{"id":140350,"date":"2006-11-08T00:00:00","date_gmt":"2006-11-07T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-hotel-kings-ors-vs-sara-farhan-lukmani-ors-on-8-november-2006"},"modified":"2018-10-16T01:21:15","modified_gmt":"2018-10-15T19:51:15","slug":"ms-hotel-kings-ors-vs-sara-farhan-lukmani-ors-on-8-november-2006","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-hotel-kings-ors-vs-sara-farhan-lukmani-ors-on-8-november-2006","title":{"rendered":"M\/S Hotel Kings & Ors vs Sara Farhan Lukmani & Ors on 8 November, 2006"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S Hotel Kings & Ors vs Sara Farhan Lukmani & Ors on 8 November, 2006<\/div>\n
Author: A Kabir<\/div>\n
Bench: B.P. Singh, Altamas Kabir<\/div>\n
           CASE NO.:\nAppeal (civil)  4732 of 2006\n\nPETITIONER:\nM\/S Hotel Kings & Ors\n\nRESPONDENT:\nSara Farhan Lukmani & Ors.\n\nDATE OF JUDGMENT: 08\/11\/2006\n\nBENCH:\nB.P. Singh & Altamas Kabir\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T<\/p>\n
(Arising out of  SLP ) No.7186\/2006)
\nWITH
\nCivil Appeal No.4733\/2006
\n(Arising out of  SLP ) No.7400\/2006)
\nYashdhir Hotels Pvt. Ltd.             ….Appellant
\nVersus
\nSara Farhan Lukmani & Ors.            …Respondents<\/p>\n
ALTAMAS KABIR,J.\n<\/p>\n
\tLeave granted in both the special leave petitions.
\n\tRespondent Nos. 1 to 4 in both the special leave petitions
\nare the owners of a plot of land measuring about 2739.50
\nsq.yds. bearing survey No. 37, situated at Juhu, Greater
\nBombay.  The said land was leased to one M\/s.H. Bloch
\nEngineering Pvt. Ltd. by a registered deed of lease dated 3rd
\nNovember, 1966.  By a deed of assignment dated 8th June,
\n1970, the said lessee transferred and assigned the demised
\nproperty to M\/s. Yashdhir Hotels Pvt. Ltd., a company
\nregistered under the Companies Act.  The original lease was
\nfor 98 years commencing from 1st November, 1966.  By virtue
\nof the deed of assignment dated 8th June, 1970, M\/s.Yashdhir
\nHotels Pvt. Ltd. became  the lessee of the said land for the
\nunexpired period of the lease and became a tenant under the
\nrespondent Nos. 1 to 4.  The lease rent was initially fixed at
\nRs.3,215\/- per month, but was thereafter increased  to
\nRs.3,450\/- per month.  As M\/s. Yashdhir Hotels Pvt. Ltd.
\ndefaulted in payment of rent for more than  six months, the
\nrespondent Nos. 1 to 4 issued a notice dated 1st February,
\n1983 to M\/s. Yashdhir Hotels Pvt. Ltd..  It appears that on
\nreceipt of the notice, M\/s. Yashdhir Hotels Pvt. Ltd. tendered
\nrent to the  lessors     for  a  period of  fourteen months  but
\nthe same was refused as the same did not constitute the entire
\narrears of rent payable by the  lessees.  It was  also  the claim
\nof the lessors that the lessee had unlawfully sublet the
\ndemised property.\n<\/p>\n
\tHaving refused to accept the rent for fourteen months
\ntendered by the lessee, the lessors filed a suit, being
\nR.A.E.No.732\/2538\/1983, claiming  possession on the ground
\nthat the lessee had defaulted in payment of the rents.
\n\tApart from the lessee, certain other parties were made
\ndefendants in the suit on the allegation that the suit property
\nhad been sublet by the lessee in their favour.  The defendants
\nfiled  their  written statements and while admitting that
\nM\/s.Yashdhir Hotels Pvt. Ltd. had become the  tenant of the
\nleasehold premises  by virtue of the deed of assignment,
\ndenied that the lessee was in arrears of  rent as alleged.
\nAccording to the defendants, the lease rent, which was initially
\nfixed at Rs.3,215\/- per month and was thereafter enhanced to
\nRs.3,450\/- per month,  was payable after  every six months
\nand not monthly as claimed by the lessors.  It was also
\ncontended that although the rent  had been tendered by
\ncheque along with a letter dated 23rd April, 1983, the same
\nhad been wrongly refused by the lessors.  It was also
\ncontended that since the  period of lease was 98 years  which
\nwas still subsisting, and  there was no breach of  any of the
\nterms and conditions of the lease, the lessors were not entitled
\nto  get possession of the suit property.  It was the specific case
\nof the defendant Nos. 2 to 5 that under the deed of lease, the
\nlessee was entitled to let out the structure erected on the
\nleasehold property or any part thereof.\n<\/p>\n
\tThe learned trial judge, on an assessment of the evidence
\nadduced by the parties, came to the conclusion that the rent
\nof the suit property was payable every six months.
\nConsequently,  even if the defendants were in arrears of rent
\nfor more than  six months on the date of the notice dated 1st
\nFebruary, 1983, the lessors were not entitled to possession in
\nview of the provisions of  Section 12 (3) (a) of  the Bombay
\nRents, Hotel and Lodging House Rates (Control) Act, 1947,
\n(hereinafter referred to as the “Bombay Rent Act.”)  On the
\nbasis of the aforesaid finding, the learned trial court dismissed
\nthe lessors’ suit for possession.\n<\/p>\n
\tThe lessors  preferred an appeal against the said order of
\nthe learned trial judge which was numbered as Appeal
\nNo.76\/1997.  In the appeal, the Appellate Bench of the Small
\nCauses Court, Bombay, came to a conclusion that the rent for
\nthe demised premises was payable every month and not after
\nsix months as held by the trial court.  Holding further that the
\nnotice terminating the defendants’ tenancy was legal and
\nvalid, the appellate court decreed the suit for possession on
\nthe ground mentioned in Section 12 (3) (a) of the Bombay Rent
\nAct.\n<\/p>\n
\tAggrieved by the order of the Appellate Bench of the
\nSmall Causes Court, Bombay, the lessee filed a Writ Petition,
\nbeing No.6812\/2005.   Other defendant Nos. 2 to 5  also filed
\na separate Writ Petition, being No. 6813\/2005. As both the
\nwrit petitions arose out of the same judgment, they were taken
\nup together  for disposal by the Bombay High Court and were
\ndisposed of by a common judgment dated  8th February, 2006,
\nwhich is the subject matter of challenge in both these appeals.\n<\/p>\n
\tAfter looking into the various provisions of the lease, the
\nHigh Court  affirmed  the view of  the Appellate Bench of the
\nSmall Causes Court that the rent  was payable each month
\nand not after every six months and that the finding in this
\nregard was unassailable.  The High Court was also of the view
\nthat since the lessee had  committed  breach of the conditions
\nof the lease deed and had become  a defaulter, it was not
\nentitled to the protection of Section 114 of the Transfer of
\nProperty Act, 1882.\n<\/p>\n
\tThese appeals  have been filed by the lessee and the
\ndefendant Nos. 2 to 5.  M\/s.Yashdhir Hotels Pvt. Ltd. has filed
\nCivil Appeal arising out of SLP ) No. 7400\/2006 and
\ndefendant Nos. 2 to 5 have filed Civil Appeal arising out of SLP
\n) No.7186\/2006.\n<\/p>\n
\tSince both the appeals  arise out of a common judgment
\npassed by the High Court, with the consent  of the parties,
\nthey have been taken up together for hearing and disposal.
\n\tAppearing on behalf of the lessee-M\/s. Yashdhir Hotels
\nPvt.Ltd., Mr.R.F. Nariman, senior advocate, urged that both
\nthe Appellate Bench of the Small Causes Court at Bombay, as
\nalso  the High Court, had committed a grave error in holding
\nthat the rents for the demised premises  were payable on a
\nmonthly basis and not after every six months.  His main
\ncontention was based on the definition of “rent” in Section 105
\nof the Transfer of Property Act, 1882, which provides as
\nfollows:-\n<\/p>\n
“105. Lease Defined.A lease of
\nimmovable property is a transfer of a
\nright to enjoy  such property, made for a
\ncertain time, express or implied, or in
\nperpetuity, in consideration of a price
\npaid or promised, or of money, a share of
\ncrops, service or any other thing of value,
\nto be rendered periodically or on specified
\noccasions to the transferor by the
\ntransferee, who accepts the transfer on
\nsuch terms.\n<\/p>\n
Lessor, lessee, premium and rent
\ndefined.–  The transferor is  called the
\nlessor, the transferee, is called the lessee,
\nthe price is called the premium, and the
\nmoney, share, service or other thing to be
\nso rendered is called the rent.”\n<\/p>\n
It was urged that the aforesaid definition was very wide and
\nincluded payment of consideration of various kinds.  It was
\nurged that in clause (a) of paragraph 3 of the terms  and
\nconditions  of the lease, it has been  categorically indicated
\nthat in addition to the  monthly  rents, the lessee is required to
\npay and discharge  all existing and future rates,  and
\nmunicipal taxes, dues, duties, development, betterment and
\nother charges of any  nature whatsoever for the time being
\npayable  either  by the landlord or  the tenants in respect of
\nthe lands and premises or any building or structure for the
\ntime being standing thereon or on any part thereof.   It was
\nalso indicated that the ground rent would be a net payment to
\nthe lessors without any deduction whatsoever and the lessors
\nwould not in any event be liable to pay any rates, taxes and
\nassessment and\/or outgoings whatsoever at any time during
\nthe continuance of the lease.  It was contended that the said
\ncondition clearly indicates that the rates and taxes and other
\noutgoings in respect of the demised premises and the building
\nto be erected thereon formed  part of the rent payable by the
\nlessee in respect of the demised premises.  According to Mr.
\nNariman, the rent stipulated under the lease deed and the
\nrates and taxes payable  in respect of the demised premises
\nformed the components of the rent payable in respect of the
\ndemised premises.\n<\/p>\n
Mr. Nariman urged that while no amount above the
\nstandard rent could  be claimed by the landlord in respect of a
\npremises let out, the Act  made provision for certain
\n“permitted increases” which has been defined in Section 5 (7)
\nof the said Act.   In this  regard, reference  was made to
\nSection 10 of the Act which provided for increase in the rents
\nabove the standard rent on account of increase in rates, cess,
\ncharges, tax, land assessment, ground rent, land or any other
\nlevy on lands and buildings.   Section 10 (3) indicates that  the
\namount  of the increase in rent would be recoverable from
\neach tenant in proportion to the rent payable by them.
\nReference was also made to Section 11 (2) of the said Act
\nwhich provides  that if there is any dispute between  the
\nlandlord  and the tenant regarding the amount  of permitted
\nincrease, the Court may determine such amount.  It was
\nsubmitted that  since the municipal  rates and taxes were
\npayable after every six months and the same formed an
\nintegral component of rent, it must also be held that the rents
\nfor the demised premises were also payable after every six
\nmonths.\n<\/p>\n
 Mr. Nariman referred to the decision of this Court in the
\ncase of  Raju Kakara Shetty vs.  Ramesh Prataprao Shirole
\nAnd Anr.,<\/a> (1991) 1 SCC 570, wherein the provisions  of Section
\n12 (3)  (a) of the Bombay Rent Act in relation to permitted
\nincreases and payment of education cess was under
\nconsideration.   In the said decision, the permitted increases
\nreferred to the education cess payable  by the tenant in
\naddition to the standard rent inasmuch as   under the
\nMaharashtra Education (Cess) Act, 1962, payment of
\neducation cess was an annual liability to be paid by the
\nlandlord but  with the  right to recover the same from his
\ntenant in addition to the standard rent.  In the said decision, it
\nwas held that since education cess was specifically recoverable
\nas rent, by virtue  of Section 13 of the 1962 Act, it was  a
\npart of ‘rent’ within  the meaning of the Bombay Rent Act and
\nwhen the  same is claimed  in addition to the   contractual  or
\nstandard rent, it constitutes a ‘permitted increase’ within the
\nmeaning of Section 5 (7) of the Bombay Rent Act.  It was also
\nheld that since the cess was payable on year to year basis  and
\na part of the rent became payable annually, the rent  ceased to
\nbe payable by the month within the meaning of Section 12 (3)\n<\/p>\n
(a) of the Bombay Rent Act.\n<\/p>\n
Mr. Nariman contended that  his contention  was further
\nstrengthened  by the definition of  “standard rent” in Section
\n5 (10) of the Bombay Rent  Act which made reference to
\nSection 11 which  included  various components such as
\n“permitted increases”    which were related to the increase in
\nmunicipal rates and taxes  and other outgoings in respect of
\nthe demised premises.  Mr. Nariman submitted that the same
\nwas in consonance with the concept of ‘rent’ as understood in
\nSection 105 of the Transfer of Property Act wherein the same
\nhas been referred to as the “consideration.”
\nReferring to the terms of the lease deed  executed in
\nfavour of the original   lessee M\/s. H. Bloch Engineering Pvt.
\nLtd., Mr, Nariman pointed out that the premises had been
\nleased with the specific intention  that the lessees would be
\nentitled  to erect and construct buildings and structures
\nthereon for residential purposes and for garages and while
\nthere was a  provision  in the deed of lease that the lessee
\nwould not be entitled to assign, transfer, mortgage underlet or
\notherwise part with it interest in the demised premises or the
\nbuilding or building erected thereon without the prior  consent
\nin writing  of the lessors, the same  was subject to  the
\nprovisions of clause 6  which, on the other hand, provided that
\nthe lessee  would after the buildings and\/or structures are
\ncompleted, be at liberty to assign the demised premises to co-
\noperative housing societies and\/or  limited company or any
\nperson whatsoever.  Mr. Nariman urged that since assignment
\nhad been specifically permitted  under the aforesaid provision
\nof the lease deed, the induction of the respondent Nos. 2 to 5
\nwas in accordance with the provisions of the lease deed and
\ncould not be faulted or made a  ground for eviction of the
\nlessee.  Though reference was made to the definition of the
\nexpression “tenant” in Section 5 (11) (aa) of the  Bombay Rent
\nAct, the same does not appear to be relevant for deciding the
\npresent civil appeals.\n<\/p>\n
Mr. Soli J. Sorabjee, Sr. advocate, who also appeared  for
\nthe appellants, reiterated  Mr. Nariman’s submission that
\n‘permitted increases’ under the Act became part of the rent
\nand  was, therefore, a component of  the rent  itself.  Mr.
\nSorabjee, in support of his contention, referred to the decision
\nof this Court in  The Bombay Municipal Corporation vs. The
\nLife Insurance Corporation of India, Bombay,<\/a> reported in
\n(1970) 1 SCC 791, wherein the question arose as to whether
\nthe levy of educational cess should be taken  into
\nconsideration in fixing the annual valuation of  a building.
\nWhile considering the said question, this Court was also called
\nupon to consider the issue as to whether a permitted increase
\nunder Section 5 (7) of the Bombay Rent Act,  would be  part of
\nthe rent which the landlord is entitled to receive from the
\ntenant.  On the second issue, this Court  inter alia held as
\nfollows:-\n<\/p>\n
“It is quite clear that Section 7 does not
\nprohibit the recovery of the increase to
\nwhich landlord may be entitled under the
\nprovisions of the Act in addition to the
\nstandard rent.  The obvious  implication
\nof  the definition  of “permitted
\nincreases”  in Section 5 (7) is that such
\nan increase  becomes a part of the rent.\n<\/p>\n
The language which has been employed
\nin Sections 9, 10 and 10AA seems to
\nindicate that the  Legislature treated the
\npermitted increase as a part of the rent
\nwhich the landlord would be entitled to
\nreceive from the tenant.”\n<\/p>\n
Appearing for the private respondents who had been
\ninducted into the premises  by the lessee, Mr. M.L. Verma, Sr.
\nadvocate, pointed out that all the forums  had failed to take
\nnote of the fact that a certain amount  of money had been kept
\nin deposit with the lessors which ought to have been adjusted
\nagainst the arrears of rent but had not been taken  note of in
\nthe  notice demanding the arrears of rent.   Reference was
\nmade to the decision of this Court in  Kranti Swaroop Machine
\nTools Pvt. Ltd. And Anr. vs.  Kanta Bai Asawa (Smt.) And Ors.,<\/a>
\n(1994) 2 SCC 289  and it was contended  that the notice
\ndemanding arrears of rent was in itself   illegal  to the
\nprovisions of  Section 12 (3) (a) of the Bombay Rent Act,
\ninasmuch as, there were no arrears  of rent for a period of  six
\nmonths or more, if  the said amount was taken into
\nconsideration towards adjustment of the arrears of dues.  It
\nwas contended  in such circumstances the relief for eviction
\nought not to have been granted to the lessors.
\nA somewhat similar view was expressed in M\/s. Sarwan
\nKumar  Onkar Nath vs.  Subhas Kumar Agarwalla,<\/a>  (1987) 4
\nSCC 546, wherein this Court held that since the rent for two
\nmonths had been paid in advance by the tenant to the
\nlandlord on the understanding that the advance amount
\nwould be liable to be  adjusted  towards arrears of rent
\nwhenever necessary or required, the tenant could not be
\nevicted on the ground of default in payment of rent of two
\nmonths even if the tenant failed to  ask the landlord to make
\nadjustment of the advance amount.\n<\/p>\n
A submission was made that a lawful sub-tenant who
\nhad    been inducted under the terms  and conditions  of the
\nlease also became  the lessee of a portion of  a proportionate
\narea of  the land under the structure and decree for eviction
\nobtained against the lessee would not bind the lawful sub-
\ntenant.  Reference was  made to a decision of the Bombay
\nHigh Court  in Dinkar S. Vaidya vs. Ganpat S.  Gore And Ors.,
\nAIR 1981 Bombay 190, wherein in paragraph 37 it was
\nexplained that the defendants who were tenants or  owners in
\nrespect of the  structures only must be deemed to be sub-
\ntenants in respect of the land and since no notice had been
\ngiven to them under Section 12 (2)  by the plaintiff-landlord,
\ndemanding  all the arrears of rent, no decree for eviction could
\nbe passed  against them  to hand over vacant and peaceful
\npossession of the  land to the plaintiff.\n<\/p>\n
It was urged that, in any event, since the private
\nrespondents had been lawfully inducted into the premises in
\nrespect of the portion of the structure thereon and the lease
\nwas still subsisting, they had acquired  a right to remain in
\nthe premises under the lease deed itself  and, were not,
\ntherefore, bound by the eviction decree passed against the
\nlessee.\n<\/p>\n
On behalf of the lessors it was denied that the lessee was
\nnot a  monthly tenant and was required to pay rents after
\nevery six months.  Mr. Sundaram, Sr. advocate, urged that the
\nsaid case was  an innovation and had not been argued before
\nthe courts below.  Referring to the provisions of the lease deed
\nwherein it had been made clear that during the term of the
\nlease, the  lessees were required to pay the monthly rent
\nreserved  therein, Mr. Sundaram urged that this new plea was
\nbeing introduced on behalf of the respondents in order to
\navoid  the consequences of Section 12 (3) (a) of the Bombay
\nRent Act.  It was urged that such a plea had been made only
\nto be rejected in view of the categorical provisions of  the lease
\ndeed itself. It was further urged that on an erroneous
\ninterpretation of the relevant provisions of the lease deed, the
\ntrial court had arrived at the conclusion that the present case
\nwould be governed under Section 12 (3) (b) of the Bombay
\nRent Act, 1947, prior to its amendment in 1987 and not under
\nSection 12 (3) (a) thereof.  However, the Appellate Bench of the
\nSmall Causes Court at Bombay had rectified the error and had
\ncorrectly held that the case being made out orally on behalf of
\nthe lessee that the rent was payable  after an  interval of every
\nsix months could not be accepted having regard to the written
\ndocument in which it had been stipulated that the rents were
\npayable on a monthly basis.\n<\/p>\n
The High Court supported the view taken by the
\nAppellate Bench of the Small Causes Court at Bombay and
\ngranted the defendants time till  31st May, 2006 to vacate the
\nsuit property.\n<\/p>\n
On the question of default, it was pointed out by Mr.
\nSundaram that the trial court had come to a finding that the
\nentire arrears of rents had not been sent by the lessee to the
\nlessors prior to  7th March, 1983 and since only a part of the
\nrent in arrears had been offered to the lessors by  cheque, the
\nsame had been returned  back to the lessee.  Despite such
\nfinding, the trial court on an erroneous interpretation that the
\nlease was governed under Section 12 (3) (b) of the Bombay
\nRent Act, dismissed the suit for eviction.  The said position
\nwas  reversed by the Appellate Bench of the Small Causes
\nCourt which allowed the appeal and set aside the judgment
\nand order of the trial court and further decreed the suit for
\npossession as well as for arrears and mesne profits.
\nIt was then argued that  the  interpretation sought to be
\ngiven to the expression “permitted increases”  as being part
\nof the rent payable by the tenant was fallacious,  as would be
\nevident from Section 10 of  the Bombay Rent Act.  Sub-section
\n(1)  of Section 10 of the said Act reads as follows:-
\n“10. Increase in rent on account of
\npayment of rates etc. (1)  On and after
\nthe commencement of the Bombay Rents,
\nHotel and Lodging House Rates Control
\n(Amendment) Act, 1986, where a landlord
\nis required to pay to Government or to
\nany local authority or statutory authority,
\nin respect of any premises any fresh rate,
\ncess, charges, tax, land assessment,
\nground rent of land or any other levy on
\nlands and buildings, or increase in rate,
\ncess, charges, tax, land assessment,
\nground  rent of land or any other levy on
\nlands and buildings, he shall,
\nnotwithstanding anything contained in
\nany other provisions of this Act but save
\nas otherwise expressly provided in any
\nother law for the time being in force, be
\nentitled to make  an increase in the rent
\nof such premises.\n<\/p>\n
Provided that, the increase in rent shall
\nnot exceed the amount of any such rate,
\ncess, charges, tax, land assessment,
\nground rent of land or any other levy on
\nlands and buildings, as the case may be.”\n<\/p>\n
Mr. Sundaram  submitted that  the wording of the above
\nprovision would indicate that  on account of  increase in  the
\nrates, cess, charges, tax, land assessment, ground rent of land
\nor any other levy payable by the landlord to the government or
\nany local authority or statutory authority,  he would be
\nentitled  to make an increase in the rent of such premises.
\nMr. Sundaram submitted that it had not been indicated that
\nthe increase in rates and taxes would themselves become part
\nof the rent and the suit had been rightly decreed by the
\nAppellate Bench of the Small Causes Court at Bombay for
\npossession, arrears of rent and mesne profits.
\nMr. Ranjit Kumar, learned Sr. counsel who appeared for
\nthe lessors in Civil Appeal arising out of SLP ) No.7186\/06
\nassailed the judgment both of the Appellate Bench of the Small
\nCauses Court and that of the High Court in so far as they
\nrelated to the  appellants  in the said appeal who had been
\ninducted into the premises by the lessee.  Referring to the
\nDeed of Lease, Mr. Ranjit Kumar submitted that though by
\nvirtue of  clause 6 thereof  the   right to assign  the buildings
\nand structures  to be erected on the demised premises had
\nbeen given  to the lessee, the same could not be  read in
\nisolation  of clause 3 (o) which makes it clear  that the lessee
\nwould not be entitled   to assign, transfer, mortgage, under-let
\nor otherwise part with its interest in the demised premises or
\nthe building or buildings thereon without the prior  consent in
\nwriting  of the lessors.\n<\/p>\n
Reference was also  made to Section 14 of the Bombay
\nRent Act which provides as follows:-\n<\/p>\n
“Certain sub-tenants and licensees to
\nbecome tenant on determination of
\ntenancy.\n<\/p>\n
(1)\tWhen the interest of a tenant of any
\npremises is determined for any reason,
\nany sub-tenant to whom the premises or
\nany part thereof have been lawfully sub-\n<\/p>\n
let before the 1st day of February 1973
\nshall subject to the provisions of this Act,
\nbe deemed to become the tenant of the
\nlandlord on the same terms and
\nconditions as he would  have held from
\nthe tenant, if the tenancy had continued.\n<\/p>\n
(2)\tWhere the interest of a licensor, who
\nis a tenant of any premises is determined
\nfor any reason, the licensee, who by
\nsection 15A is deemed to be a tenant
\nshall, subject to the provisions of this
\nAct, be deemed to become the tenant of
\nthe landlord on the terms  and conditions
\nof the agreement  consistent with the
\nprovisions of this Act.”\n<\/p>\n
Mr. Ranjit Kumar urged that there is no pleading to
\nindicate  whether the appellants had been inducted into the
\npremises prior to 1st February, 1973, to  entitle them to the
\nbenefit of the aforesaid provision.  On the other hand, Section
\n15 of the said Act disentitled a tenant from sub-letting or
\nassigning his interest in the tenanted premises.
\n Mr. Ranjit Kumar urged that in such circumstances
\nboth the Appellate Bench  of the Small Causes Court as well
\nas the High Court were correct  in directing the appellants in
\nCivil Appeal arising out of SLP ) 7186\/06 to vacate the
\npremises along with the lessee.\n<\/p>\n
Responding to the submissions made by Mr. Sundaram
\nand Mr. Ranjit Kumar, Mr. Nariman reiterated his earlier
\nsubmissions and referred to a decision of this Court in
\nKarnani Properties Ltd. vs. Augustin,<\/a> (1957) SCR 20  which
\nwas followed in the case of  Puspa Sen Gupta vs. Susma
\nGhose,<\/a>  (1990)  2 SCC 651 holding that  where certain  special
\namenities were to be provided by the landlord, the same could
\nbe    taken into consideration for fixation of the standard rent.
\nIn other words, the same would form part of the  consideration
\ncontemplated in Section 105  of the Transfer of Property Act to
\nbe a component of the expression “rent”.\n<\/p>\n
The fate of the Civil Appeal arising out of SLP  )
\n7400\/06 hinges on the question  as to whether despite the
\nspecific provisions of the lease deed for payment of the lease
\nrents on a monthly basis in advance on or before the 5th  day
\nof  each and every  English calendar month, whether the trial
\njudge was right in holding that in effect  having regard to the
\nprovisions relating to payment of  rates and taxes and other
\noutgoings by the lessee, the lease would  be governed under
\nSection 12 (3) (b)  and not  12 (3) (a) of  the Bombay Rent Act.
\nThe fate of Civil Appeal arising out of SLP (c) 7186\/06
\nwill depend on the question as to whether the  appellants
\ntherein had been lawfully inducted into the demised premises
\nand, if so, whether  they would be bound by the decree for
\npossession passed against the  appellant in Civil Appeal
\narising out of SLP (c) 7400\/06.\n<\/p>\n
Having given our anxious consideration to the
\nsubmissions urged on behalf of the respective parties and the
\nprovisions of the Bombay Rent Act and the various decisions
\ncited, we are of the view that the decision of the Appellate
\nBench of the Small Causes Court at Bombay as affirmed by
\nthe High Court holding that the lease was governed under
\nSection 12 (3) (a)  of the Bombay Rent Act was correct. The
\nlease deed makes it  abundantly clear that the  lease rent was
\nrequired to be paid on a monthly basis.  In fact, in paragraph
\n1 of the terms and conditions of the lease deed it has, inter
\nalia,  been indicated as follows:-\n<\/p>\n
“………TO HOLD THE DEMISED
\nPREMISES unto the Lessee for the term
\nof 98 years commencing from the 1st day
\nof November, 1966 but renewable and
\ndeterminable as hereinafter provided
\nyielding and paying therefore  for the
\nperiod ending on the 31st day of October,
\n1968 a token rent of Rupees one per
\nmonth  and from the  1st day of
\nNovember, 1968 yielding and  paying
\nduring the remainder of the said term of
\n98 years the monthly rent of Rs.3,215\/-\n<\/p>\n
(Rupees three thousand two hundred and
\nfifteen) payable in advance regularly or
\nbefore the 5th day of each and every
\nEnglish Calendar month the first of such
\nmonthly payments to be made on or
\nbefore the 5th day of November, 1968 and
\nsubsequent payments to be made on the
\ncorresponding day of each succeeding
\nmonth during the remainder of the term
\nhereby granted……………”\n<\/p>\n
The said position has been further reiterated in
\nparagraph 3 (a) of the said deed of lease.\n<\/p>\n
The argument advanced on behalf of the lessee that
\nnotwithstanding the  said stipulation, since the lessee was
\nrequired to pay the rates and taxes which formed part of the
\npermitted increase and was, therefore, a part of the rent
\npayable, does not appeal to us.  The consequential submission
\nmade in this regard that since the rates and taxes were
\npayable either annually or after every six months, and the
\nsame formed part of the rent, it must be held that the rents
\nwere payable not each month but after every six months, does
\nnot also appeal to us.\n<\/p>\n
Notwithstanding the decisions in the  Bombay Municipal
\nCorporation case  and Raju Kakara Shetty (supra), the views
\nexpressed therein are distinguishable on facts with the facts of
\nthese two appeals.  Both the said judgments deal with
\npayment of education cess under the Maharashtra Educataion
\n(Cess) Act, 1962, under which the landlord is liable to pay
\nsuch  cess annually but has the right to recover the amount
\nso paid by him from the tenant in addition to the standard
\nrent as a part of the rent itself.  By operation of law education
\ncess has been made a component of the rent payable  by the
\ntenant in respect  of the tenanted premises.  In such a case,
\nthe concept of ‘permitted increase’ would include the cess
\npayable  as part of the rent itself.  In the instant case,
\nhowever, the lessee is required to pay the rates and taxes and
\nother outgoings for the demised premises in respect whereof
\nthe landlord has been given the right to effect permitted
\nincrease equivalent to the amount paid towards rates and
\ntaxes.  The same does not, in our view, makes such payment a
\npart of the rent though it may be a consideration for the grant
\nof lease.  The ‘permitted increase’ in the instant case  serves as
\na yardstick for the landlord to increase the rents on account of
\npayment of rates and taxes by the landlord.
\nConsequently, even though the lease deed  contained a
\nprovision for payment of the rates and taxes exclusively by the
\nlessee and it is also  stipulated that the lessor will have no
\nliability  therefor, the lease will  still be governed  under
\nSection 12 (3) (a)  of the Bombay Rent Act as held by the
\nAppellate Bench of the Small Causes Court at Bombay and
\naffirmed by the High Court.  The expression “consideration”
\nindicated in Section 105 of the Transfer of Property Act has
\nbeen used in a generic sense to include the price paid or
\npromised or of money, a share of  crops, service or any other
\nthing of value.  On the other hand, the lease deed specifies the
\namount to be   paid as rent each month while the rates and
\ntaxes  and  other  outgoings  are  treated  to  be    the
\nseparate liability of the lessee, no doubt having regard to the
\nintention of  the  parties that a building was  to be erected by
\nthe lessee on the demised land.\n<\/p>\n
Once we have arrived at the aforesaid conclusion, the
\nother submissions made on behalf of the  appellant in Civil
\nAppeal arising out of SLP ) No.7400\/06 become  irrelevant.
\nHowever, having regard to the provisions of the lease
\ndeed, there can be little doubt that the decree for possession
\npassed against the lessee will not bind the appellants in the
\nCivil Appeal arising out of S.L.P. (C ) No. 7186 of 2006  who
\nhave acquired an independent status under the provisions of
\nthe deed of lease permitting  assignment of the structure to be
\nerected on the demised land.  In their case, the question of
\ninduction prior to 1st February, 1973, would have no
\napplication.  Although, it has been submitted by Mr. Ranjit
\nKumar that the provisions of clause 6 of the lease deed must
\nbe read with clause 3(o) thereof, the intention of the parties on
\nthe reading of the lease deed as a whole appears to be that the
\nlessee would be entitled to make construction on the demised
\npremises which could be assigned by it to third parties who
\nwould acquire an independent right therein subject to the
\nterms and conditions of the head lease.  Since the appellants
\nin the Civil Appeal arising out of S.L.P. (C ) No. 7186 of 2006
\nwere lawfully inducted into the premises  by virtue of clause 6
\nof the lease deed  they will not be affected by the decree for
\npossession passed against the lessee.\n<\/p>\n
Civil Appeal arising out of SLP  ) No.7400\/06 is,
\ntherefore, dismissed, while Civil Appeal arising out of SLP )
\nNo. 7186\/06 is allowed.  The judgment and decree of the
\nAppellate Bench of the Small   Causes Court as well as High
\nCourt is affirmed as far as Civil Appeal arising out of SLP )
\n7400\/06 is concerned, and is set aside as far as it relates to
\nthe appellants in Civil Appeal arising out of  SLP ) 7186\/06.\n<\/p>\n
In the facts of the case, the parties will bear their
\nrespective costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S Hotel Kings & Ors vs Sara Farhan Lukmani & Ors on 8 November, 2006 Author: A Kabir Bench: B.P. Singh, Altamas Kabir 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 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-140350","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S Hotel Kings & Ors vs Sara Farhan Lukmani & Ors on 8 November, 2006 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-hotel-kings-ors-vs-sara-farhan-lukmani-ors-on-8-november-2006\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S Hotel Kings & Ors vs Sara Farhan Lukmani & Ors on 8 November, 2006 - 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