MULK RAJ KAPOOR Vs. FIFTH ADDL DISTRICT AND SESSIONS JUDGE BAREILLY
LAWS(ALL)-1979-1-56
HIGH COURT OF ALLAHABAD
Decided on January 02,1979

MULK RAJ KAPOOR Appellant
VERSUS
FIFTH ADDL.DISTRICT AND SESSIONS JUDGE, BAREILLY Respondents

JUDGEMENT

K. C. Agrawal, J. - (1.) BY this petition filed under Article 226 of the Constitution, Mulkraj Kapoor, who was the tenant of premises No. 147, Civil Lines, Bareilly, challenging the validity of a judgment of the 5th Addi tional District Judge, Bareilly dated 8.10.1977. Briefly stated, the facts which led to the filing of the present writ petition are these : Sidheshwar Baboo Mehra, respondent no. 3 was the owner of an open piece of land situated at Bareilly. The petitioner approached the respondent no. 3 and requested him to make a building on the vacant land so that the same could be used by the petitioner for the purposes of a Restaurant, which he intended to commence. In pursuance of the oral negotiations, which took place between the petitioner and respondent no. 3, the petitioner advanced certain amount in cash to respondent no. 3, for making the constructions. The constructions were completed and thereafter, they were let out to the petitioner. The parties executed a lease deed on the 27th December, 1963 laying down the terms and conditions, on which rights and obligations of the parties had to be determined. Amongst various clauses, those material for our purposes are contained in clauses 6 and 7 of the said lease. These clauses are extracted below :- "6. That the lease shall be for a period of a five years from the completion of the building and giving over possession of the same to the lessee. The lessee shall however have an option to renew the lease for four periods of five years each on such terms and conditions as may there be mutually agreed to between the parties. 7. That in case the lessee would exercise his option to renew the lease for further periods of five years each, then he shall atleast three months prior to the expiry of the period limited hereby 'intimate of his intention to do so in writing to the lesson." Initially, the period of the lease was 5 years from the constructions of the building. The construction of the building was completed in March 1965 The first period of 5 years was to end in February 1970. Before this period could expire, as entitled, the petitioner gave an option stating "I shall be taking the hotel for the term of 5 years." It, however, appears that after the expiry of the second term of 5 years, the petitioner did not give the option of the renewal of the lease. According to the respondent no. 3 consequent upon the failure of the petitioner to give the option, the lease of the petitioner was terminated. He thereafter filed an application under section 21 (1) (a) of U. P. Act No. 13 of 1972 in 1976 against the petitioner on the ground that the premises was required by him for settlement of his two sons who were major and were unemployed. Respondent No. 3 alleged that he was previously doing business at Lucknow, but because of the heavy loss which he had suffered, he had to shift to Bareilly and that in Bareilly he had no business in which he could either engage himself or his sons. About the sons the case of respondent No. 3 was that Deepak, who was his eldest son aged about 26 - years, was unemployed and was loitering about without any engagement or business. The second son, the respondent no. 3 claimed who was aged about 20 years was also required to be settled. In this application the respondent no. 3 further claimed that the petitioner had substantially closed the business as he had engaged himself in other business. The application was resisted by the petitioner. He claimed that the respondent no. 3 was not entitled to file the application against him inasmuch as the period for which the lease had been taken by him had not expires and that he was entitled to continue for 20 years i.e. up to 1985. The petitioner also asserted that the need of the respondent no. 3 was not bona fide and that the application had been filed on the cooked grounds for the purposes of evicting him. The petitioner claimed that he was likely to suffer greater hardship from the acceptance of the application. Before the Prescribed Authority the parties filed affidavits and adduced evidence. The Prescribed Authority allowed the application holding that the need of the respondent no. 3 was bona fide that he was likely to suffer greater hardship inasmuch as the two sons of respondent no. 3 were unemployed and required immediate attention for being held that a major portion of the premises in dispute was lying unused and that the petitioner was not likely to suffer any hardship. Against the aforesaid judgment, the petitioner preferred an appeal. The appeal met with the same fate. ' The appellate authority found that the need of respondent No. 3 was bona fide and also that the petitioner was not likely to suffer any hardship. Aggrieved the petitioner filed the present writ petition. Sri R. H. Zaidi, the learned counsel for the petitioner contended that the courts below committed an error in holding that the application of respondent no. 3 was maintainable against the petitioner. The sole basis for this argument was that the lease had been taken by the petitioner for a period of 20 years and that so long as that period had not expired, the petitioner was entitled to continue in possession of the premises as a matter of right and that the said right could not be taken away by the filing of the application under section 21 (1) (a) of the Act. I have already extracted the relevant paragraphs from the lease-deed which had been entered into between the petitioner and the respondent no. 3. An analysis of the aforesaid two clauses of the lease would show that the initial period for which the lease had been taken by the petitioner was 5 years. Under clause (7) of the aforesaid lease, the, petitioner had been given an option to get the lease renewed after every five years. But it will not be correct to say that the initial period of lease was 20 years. The initial period, as already pointed out, was 5 years and was renewable after every five years, The total period for which the lease could be got renewed by the petitioner had no right to get the lease renewed. It will not, be correct to argue that although the petitioner had not exercised the option after the expiry of the second term of 5 years, he was still entitled to remain in possession of the premises. According to the principle of interpretation, the intention of the parties has to be gathered from the lease deed itself. In para 6 of the lease deed, it would be seen that the parties very clearly stated that the lessee shall have an option to get the lease renewed for four periods of five years. This leaves beyond doubt that the lease was for a period of 5 years each time, and its renewal was dependent on the exercise of the option by the petitioner. The option had to be exercised before the expiry of the fixed period of lease and once the option had been exercised the landlord could not deny the rights of the lessee conferred by the lease deed. In Caltex (India) Limited v. Bhagwan Devi Marodla, A. I. R. 1969 S. C. 405 the Supreme Court had an occasion to consider the nature of the right of a renewal of lease. It held :- "At common law stipulations as to terms in a contract giving an option for renewal of a lease of land were considered to be of the essence of the contract even if they were not express to be so and were construed as conditions precedent." The Supreme court held that if the lessee had not exercised the option of renewal within the time limited by the clause, they would not be entitled to a renewal. The reason is that a renewal of a lease is privilege and if the tenant wishes to claim the privilege he must do so strictly within the time limited for that purpose. Clause (7) of the aforesaid lease deed clearly provides that option had to be exercised three months prior to the expiry of the period of five years. That being so, the petitioner, having not exercised the option was not entitled to a renewal. The second argument of the learned counsel for the petitioner, that he was entitled to continue to remain in possession of the property for a period of 20 years without exercising the option cannot be accepted. From the conduct of the petitioner himself, it would be seen that the interpretation placed by the learned counsel is incorrect. After the first period of 5 years was going to expire the petitioner sent a letter on 25th December, 1969 to the respondent no. 3 intimating that he was prepared to take the hotel for the next term of 5 years. The sending of the letter is indicative of the intention of the parties with which the lease deed had been written. Subsequent conduct of a party is relevant for the purposes of finding out the Intention. In fact, the conduct of a party supplies a clue for finding out intention. The second argument of the learned counsel was about the question of comparative hardship. Before coming to this point I wish to note that the counsel did not challenge the finding on the question of bona fide requirement given in favour of respondent no. 3. So far as the question of comparative hardship is concerned, the two courts below dealt with the evidence in detail and found that the respondent no. 3 was required to settle his sons and he had no other place where he could start the business. Dealing with the hardship of the petitioner, the courts below held that a major portion of the premises let out to him was not in his use and that the same was lying vacant. This was, however, disputed by the learned counsel for the petitioner. I am unable to find substance in the same. For arriving at a finding that the petitioner was not using the major portion of the building, the court below had relied upon the fact that the petitioner had not filed any evidence and did not bring any thing on record to prove that he was making earnings from the premises in dispute. The business that the petitioner was doing was of a hotel. If the petitioner was actually doing the business of hotel, one fails to understand the reasons why the petitioner did not bring documentary evidence including the returns of income-tax, sales tax and the balance-sheet showing that the business was being done in the premises in dispute. If the whole of the premises was not being used by the petitioner for the business was Restaurant, the petitioner was not likely to suffer any hardship. It was next contended by the petitioner's learned counsel that the courts below committed an error in holding that the petitioner could shift his business to some other place. Counsel contended that there was no evidence on the record to justify the said finding. Be that as it may, the finding on the question of the hardship has not been given merely on this circumstances. As held by the Supreme Court in P. B. Desai v. C. M. Patel A. I. R. 1974 S. C. 1059 the landlord is requred to show that other alternative accommodation is not available to him and the tenant is also required to bring evidence to establish that no alternative accommodation is available to him. If, therefore, the petitioner did not bring any evidence on the record that no alternative accommodation was available to him, the finding on the question of hardship, if necessity, had to go against the petitioner. For what I have said above, 1 must find that the judgment of the courts below did not suffer from any error. The last argument advanced by the learned counsel for the petitioner was about the quantum of compensation. Counsel contended that the sum of Rs.3,000/- awarded to him was inadequate and that the same could not be considered to be a compensation to which he was entitled to under the Act. Second proviso to clause (1) of Section 21 lays down that an authority may award compensation against the landlord to the tenant, if the application is allowed in respect of a building which had been let out exclusively for non-residential purposes. The maximum limit of compensation, which can be awarded to a tenant, could not be an amount exceeding two years rent. It is true that looking at the rent of Rs.1100/- per month, the amount of Rs.3,000/- was inadequate, but the question of adequacy is again a question of fact. It has to be decided on the evidence brought on record of each case. The two courts below found that since the petitioner was not doing any business of any substantial nature, the compensation of Rs.3,000/- would meet the requirement of law. I am unable to find that the view taken by the court below suffers from any manifest error of law requiring interference by this court. If the petitioner was not doing any business, the award of compensation cannot be interfered. For these reasons, the writ petition fails and is dismissed. There shall be no order as to costs. The petitioner is granted six months time to vacate the premises. The petitioner undertakes to handover possession to respondent No. 3 within this period of six months. Of course, the petitioner would be liable to pay rent for this period of six months.;


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