BALAJI CINE ENTERPRISES AND ORS. Vs. SAKTHI TALKIES AND ANR.

JUDGEMENT

(1.) Defendants 1 to 3 in Original Suit No. 266 of 1970 on the file of the Court of the Subordinate Judge of Dindigul are the Appellants.

(2.) The material point that arises for determination in this appeal filed by the Defendants (the first Defendant being a firm of which Defendants 2 and 3 are the partners), is whether the building in the suit property which the Appellants took on lease under a registered lease deed dated 26th July 1965, a registration copy of which has been marked as exhibit A -10 is a building within the meaning of the Madras Buildings (Lease and Rent Control) Act, XVIII of 1960 (hereinafter referred to as the Act) so as to entitle the Appellants to claim the protection afforded to tenants by the provisions of the said Act. The suit property consists of a cinema exhibition theatre with all its furniture, fittings, fixtures, cinematograph projects with all accessories and other appliances, known as Sakthi Talkies in Dindigul town. The theatre is owned by the Plaintiff who is a public limited company incorporated under the Indian Companies Act and originally, the Plaintiff was running the cinema exhibition business in the theatre through its authorised representatives. In the year 1960, the Board of Directors as well as the shareholders of the Plaintiff company decided to lease out the theatre consisting of the building, fixtures, furniture, machinery, cinema equipment and all accessories by calling for tenders by public advertisement. When, for the said purpose, tenders were called for, the first Appellant who was one of the tenderers gave the highest offer and his tender of Rs. 1,750 per month for the theatre was accepted by the Plaintiff company. Thereafter, a registered document of lease, exhibit B -1, dated 19th August 1960 was entered into between the Plaintiff and the first Appellant for a period of five years. Among other stipulations contained in the document, it was also provided that the first Appellant should pay a rent of Rs. 750 per month for the building and a rent of Rs. 1,000 should be paid for the fixtures, furniture, equipment, machinery, etc., and two separate schedules were drawn up, one containing the descriptive particulars of the building and the other containing the particulars of the machinery, equipment, etc. According to the Plaintiff, the lease under exhibit B -1 was a composite lease, even though the building and the machinery had been described in two schedules and the rent offered to be paid by the first Appellant was split up into two categories to make it notionally appear that a sum of Rs. 750 was to represent the rent for the building and a sum of Rs. 1,000 was to represent the rent for the machinery. After the expiry of the period of five years provided for under exhibit B -1 in 1965, the Plaintiff company again resolved to lease out the theatre for a further period of five years and consequently, tenders were once again called for. On this occasion also, the first Appellant responded to the call for tenders with the highest bid of Rs. 3,000 per mensem for the theatre and, very naturally, the Plaintiff accepted the tender of the first Appellant. Thereafter, as a result of the consensus arrived at between the parties, instead of the lease transaction being covered by a single deed as in exhibit B -1, two separate deeds were entered into the first one being a registered deed of lease relating to the building portion of the cinema theatre and the second one being an unregistered agreement relating to the machinery, equipment, furniture and fittings part of the theatre. Exhibit A -10 is a registration copy of the lease deed that was so entered into between the parties on 26th July 1965 and exhibit A -11 is the unregistered agreement which was contemporaneously executed by the parties on the same day. As before, a sum of Rs. 750 out of the tender of Rs. 3,000 made by the first Appellant for the theatre was apportioned towards the rent of the building under exhibit A -10 and the balance amount of Rs. 2,250 was included in Exhibit A -11 and treated as rent for the machinery and equipment. The Plaintiff would have it that, though the parties to the lease arrangement created two documents, one relating to the lease of the building and the other relating to the lease of the equipment, machinery, etc., the lease was a composite one and it was so understood by the parties when they brought into existence the two lease deeds. As the lease of the theatre granted to the first Appellant was to expire on 18th August 1970, the Plaintiff, even prior to the expiry of the lease period, decided to lease out the theatre again for a further period of five years and to call for tenders from the public for taking the theatre on lease. The fourth Defendant, who was originally arranged as the second Defendant in the suit, came forward with an offer to take the theatre on lease on a rent of Rs. 4,000 per month. The first Appellant wanted a continuance of the lease, but when directed by the Plaintiff to canalise his offer in the form of a tender, failed to act accordingly, and it later transpired that it was with a design the first Appellant failed to submit his tender. After considering the tenders received by the Plaintiff in response to its advertisement, the Plaintiff accepted the tender of the fourth Defendant and in order to put the fourth Defendant in possession of the theatre, called upon the first Appellant, by means of a notice, dated 16th June 1970 under the original of exhibit A -14, to surrender possession of the cinema theatre on 18th August 1970. The first Appellant sent a reply, exhibit A -15, contending therein that the lease of the theatre building in his favour would be covered by the provisions of the Madras Buildings (Lease and Rent Control) Act, that as such, he was entitled to be in possession of the building on and with effect from 19th August 1970 as a statutory tenant and that he was not bound to act upto the terms of the demand made by the Plaintiff in its notice, exhibit A -14. The first Appellant followed his reply notice by instituting a suit in Original Suit No. 1122 of 1970 on the file of the District Munsif's Court, Dindigul, praying therein for a declaration that he is entitled to the benefits of the Act and for an order of injunction in his favour from being evicted from the building. An interim order of injunction was also sought to be obtained by the first Appellant in the said suit and this led to certain incidental proceedings between the parties, but it is not necessary to make reference to them in this appeal. It was thereafter, the Plaintiff company came forward with the present suit, Original Suit No. 266 of 1970 praying that a decree for possession should be passed in its favour and further more, the first Appellant should be called upon to pay damages or profits of Rs. 12,000 for a period of two months from 18th August 1970 and future mesne profits or damages for use and occupation at such rate as may be fixed by the Court under Order XX, Rule 12 of the Code of Civil Procedure.

(3.) Resisting the action of the Plaintiff, the first Appellant contended in its written statement that though the theatre as well as the machinery, furniture, fittings, etc., belonged to the Plaintiff, the building and the machinery were never treated as a composite entity by the parties when they entered into the lease arrangement. The first Appellant contended that the rights of the parties to the action had to be determined with reference to the lease arrangement effected on 19th August 1965, and specifically pleaded that, with a view to avail to the tenant the benefits of the Act as amended in 1964, a separate and independent lease was created over the building of the cinema theatre under the original of exhibit A -10 and as a consequence of the consensus forged between the parties at the relevant time and the execution of a separate lease deed for the building alone, the first Appellant had, undoubtedly become entitled to invoke the provisions of the Act to his aid and maintain his possession of the building uninterruptedly as a statutory tenant. The first Appellant explained away exhibit A -11, the unregistered lease deed relating to the machinery, equipment, furniture, etc., as an independent transaction, dissociated, in content and context, from the lease of the building and refuted the Plaintiff's contention that the two documents were inseparable and formed part and parcel of the same transaction so as to make the lease of the building and the equipment as components of a composite arrangement. It was expressly pleaded by the first Appellant that it did not take the building and the machinery as a going concern and further added that the Plaintiff had no right to let out the building to third parties so long as it was entitled TO be in occupation of the building as a statutory tenant. The first Appellant justified the filing of the suit, Original Suit No. 1122 of 1970 on the plea that as it apprehended forcible dispossession at the hands of the Plaintiff, it had to safeguard its rights by seeking the protection of the Court. Various other please were also projected by the first Appellant relating to inter se monetary payments and adjustments between the parties, but they do not require mention as they are not germane to the issue involved in the appeal. The claim of the Plaintiff for past mesne profits at Rs. 12,000 was attacked by the first Appellant as an unjust and unconscionable claim and with regard to future mesne profits or damages, the first Appellant 's case was that it was not bound to pay anything more than Rs. 3,000 per month.