Supreme Court Upholds Eviction Based on Non-User of Rented Premises: Nilesh Laxmichand vs. Shantaben Purushottam Kakad (2019)

Date of the Judgment: May 08, 2019

Citation: [Not Available in Source]

Judges: Ashok Bhushan, J., K.M. Joseph, J.

Can a tenant be evicted if they do not use the rented property for the purpose it was rented for a continuous period of six months? The Supreme Court of India addressed this question in a case concerning a shop in Mumbai. The Court examined whether the tenant had stopped using the premises for the intended purpose, which was a bookstore, and if so, whether this was a valid ground for eviction under the Maharashtra Rent Control Act, 1999. The bench consisted of Justices Ashok Bhushan and K.M. Joseph, with the majority opinion authored by Justice K.M. Joseph.

Case Background

The case involves a dispute over a shop on the ground floor of a building in Mumbai. The original plaintiff, Shantaben Purushottam Kakad, filed a suit seeking the eviction of the defendants, Nilesh Laxmichand and his father. The plaintiff claimed that the defendants had stopped using the shop for its original purpose as a bookstore, had sublet the premises, and were causing nuisance. The defendants, on the other hand, contended that the shop was initially taken on rent by the second defendant (the father) but the rent receipt was in the name of the first defendant (the son) for spiritual reasons. They also claimed that they had been using the premises for business purposes, including selling books, readymade garments, and fast food.

Timeline:

Course of Proceedings

The Trial Court dismissed the suit, finding that the tenancy was in favor of the second defendant, not the first defendant (who was a minor at the time of inception of tenancy). It also held that the defendants had been using the premises for the purpose it was let out, and the allegations of subletting and nuisance were not proved. However, the Appellate Court reversed the Trial Court’s decision, holding that the tenancy was in the name of the first defendant, and the defendants had not been using the premises for the purpose it was let out for a continuous period of six months. The High Court upheld the decision of the Appellate Court, leading to the appeal before the Supreme Court.

Legal Framework

The Supreme Court considered the following legal provisions:

• Section 16(1)(c) of the Maharashtra Rent Control Act, 1999: This section allows for eviction if the tenant’s conduct is a nuisance or annoyance to the adjoining or neighboring occupier.
• Section 16(1)(n) of the Maharashtra Rent Control Act, 1999: This section states that a tenant can be evicted if the premises have not been used, without reasonable cause, for the purpose for which they were let for a continuous period of six months immediately preceding the date of the suit. The provision reads as follows:
  
  “16(1)(n). that the premises have not been used without reasonable cause for the purpose for which they were let for a continuous period of six months immediately preceding the date of the suit.”
• Section 11 of the Indian Contract Act, 1872: This section deals with the capacity of parties to contract, and it was noted that a minor is not competent to contract.
• Section 7(2)(A) of the Bombay Shops and Establishments Act, 1948: This section deals with the validity of a registration certificate.
• Section 2(32) of the Bombay Shops and Establishments Act, 1948: This section defines “year” as commencing on the first day of January.

Arguments

Appellants’ Arguments:

• The first defendant was a minor in 1971, and therefore, could not have entered into a tenancy agreement. The second defendant, the father, was managing the business, and the license was in his name.
• There was no illegal subletting or nuisance.
• The premises were being used for business purposes, and the non-user was not continuous for six months prior to the suit.
• The Appellate Court wrongly considered the registration certificate issued on 30.11.2007, whereas the relevant period was six months prior to the institution of the suit.

Respondents’ Arguments:

• The rent receipts were in the name of the first defendant, establishing him as the tenant.
• The second defendant was in possession for the benefit of the first defendant.
• The defendants had stopped using the premises as a book store and had started other businesses.
• The non-user of the premises for the purpose it was let out was continuous for six months before the suit.

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether the eviction of the appellants was justified on the grounds of nuisance under Section 16(1)(c) of the Maharashtra Rent Control Act, 1999.
2. Whether the eviction of the appellants was justified on the grounds of subletting.
3. Whether the eviction of the appellants was justified on the grounds of non-user under Section 16(1)(n) of the Maharashtra Rent Control Act, 1999.
4. Whether the Appellate Court was correct in holding that the second defendant was not a tenant.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Section 11 of the Indian Contract Act, 1872*: The Court noted that a minor is not competent to contract, but the tenancy was deemed to be for the benefit of the first defendant.
• Section 16(1)(c) of the Maharashtra Rent Control Act, 1999*: The Court found that the ground of nuisance was not established.
• Section 16(1)(n) of the Maharashtra Rent Control Act, 1999*: The Court found that the ground of non-user was established.
• Section 7(2)(A) of the Bombay Shops and Establishments Act, 1948*: The Court used this provision to determine the validity period of the registration certificate.
• Section 2(32) of the Bombay Shops and Establishments Act, 1948*: The Court used this provision to define the “year” for the validity of the registration certificate.

What weighed in the mind of the Court?

The Supreme Court’s decision was heavily influenced by the fact that the appellants failed to prove that they were using the premises for the purpose it was let out for a continuous period of six months prior to the suit. The Court noted that the registration for the business was not renewed for the relevant period, and there was no evidence to show that the premises were being used as a book store during that time. The Court also emphasized that the burden of proving non-user was on the landlord, but in this case, the appellants’ own actions and lack of evidence supported the landlord’s claim.

“We would think that in the circumstances of the case, having regard to the fact that two courts have found the ground of non-user under Section 16(1)(n) of the Maharashtra Rent Control Act, 1999 established and the facts as noted by us, particularly in an appeal after Special Leave, we do not deem it fit to interfere with the judgment of the High Court.”

“The contention of the appellants would appear to be that the Appellate Court has proceeded on the basis that the registration was obtained on 30.11.2007. Appellate Court further finds that there is a gap of 13 months from the date of the institution of the suit and the date on which the registration was obtained on 30.11.2007.”

“The fact that there is a registration, however, would not be sufficient to establish that there is use of the premises. In other words, even if a person has registration, that by itself would not mean that the tenant is actually using the premises for the purpose for which it is rented out to him.”

Key Takeaways

• A tenant can be evicted if the rented premises are not used for the purpose it was let out for a continuous period of six months immediately preceding the date of the suit.
• The burden of proving non-user is on the landlord, but the tenant must also provide evidence of continuous use.
• Registration under the Shops and Establishments Act is not sufficient proof of actual use of the premises.
• The relevant period for determining non-user is the six months immediately preceding the date of the suit.
• The Court will not interfere with the concurrent findings of two lower courts unless there is a clear error of law or fact.

Directions

No specific directions were given by the Supreme Court in this case.

Development of Law

The ratio decidendi of this case is that a tenant can be evicted under Section 16(1)(n) of the Maharashtra Rent Control Act, 1999, if the premises are not used for the purpose it was let out for a continuous period of six months immediately preceding the date of the suit. This case clarifies that mere registration under the Shops and Establishments Act is not sufficient to prove actual use of the premises. It also emphasizes the importance of the tenant providing evidence of continuous use to rebut the landlord’s claim of non-user.

Conclusion

The Supreme Court dismissed the appeal, upholding the eviction of the appellants based on the ground of non-user under Section 16(1)(n) of the Maharashtra Rent Control Act, 1999. The Court found that the appellants had failed to prove that they were using the premises for the purpose it was let out for a continuous period of six months prior to the suit. The Court emphasized that the registration for the business was not renewed for the relevant period, and there was no evidence to show that the premises were being used as a book store during that time. The Court also noted that the burden of proving non-user was on the landlord, but in this case, the appellants’ own actions and lack of evidence supported the landlord’s claim.