 (3) (a) of the Bombay Rent
Act.
Aggrieved by the order of the Appellate Bench of the
Small Causes Court, Bombay, the lessee filed a Writ Petition,
being No.6812/2005. Other defendant Nos. 2 to 5 also filed
a separate Writ Petition, being No. 6813/2005. As both the
writ petitions arose out of the same judgment, they were taken
up together for disposal by the Bombay High Court and were
disposed of by a common judgment dated 8th February, 2006,
which is the subject matter of challenge in both these appeals.
After looking into the various provisions of the lease, the
High Court affirmed the view of the Appellate Bench of the
Small Causes Court that the rent was payable each month
and not after every six months and that the finding in this
regard was unassailable. The High Court was also of the view
that since the lessee had committed breach of the conditions
of the lease deed and had become a defaulter, it was not
entitled to the protection of Section 114 of the Transfer of
Property Act, 1882.
These appeals have been filed by the lessee and the
defendant Nos. 2 to 5. M/s.Yashdhir Hotels Pvt. Ltd. has filed
Civil Appeal arising out of SLP ) No. 7400/2006 and
defendant Nos. 2 to 5 have filed Civil Appeal arising out of SLP
) No.7186/2006.
Since both the appeals arise out of a common judgment
passed by the High Court, with the consent of the parties,
they have been taken up together for hearing and disposal.
Appearing on behalf of the lessee-M/s. Yashdhir Hotels
Pvt.Ltd., Mr.R.F. Nariman, senior advocate, urged that both
the Appellate Bench of the Small Causes Court at Bombay, as
also the High Court, had committed a grave error in holding
that the rents for the demised premises were payable on a
monthly basis and not after every six months. His main
contention was based on the definition of “rent” in Section 105
of the Transfer of Property Act, 1882, which provides as
follows:-
“105. Lease Defined.A lease of
immovable property is a transfer of a
right to enjoy such property, made for a
certain time, express or implied, or in
perpetuity, in consideration of a price
paid or promised, or of money, a share of
crops, service or any other thing of value,
to be rendered periodically or on specified
occasions to the transferor by the
transferee, who accepts the transfer on
such terms.
Lessor, lessee, premium and rent
defined.– The transferor is called the
lessor, the transferee, is called the lessee,
the price is called the premium, and the
money, share, service or other thing to be
so rendered is called the rent.”
It was urged that the aforesaid definition was very wide and
included payment of consideration of various kinds. It was
urged that in clause (a) of paragraph 3 of the terms and
conditions of the lease, it has been categorically indicated
that in addition to the monthly rents, the lessee is required to
pay and discharge all existing and future rates, and
municipal taxes, dues, duties, development, betterment and
other charges of any nature whatsoever for the time being
payable either by the landlord or the tenants in respect of
the lands and premises or any building or structure for the
time being standing thereon or on any part thereof. It was
also indicated that the ground rent would be a net payment to
the lessors without any deduction whatsoever and the lessors
would not in any event be liable to pay any rates, taxes and
assessment and/or outgoings whatsoever at any time during
the continuance of the lease. It was contended that the said
condition clearly indicates that the rates and taxes and other
outgoings in respect of the demised premises and the building
to be erected thereon formed part of the rent payable by the
lessee in respect of the demised premises. According to Mr.
Nariman, the rent stipulated under the lease deed and the
rates and taxes payable in respect of the demised premises
formed the components of the rent payable in respect of the
demised premises.
Mr. Nariman urged that while no amount above the
standard rent could be claimed by the landlord in respect of a
premises let out, the Act made provision for certain
“permitted increases” which has been defined in Section 5 (7)
of the said Act. In this regard, reference was made to
Section 10 of the Act which provided for increase in the rents
above the standard rent on account of increase in rates, cess,
charges, tax, land assessment, ground rent, land or any other
levy on lands and buildings. Section 10 (3) indicates that the
amount of the increase in rent would be recoverable from
each tenant in proportion to the rent payable by them.
Reference was also made to Section 11 (2) of the said Act
which provides that if there is any dispute between the
landlord and the tenant regarding the amount of permitted
increase, the Court may determine such amount. It was
submitted that since the municipal rates and taxes were
payable after every six months and the same formed an
integral component of rent, it must also be held that the rents
for the demised premises were also payable after every six
months.
Mr. Nariman referred to the decision of this Court in the
case of Raju Kakara Shetty vs. Ramesh Prataprao Shirole
And Anr., (1991) 1 SCC 570, wherein the provisions of Section
12 (3) (a) of the Bombay Rent Act in relation to permitted
increases and payment of education cess was under
consideration. In the said decision, the permitted increases
referred to the education cess payable by the tenant in
addition to the standard rent inasmuch as under the
Maharashtra Education (Cess) Act, 1962, payment of
education cess was an annual liability to be paid by the
landlord but with the right to recover the same from his
tenant in addition to the standard rent. In the said decision, it
was held that since education cess was specifically recoverable
as rent, by virtue of Section 13 of the 1962 Act, it was a
part of ‘rent’ within the meaning of the Bombay Rent Act and
when the same is claimed in addition to the contractual or
standard rent, it constitutes a ‘permitted increase’ within the
meaning of Section 5 (7) of the Bombay Rent Act. It was also
held that since the cess was payable on year to year basis and
a part of the rent became payable annually, the rent ceased to
be payable by the month within the meaning of Section 12 (3)
(a) of the Bombay Rent Act.
Mr. Nariman contended that his contention was further
strengthened by the definition of “standard rent” in Section
5 (10) of the Bombay Rent Act which made reference to
Section 11 which included various components such as
“permitted increases” which were related to the increase in
municipal rates and taxes and other outgoings in respect of
the demised premises. Mr. Nariman submitted that the same
was in consonance with the concept of ‘rent’ as understood in
Section 105 of the Transfer of Property Act wherein the same
has been referred to as the “consideration.”
Referring to the terms of the lease deed executed in
favour of the original lessee M/s. H. Bloch Engineering Pvt.
Ltd., Mr, Nariman pointed out that the premises had been
leased with the specific intention that the lessees would be
entitled to erect and construct buildings and structures
thereon for residential purposes and for garages and while
there was a provision in the deed of lease that the lessee
would not be entitled to assign, transfer, mortgage underlet or
otherwise part with it interest in the demised premises or the
building or building erected thereon without the prior consent
in writing of the lessors, the same was subject to the
provisions of clause 6 which, on the other hand, provided that
the lessee would after the buildings and/or structures are
completed, be at liberty to assign the demised premises to co-
operative housing societies and/or limited company or any
person whatsoever. Mr. Nariman urged that since assignment
had been specifically permitted under the aforesaid provision
of the lease deed, the induction of the respondent Nos. 2 to 5
was in accordance with the provisions of the lease deed and
could not be faulted or made a ground for eviction of the
lessee. Though reference was made to the definition of the
expression “tenant” in Section 5 (11) (aa) of the Bombay Rent
Act, the same does not appear to be relevant for deciding the
present civil appeals.
Mr. Soli J. Sorabjee, Sr. advocate, who also appeared for
the appellants, reiterated Mr. Nariman’s submission that
‘permitted increases’ under the Act became part of the rent
and was, therefore, a component of the rent itself. Mr.
Sorabjee, in support of his contention, referred to the decision
of this Court in The Bombay Municipal Corporation vs. The
Life Insurance Corporation of India, Bombay, reported in
(1970) 1 SCC 791, wherein the question arose as to whether
the levy of educational cess should be taken into
consideration in fixing the annual valuation of a building.
While considering the said question, this Court was also called
upon to consider the issue as to whether a permitted increase
under Section 5 (7) of the Bombay Rent Act, would be part of
the rent which the landlord is entitled to receive from the
tenant. On the second issue, this Court inter alia held as
follows:-
“It is quite clear that Section 7 does not
prohibit the recovery of the increase to
which landlord may be entitled under the
provisions of the Act in addition to the
standard rent. The obvious implication
of the definition of “permitted
increases” in Section 5 (7) is that such
an increase becomes a part of the rent.
The language which has been employed
in Sections 9, 10 and 10AA seems to
indicate that the Legislature treated the
permitted increase as a part of the rent
which the landlord would be entitled to
receive from the tenant.”
Appearing for the private respondents who had been
inducted into the premises by the lessee, Mr. M.L. Verma, Sr.
advocate, pointed out that all the forums had failed to take
note of the fact that a certain amount of money had been kept
in deposit with the lessors which ought to have been adjusted
against the arrears of rent but had not been taken note of in
the notice demanding the arrears of rent. Reference was
made to the decision of this Court in Kranti Swaroop Machine
Tools Pvt. Ltd. And Anr. vs. Kanta Bai Asawa (Smt.) And Ors.,
(1994) 2 SCC 289 and it was contended that the notice
demanding arrears of rent was in itself illegal to the
provisions of Section 12 (3) (a) of the Bombay Rent Act,
inasmuch as, there were no arrears of rent for a period of six
months or more, if the said amount was taken into
consideration towards adjustment of the arrears of dues. It
was contended in such circumstances the relief for eviction
ought not to have been granted to the lessors.
A somewhat similar view was expressed in M/s. Sarwan
Kumar Onkar Nath vs. Subhas Kumar Agarwalla, (1987) 4
SCC 546, wherein this Court held that since the rent for two
months had been paid in advance by the tenant to the
landlord on the understanding that the advance amount
would be liable to be adjusted towards arrears of rent
whenever necessary or required, the tenant could not be
evicted on the ground of default in payment of rent of two
months even if the tenant failed to ask the landlord to make
adjustment of the advance amount.
A submission was made that a lawful sub-tenant who
had been inducted under the terms and conditions of the
lease also became the lessee of a portion of a proportionate
area of the land under the structure and decree for eviction
obtained against the lessee would not bind the lawful sub-
tenant. Reference was made to a decision of the Bombay
High Court in Dinkar S. Vaidya vs. Ganpat S. Gore And Ors.,
AIR 1981 Bombay 190, wherein in paragraph 37 it was
explained that the defendants who were tenants or owners in
respect of the structures only must be deemed to be sub-
tenants in respect of the land and since no notice had been
given to them under Section 12 (2) by the plaintiff-landlord,
demanding all the arrears of rent, no decree for eviction could
be passed against them to hand over vacant and peaceful
possession of the land to the plaintiff.
It was urged that, in any event, since the private
respondents had been lawfully inducted into the premises in
respect of the portion of the structure thereon and the lease
was still subsisting, they had acquired a right to remain in
the premises under the lease deed itself and, were not,
therefore, bound by the eviction decree passed against the
lessee.
On behalf of the lessors it was denied that the lessee was
not a monthly tenant and was required to pay rents after
every six months. Mr. Sundaram, Sr. advocate, urged that the
said case was an innovation and had not been argued before
the courts below. Referring to the provisions of the lease deed
wherein it had been made clear that during the term of the
lease, the lessees were required to pay the monthly rent
reserved therein, Mr. Sundaram urged that this new plea was
being introduced on behalf of the respondents in order to
avoid the consequences of Section 12 (3) (a) of the Bombay
Rent Act. It was urged that such a plea had been made only
to be rejected in view of the categorical provisions of the lease
deed itself. It was further urged that on an erroneous
interpretation of the relevant provisions of the lease deed, the
trial court had arrived at the conclusion that the present case
would be governed under Section 12 (3) (b) of the Bombay
Rent Act, 1947, prior to its amendment in 1987 and not under
Section 12 (3) (a) thereof. However, the Appellate Bench of the
Small Causes Court at Bombay had rectified the error and had
correctly held that the case being made out orally on behalf of
the lessee that the rent was payable after an interval of every
six months could not be accepted having regard to the written
document in which it had been stipulated that the rents were
payable on a monthly basis.
The High Court supported the view taken by the
Appellate Bench of the Small Causes Court at Bombay and
granted the defendants time till 31st May, 2006 to vacate the
suit property.
On the question of default, it was pointed out by Mr.
Sundaram that the trial court had come to a finding that the
entire arrears of rents had not been sent by the lessee to the
lessors prior to 7th March, 1983 and since only a part of the
rent in arrears had been offered to the lessors by cheque, the
same had been returned back to the lessee. Despite such
finding, the trial court on an erroneous interpretation that the
lease was governed under Section 12 (3) (b) of the Bombay
Rent Act, dismissed the suit for eviction. The said position
was reversed by the Appellate Bench of the Small Causes
Court which allowed the appeal and set aside the judgment
and order of the trial court and further decreed the suit for
possession as well as for arrears and mesne profits.
It was then argued that the interpretation sought to be
given to the expression “permitted increases” as being part
of the rent payable by the tenant was fallacious, as would be
evident from Section 10 of the Bombay Rent Act. Sub-section
(1) of Section 10 of the said Act reads as follows:-
“10. Increase in rent on account of
payment of rates etc. (1) On and after
the commencement of the Bombay Rents,
Hotel and Lodging House Rates Control
(Amendment) Act, 1986, where a landlord
is required to pay to Government or to
any local authority or statutory authority,
in respect of any premises any fresh rate,
cess, charges, tax, land assessment,
ground rent of land or any other levy on
lands and buildings, or increase in rate,
cess, charges, tax, land assessment,
ground rent of land or any other levy on
lands and buildings, he shall,
notwithstanding anything contained in
any other provisions of this Act but save
as otherwise expressly provided in any
other law for the time being in force, be
entitled to make an increase in the rent
of such premises.
Provided that, the increase in rent shall
not exceed the amount of any such rate,
cess, charges, tax, land assessment,
ground rent of land or any other levy on
lands and buildings, as the case may be.”
Mr. Sundaram submitted that the wording of the above
provision would indicate that on account of increase in the
rates, cess, charges, tax, land assessment, ground rent of land
or any other levy payable by the landlord to the government or
any local authority or statutory authority, he would be
entitled to make an increase in the rent of such premises.
Mr. Sundaram submitted that it had not been indicated that
the increase in rates and taxes would themselves become part
of the rent and the suit had been rightly decreed by the
Appellate Bench of the Small Causes Court at Bombay for
possession, arrears of rent and mesne profits.
Mr. Ranjit Kumar, learned Sr. counsel who appeared for
the lessors in Civil Appeal arising out of SLP ) No.7186/06
assailed the judgment both of the Appellate Bench of the Small
Causes Court and that of the High Court in so far as they
related to the appellants in the said appeal who had been
inducted into the premises by the lessee. Referring to the
Deed of Lease, Mr. Ranjit Kumar submitted that though by
virtue of clause 6 thereof the right to assign the buildings
and structures to be erected on the demised premises had
been given to the lessee, the same could not be read in
isolation of clause 3 (o) which makes it clear that the lessee
would not be entitled to assign, transfer, mortgage, under-let
or otherwise part with its interest in the demised premises or
the building or buildings thereon without the prior consent in
writing of the lessors.
Reference was also made to Section 14 of the Bombay
Rent Act which provides as follows:-
“Certain sub-tenants and licensees to
become tenant on determination of
tenancy.
(1) When the interest of a tenant of any
premises is determined for any reason,
any sub-tenant to whom the premises or
any part thereof have been lawfully sub-
let before the 1st day of February 1973
shall subject to the provisions of this Act,
be deemed to become the tenant of the
landlord on the same terms and
conditions as he would have held from
the tenant, if the tenancy had continued.
(2) Where the interest of a licensor, who
is a tenant of any premises is determined
for any reason, the licensee, who by
section 15A is deemed to be a tenant
shall, subject to the provisions of this
Act, be deemed to become the tenant of
the landlord on the terms and conditions
of the agreement consistent with the
provisions of this Act.”
Mr. Ranjit Kumar urged that there is no pleading to
indicate whether the appellants had been inducted into the
premises prior to 1st February, 1973, to entitle them to the
benefit of the aforesaid provision. On the other hand, Section
15 of the said Act disentitled a tenant from sub-letting or
assigning his interest in the tenanted premises.
Mr. Ranjit Kumar urged that in such circumstances
both the Appellate Bench of the Small Causes Court as well
as the High Court were correct in directing the appellants in
Civil Appeal arising out of SLP ) 7186/06 to vacate the
premises along with the lessee.
Responding to the submissions made by Mr. Sundaram
and Mr. Ranjit Kumar, Mr. Nariman reiterated his earlier
submissions and referred to a decision of this Court in
Karnani Properties Ltd. vs. Augustin, (1957) SCR 20 which
was followed in the case of Puspa Sen Gupta vs. Susma
Ghose, (1990) 2 SCC 651 holding that where certain special
amenities were to be provided by the landlord, the same could
be taken into consideration for fixation of the standard rent.
In other words, the same would form part of the consideration
contemplated in Section 105 of the Transfer of Property Act to
be a component of the expression “rent”.
The fate of the Civil Appeal arising out of SLP )
7400/06 hinges on the question as to whether despite the
specific provisions of the lease deed for payment of the lease
rents on a monthly basis in advance on or before the 5th day
of each and every English calendar month, whether the trial
judge was right in holding that in effect having regard to the
provisions relating to payment of rates and taxes and other
outgoings by the lessee, the lease would be governed under
Section 12 (3) (b) and not 12 (3) (a) of the Bombay Rent Act.
The fate of Civil Appeal arising out of SLP (c) 7186/06
will depend on the question as to whether the appellants
therein had been lawfully inducted into the demised premises
and, if so, whether they would be bound by the decree for
possession passed against the appellant in Civil Appeal
arising out of SLP (c) 7400/06.
Having given our anxious consideration to the
submissions urged on behalf of the respective parties and the
provisions of the Bombay Rent Act and the various decisions
cited, we are of the view that the decision of the Appellate
Bench of the Small Causes Court at Bombay as affirmed by
the High Court holding that the lease was governed under
Section 12 (3) (a) of the Bombay Rent Act was correct. The
lease deed makes it abundantly clear that the lease rent was
required to be paid on a monthly basis. In fact, in paragraph
1 of the terms and conditions of the lease deed it has, inter
alia, been indicated as follows:-
“………TO HOLD THE DEMISED
PREMISES unto the Lessee for the term
of 98 years commencing from the 1st day
of November, 1966 but renewable and
determinable as hereinafter provided
yielding and paying therefore for the
period ending on the 31st day of October,
1968 a token rent of Rupees one per
month and from the 1st day of
November, 1968 yielding and paying
during the remainder of the said term of
98 years the monthly rent of Rs.3,215/-
(Rupees three thousand two hundred and
fifteen) payable in advance regularly or
before the 5th day of each and every
English Calendar month the first of such
monthly payments to be made on or
before the 5th day of November, 1968 and
subsequent payments to be made on the
corresponding day of each succeeding
month during the remainder of the term
hereby granted……………”
The said position has been further reiterated in
paragraph 3 (a) of the said deed of lease.
The argument advanced on behalf of the lessee that
notwithstanding the said stipulation, since the lessee was
required to pay the rates and taxes which formed part of the
permitted increase and was, therefore, a part of the rent
payable, does not appeal to us. The consequential submission
made in this regard that since the rates and taxes were
payable either annually or after every six months, and the
same formed part of the rent, it must be held that the rents
were payable not each month but after every six months, does
not also appeal to us.
Notwithstanding the decisions in the Bombay Municipal
Corporation case and Raju Kakara Shetty (supra), the views
expressed therein are distinguishable on facts with the facts of
these two appeals. Both the said judgments deal with
payment of education cess under the Maharashtra Educataion
(Cess) Act, 1962, under which the landlord is liable to pay
such cess annually but has the right to recover the amount
so paid by him from the tenant in addition to the standard
rent as a part of the rent itself. By operation of law education
cess has been made a component of the rent payable by the
tenant in respect of the tenanted premises. In such a case,
the concept of ‘permitted increase’ would include the cess
payable as part of the rent itself. In the instant case,
however, the lessee is required to pay the rates and taxes and
other outgoings for the demised premises in respect whereof
the landlord has been given the right to effect permitted
increase equivalent to the amount paid towards rates and
taxes. The same does not, in our view, makes such payment a
part of the rent though it may be a consideration for the grant
of lease. The ‘permitted increase’ in the instant case serves as
a yardstick for the landlord to increase the rents on account of
payment of rates and taxes by the landlord.
Consequently, even though the lease deed contained a
provision for payment of the rates and taxes exclusively by the
lessee and it is also stipulated that the lessor will have no
liability therefor, the lease will still be governed under
Section 12 (3) (a) of the Bombay Rent Act as held by the
Appellate Bench of the Small Causes Court at Bombay and
affirmed by the High Court. The expression “consideration”
indicated in Section 105 of the Transfer of Property Act has
been used in a generic sense to include the price paid or
promised or of money, a share of crops, service or any other
thing of value. On the other hand, the lease deed specifies the
amount to be paid as rent each month while the rates and
taxes and other outgoings are treated to be the
separate liability of the lessee, no doubt having regard to the
intention of the parties that a building was to be erected by
the lessee on the demised land.
Once we have arrived at the aforesaid conclusion, the
other submissions made on behalf of the appellant in Civil
Appeal arising out of SLP ) No.7400/06 become irrelevant.
However, having regard to the provisions of the lease
deed, there can be little doubt that the decree for possession
passed against the lessee will not bind the appellants in the
Civil Appeal arising out of S.L.P. (C ) No. 7186 of 2006 who
have acquired an independent status under the provisions of
the deed of lease permitting assignment of the structure to be
erected on the demised land. In their case, the question of
induction prior to 1st February, 1973, would have no
application. Although, it has been submitted by Mr. Ranjit
Kumar that the provisions of clause 6 of the lease deed must
be read with clause 3(o) thereof, the intention of the parties on
the reading of the lease deed as a whole appears to be that the
lessee would be entitled to make construction on the demised
premises which could be assigned by it to third parties who
would acquire an independent right therein subject to the
terms and conditions of the head lease. Since the appellants
in the Civil Appeal arising out of S.L.P. (C ) No. 7186 of 2006
were lawfully inducted into the premises by virtue of clause 6
of the lease deed they will not be affected by the decree for
possession passed against the lessee.
Civil Appeal arising out of SLP ) No.7400/06 is,
therefore, dismissed, while Civil Appeal arising out of SLP )
No. 7186/06 is allowed. The judgment and decree of the
Appellate Bench of the Small Causes Court as well as High
Court is affirmed as far as Civil Appeal arising out of SLP )
7400/06 is concerned, and is set aside as far as it relates to
the appellants in Civil Appeal arising out of SLP ) 7186/06.
In the facts of the case, the parties will bear their
respective costs.