JUDGMENT
D.G. Karnik, J.
1. The petitioner is the owner of the premises bearing Municipal House No. 3883 bearing City Survey 3856-B situated at Ahmednagar (hereinafter referred to as the said property). The original respondent No. 1 was a tenant in respect of the premises consisting of 2 khans situated on the ground floor of the said property (hereinafter referred to as the suit premises). The original respondent No. 1 died during the pendency of this Writ Petition and his heirs were brought on record. Despite service of the notice, the legal representatives of the respondent No. 1 have not appeared in this Court. Respondent No. 2 is the alleged sub-tenant.
2. The petitioner filed a suit bearing Regular Civil Suit No. 501/1976 against the respondents for possession of the suit premises on several grounds under the provisions of Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short, Bombay Rent Act) in the Court of Civil Judge, Junior Division, Ahmednagar. The Trial Court decreed the suit on 3 grounds viz. (1) default in payment of the rent; (2) unlawful sub-letting; and (3) the reasonable and bona fide requirement of the landlord. The appeal bearing Regular Civil Appeal No. 343/1 982 filed by the respondents was allowed by the IV Additional District Judge, Ahmednagar who reversed the judgment of the Trial Court on all counts and dismissed the petitioner’s suit. Being aggrieved, the petitioner has filed this petition under Article 227 of the Constitution of India.
3. According to the landlord the tenant failed to pay the agreed rent within one month of the date of receipt of the notice of demand, the tenant also did not file an application for standard rent within a period of one month nor did he tender rent which according to him was due. Shri Mantri, learned Counsel for the petitioner relied upon the judgment of this Court in Shankar Govind v. Mahalaxmi 2001(1) Mh. L.J. 131 in which it was held that even if the demand is excessive, it is the duty of the tenant to offer atleast the agreed rent within a period of one month from the date of receipt of the suit notice or atleast raise a dispute regarding standard rent. In the present case, the landlord had initially agreed to let out to the tenant 4 khans of premises on the ground floor of the said property on the monthly rent of Rs. 60/- and had taken Rs. 750/- as an advance which was to be adjusted against the rent. The landlord, however, actually handed over the possession of only 2 khans. The tenant had therefore, filed the suit for specific performance for possession of the remaining 2 khans. The rent of Rs. 60/- p.m. was agreed not for 2 khans but for the 4 khans of the premises. Thus no rent was agreed in respect of the suit premises which consisted of only 2 khans. Therefore, it cannot be said that rent of Rs. 60/- was agreed in respect of the suit premises consisting of 2 khans in the absence of agreed apportionment. As there was no agreement regarding the rent, the tenant cannot be held to be guilty for non-payment of the rent and no decree for eviction can be passed against him under Section 12 of the Bombay Rent Act.
4. It is common ground between the parties that the suit premises were taken on rent for the purpose of running a hotel business. It is alleged by the petitioner that respondent No. 1 was employed as a Door Keeper in a Cinema Theatre and was not personally running the Hotel but had sublet it to respondent No. 2. The petitioner has produced on record the certified copy of the licence under Shops and Establishment Act issued in the joint names of respondent Nos. 1 and 2 on 27th February, 1970. The suit premises were let out in January 1970 and the licence was taken in the joint name of respondent Nos. 1 and 2 in February, 1970 i.e. immediately after the letting. Evidence on record shows that the landlord had given consent for obtaining the licence. It means since beginning the landlord was aware of the fact that petitioner and respondent No. 2 were to jointly run the hotel and gave consent to it. Under Sub-section (2) of Section 15 of the Bombay Rent Act, the prohibition, against the sub-letting is deemed to have had no effect before 1st February, 1973. As the alleged sub-letting in the present case was from February 1970 I.e. prior to 1st February, 1973. the landlord is not entitled to possession on this ground also.
5. The learned Additional District Judge, however, did not apply the correct tests for considering the claim of bona fide requirement of the petitioner. The Trial Court has held that petitioner has six sons and one daughter. The petitioner was not employed, his elder son was running a cycle shop on the road, third son was a hawker selling bakery products; 5th son was jobless and 6th son was studying in the school. The Trial Court held that the petitioner required suit premises for the purpose of business for his sons, especially the elder son who was running a cycle shop on the road and the third son who was hawker hawking on the road selling bakery products. The learned Additional District Judge also held that petitioner was unemployed and his one son was running a cycle shop on the road. The finding that the second son was a hawker hawking on the road selling bakery products was also not set aside. However, the learned District Judge rejected the claim of the petitioner/plaintiff in the following words :
However, he (plaintiff) wants the premises for running bakery or running a cycle shop. In view of the uncertainty the need of the plaintiff cannot be said to be reasonable and bonajide.
The learned Additional District Judge further observed :
However, while the son of the plaintiff has been examined in the Court, he has admitted that for running business of bakery, he will require Rs. 1,000/~ as capital and he has no capital of his own with him. So it will not be proper to hand over the possession of the premises as the reasonable arid bona fide requirement of the plaintiff for running the bakery business. Similarly, he has submitted that the son is habituated in selling the bakery products on road and it cannot, be said that the said business will be flourished in the establishment of the shop in the said premises.
6. These observations by the learned Additional District Judge show complete lack of knowledge of commerce. Even in the year 1986, when the learned District Judge decided the matter, Rs. 1000/- was not a large enough sum which the landlord could not have raised for the purposes of business. Most of the businesses are run partly on the own (i.e. equity) capital and partly with the help of borrowed funds. Debt equity ratio of 2:1 is not uncommon and with that ratio the petitioner/his son needed to have only Rs. 333/-of his own to raise a total capital of Rs. 1000/-. Assuming that the petitioner/his son did not possess a farthing and that entire sum of Rs. 1000/- was to be raised as a loan, the petitioner who is the owner of the premises would have certainly been able to raise by mortgage of the said property, a sum much greater than Rs. 1.000/- which was the capital required for the business.
7. Almost 30 years ago in Fin Peera Saheb v. K. Balachandra Rao and Ors. AIR 1972 Mys. 14 the learned Single Judge of Mysore High Court held that in ordinary circumstances when the owner says that he requires his premises for his own use and occupation, the Court must start with a presumption that the claim of requirement of premises by the landlord for his personal use arid occupation is true and mere statement of the tenant that the ease of the landlord is false is not sufficient. Unfortunately this judgment, was not then followed by many High Courts, The Courts at that time held that the burden of proving the need was always on the landlord and on some occasions, the Court stretched this burden of proving need almost to a compelling need. There has however, been a change in the judicial thinking after the decision of the Apex Court in Mst. Bega Begum and Ors. v. Abdul Ahad Khan (dead) by L.Rs, and Ors. Abdul AIR 1979 SC 272 : 1979 (2) S.C.R. 1 : 1979 (1) SCC 273 : 1979 (1) SCC 273 1979 (1) R.C.J. 344 wherein it was observed in para 13 as follows:
Moreover, Section 11(1)(h) of the Act uses the words “reasonable requirement” which undoubtedly postulate that there must be an element of need as opposed to a mere desire or wish. The distinction between desire and need should doubtless be kept in mind but not so as to make even the genuine need as nothing but a desire as the High Court has done in this case. It seems to us that the connotation of the term “need” or “requirement” should not be artificially extended nor its language so unduly stretched or strained so as to make it impossible or extremely difficult for the landlord to get a decree for eviction. Such a course would defeat the very purpose of the Act which affords the facility of eviction of the tenant to the landlord on certain specified grounds.
8. There have been many judgments one after another since then which have made the task of proving the reasonable and bonafide requirement for the landlord less and less onerous. As regards the claim for possession of the premises by the landlord for starting a new business, in Dattatraya Laxman Kamble v. Abdul Rasul Moulali Kotkune and Anr. Hon’ble Supreme Court observed ;
If a person wants to start new business of his own it may be to his own advantage if he acquires experience in that line. But to say that any venture of a person in the business field without acquiring past experience reflects lack of his hona fides is a fallacious and unpragmatic approach. Many a business have flourished in this country by leaps and bounds which were started by novice in the field; and many other business ventures have gone haywire despite vast experience to the credit of the propounders. The view that a acquisition of sufficient know-how is a pre-condition for even proposing to start any business, if gains approval as a proposition of law, is likely to shatter the initiative of young talents and deter new entrepreneurs from entering any field of business or commercial activity. Experience can be earned even while the business is ‘in progress. It is too pedantic a norm to be formulated that “no experience no venture.
9. The observations of the Additional District Judge that the son is habituated in selling the bakery products on road and it cannot be said that the said business would flourish in the shop premises, is clearly contrary to the aforesaid observations of the Apex Court, The fact that the landlord or his sons have not only a desire of doing a business but is actually doing a business, and is forced to do the business on the road should by itself be construed as a reasonable and bonafide requirement. The fact that the landlord is carrying on a business on the road or in some small premises taken on rent or licence would show the strong desire and the need of the landlord.
10. Some years ago, the Courts considered the provisions of Clause (g) of Sub-section (1) of Section 13 of the Bombay Rent Act independent of Sub-section (2) of Section 13. It was thought that the two sub-sections were independent of each other; it was considered necessary for the landlord first to prove that he reasonably and bonafide required the suit premises within the meaning of Clause (g) of Sub-section (1) of Section 13. It is only if the landlord proved his requirement under Section 13(1)(g) that the Court would look to Sub-section (2) of Section 13 to, consider on whom greater hardship would be caused to the landlord or to the tenant, by passing or by refusing to pass the decree. The question of hardship to the tenant was not considered simultaneously with considering the hardship of the landlord. In this connection, reference may be made to the decision of a learned Single Judge of this Court in Mangharam Chubarmal v. B.C. Patel . In that case, Mr. Singhvi read out to the learned Single Judge the passage from Halsbury’s Laws of England, III Edition, Vol. 23 at page 814, para 1593 which read as follows :
Reasonableness: In determining whether it is reasonable to make an order for possession the Judge is entitled to take into account all the circumstances as they exist at the date of the hearing, in a broad commonsense way as a man of the world. Any facts which amount to hardship on landlord or tenant are relevant and so is the conduct of the parties generally. The question is not whether it is reasonable for the landlord to seek possession but whether it is reasonable for the Court to grant it. The interests of the public are also relevant. The difficulty of establishing reasonableness will usually be less when alternative accommodation is available than when it is not.
This passage on the Halsbury’s Laws of England was not approved by the Single Judge who held that English law (as enunciated in the aforesaid passage) was not useful in interpreting the key words in the Rent Act.
The position has undergone a see change since then. As a lawyer, when I cited this judgement before this Court in Krishnarao Dadasaheb Kamat and Ors. v. Gajananrao M. Jadhav and Ors. Special Civil Application No. 3643/1976, decided on 16.10.1980 (by Pendse, J.) the Court observed as under :
In answer to this submission, Shri Karnik submitted that the question as to whether the tenant has other accommodation available with him should not be taken into accent to determine the bonajlde and reasonable requirement of the landlord. The learned Counsel submitted that the Court should ignore the fact that the tenant is in occupation of other premises and must consider the question of requirement purely and simply on the basis of the need of the landlord. In support of this submission, reliance is placed on the two decisions of the Single Judge of this Court. The first decision is Mangharam Chubarmal v. D.C. Patel and Ors. . The learned Single Judge did not approve the following quotation from Halsbury’s Law of England, III Edn. Vol. 23 as the correct position for determining the claim under Section 13(1)(g) of the Rent Act.
The Court held that the decision in Mangharam Chubarmal v. B.C. Patel (supra) was not a good law in view of the subsequent judgment of the Division Bench and observed :
The decision of the learned Single Judge was based on peculiar facts of that case, and in any event, after the decision of the Division Bench reported in 1978 Mah. L.J. 589 the conclusion could not be stated to be an accurate law.
A Special Leave Petition against this judgment of the High Court was dismissed.
Thus the aforequoted passage from the Halsbury’s Laws of England has now been accepted as correct principle while interpreting Rent Acts applicable in Maharashtra, India.
11. The Courts have thus started attaching more importance to the question of hardship. In my opinion, while considering bonafide requirement of the landlord itself the hardship likely to be caused to the tenant should be considered. When landlord claims possession on the ground of reasonable and boanfide requirement and the Courts comes to the conclusion that there would be no or little hardship to the tenant by passing a decree then ordinarily decree for possession should follow. In Shan/car Bhairoba Vadangekar since deceased through L. Rs. Dattatraya Shan/car Vadandekar and Ors. v. Ganapati Appa Gatare since deceased through L. Rs. Smt. Sashilabai Ganpat Gatare and Ors. 2001(4) Mh. L.J. 131 : 2001(4) All. M.R. 61 a learned Single Judge of this Court observed in para No. 24 as follows :
The principles deduced from the aforesaid decisions would clearly justify the requirement of placing onus on the tenant to establish that the requirement of the landlord is not bonajide.
The learned Judge further observed in para 25 of the judgment as under:
Understood thus, there is no scope for the Courts to doubt the genuineness and reasonableness of the requirement of the landlord and it con be presumed that the requirement of the landlord is bonafide, for the scheme of the Rent Act would permit such an approach. In that sense, it is sufficient for the landlord to assert that the suit premises are reasonably and bona fide required by him and the onus is on the tenant to show that the suit premises are neither reasonably-nor bonafide required by the landlord.
12. If the bona fides of the landlord are to be presumed then the test of hardship assumes prime importance. It would be appropriate for the Court to hold that the need of the landlord is reasonable and bonafide, if no hardship is likely to be caused to the tenant cither because he has acquired other suitable premises or so well placed that he can afford to acquire other suitable premises either for residence or business as the case may be.
13. In the present case, admittedly, the tenant was having other avocation viz. he was a door keeper In the Cinema Theatre. He was not personally doing business taut had induced the name of respondent No. 2 on the Shop Act Licence and it was probably the respondent No. 2 who was actually looking after the business. Respondent No. 2 is not a tenant and her hardship need not be considered. Thus hardship that would be caused to the respondent No. 1 would be minimal. Respondent No. 1 alongwith respondent No. 2 was carrying on hotel business for many years. During this time, he would have earned sufficient money to take on ownership, rent or otherwise acquire other suitable premises for his business which can be located elsewhere. It was not his case that income from the hotel was not sufficient. If at all it was his case that income from the hotel was meagre then loss of such meagre income on account of eviction would not cause him greater hardship as he had other source of income from service as a door keeper in a cinema theatre. Furthermore, the Court is required to lake into consideration the situation as if exists at the time of passing of final decree. Today, respondent No. 1 has died, his heirs have been brought on record but have not appeared to contest, this Petition, probably because they have other source of income or no hardship would be caused to them even if decree is passed. It is only the respondent No. 2 who is contesting the Petition. Respondent No. 2 is admittedly not a tenant and her hardship need not be considered. She had also not adduced any evidence about any possible hardship to her. The learned Additional District Judge ought to have given primacy to the question of hardship. The fact that no hardship would be caused to the tenant by passing decree for possession is certainly a relevant circumstances for considering the bonafides of the landlord. The learned Additional District Judge, thus erred in not applying correct principles of law lo the proved facts of the case. The decision of the learned Additional District Judge therefore, needs to be set aside.
14. Writ Petition is accordingly allowed. The judgment and decree of the Additional District Judge is set aside and order passed by the III Joint Civil Judge, Junior Division. Ahmednagar dated 20th October, 1982 in Regular Civil Suit No. 501/1976 is restored to the extent of decree for possession only, excluding the money decree.