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Supreme Court of India
Rajinder Kumar Bansal . vs Municipal Committee on 17 August, 2021Author: Hemant Gupta
Bench: Hemant Gupta, A.S. Bopanna
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8238 OF 2013
RAJINDER KUMAR BANSAL & ORS …..APPELLANT(S)
VERSUS
MUNICIPAL COMMITTEE & ORS. …..RESPONDENT(S)
WITH
CIVIL APPEAL NO. 8239 OF 2013
JUDGMENT
HEMANT GUPTA, J.
1. The landlord is in appeals aggrieved against an order passed by the
High Court of Punjab & Haryana on 04.03.2009 whereby the club
activities were not held as business within the meaning of Section 2(f)
of the Haryana Urban (Control of Rent and Eviction) Act, 1973 1 so as to
Signature Not Verified
Digitally signed by
Jayant Kumar Arora
apply the Act to the rented land. The High Court has set aside the
Date: 2021.08.17
17:26:18 IST
Reason:
orders passed by the Rent Controller as well as by the Appellate
1 Hereinafter referred to as the ‘Act’
1
Authority holding that the rented land is being put to use for the
purpose of business.
2. The facts leading to the present appeals are that one Telu Ram was the
original owner of the property. Bhagwan Dass held occupancy rights in
terms of the Punjab Tenancy Act, 1887. Bhagwan Dass earlier executed
a gift deed in favour of Louis club on 16.01.1909 for the purpose of
running a club only after construction of a building thereon in respect of
land bearing Khasra No. 770 comprising 15 bighas and 12 biswas and
Khasra No. 771 comprising of 0 bighas 8 and biswas i.e. total
admeasuring 16 bighas. Bhagwan Dass had doubt about the gift since
he had only occupancy rights and therefore, a lease deed was
executed, after cancelling the gift deed, in favour of the Respondent No.
2 herein on 03.03.1909. The rent was Rs. 10/- per year besides land
revenue. The tenant was given authority to use land for the purpose of
club. It further provided that if there is any construction, the landlord
will pay market price of it. The lease deed in question reads as thus:
“ I, Bhagwan Dass S/o Lala Bihari Lal Mahajan is resident of City
Ambala. That land in Khewat no. 10/12, Khasra No. 542, 543
measuring 15 Bigha 16 Biswa situated in Patti Acharjan, City
Ambala, executant has occupancy rights U/s 6 as per tenancy
law Punjab. That the executant with his own free will without any
pressure gave possession for Entertainment vide Gift dated 16-
01-1909 in favour of Louis Club, Ambala City and possession was
also given to the Club. The gift deed was also got registered. As
gift deed as per condition on line no. 12, 13 of gift deed is not
legally valid, so said Gift deed was cancelled by the present
deed. Occupancy rights are given to Louis Club on perpetual
leases. All the rights are given to the club for its use. Club is in
possession. Club is authorized to use the land for the purpose of
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Club. For the occupancy rights of executant the rent has been
fixed at Rs.10/- per year which will be paid yearly. Land revenue
and amount to be paid to the owner of the land will be paid by
Club. Club is authorised to get the said amount remitted from
Govt. or owner or they may pay them. The condition is that if
Club cease to exist and land is not used then the land will come
back to the executant. If there is any construction the executant
will pay the market price. If executant does not pay the said
price the Club is authorised to remove his material or to sell the
same to somebody else. The executant will have no objection.
The owners have given consent separately for the above. That
perpetual lease deed has been scribed on 03-03-1909.”
3. It is an admitted fact that a pavilion was constructed, which was used
for the purpose of club only. The Respondent No. 2 herein created a
sub-lease in favour of Ladies Tandon Club. Later, one portion of the
property was transferred to the Municipal Committee. The Municipal
Committee changed the use of the property by sinking a tubewell for
the use of residents of the town. Therefore, the appellants filed a
petition for ejectment inter alia on the ground of non-payment of rent;
(2) subletting of the premises without the consent of the landlord; and
(3) that the property had been abandoned by the first respondent
which had ceased to exist and the premises were now being used for
the offices of different departments that is the property has been put to
unauthorized use.
4. The joint written statement was filed on behalf of the Respondent Nos.
1, 2 and 3 i.e., Louis Club, Deputy Commissioner, State of Haryana
inter alia pleading that the premises had never been used for business
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and commercial purposes. Therefore, it is not covered by the rent
control laws. The State claimed ownership of the property. It was
further pleaded that Ladies Tandon Club has been occupying a portion
of the property as a licensee since 1936 which is an unregistered
society. Reference was made to the gift deed in which mutation was
sanctioned and possession delivered to Louis Club.
5. An order of ejectment was passed by the Rent Controller on 18.2.1988.
An appeal against the said judgment was preferred by Louis Club
through the Deputy Commissioner, State of Haryana. Such appeal was
dismissed on 19.03.1994. Aggrieved against the order passed by the
Appellate Authority, a Revision Petition was filed by the Municipal
Committee under Section 115 of the Code of Civil Procedure, though it
should have been under Section 15 (6) of the Act. The High Court
allowed the revision petition.
6. The High Court relied upon the judgment of this Court reported as Haji
Ismail Valid Mohmad v. Sports Club in the name of Union Sports
Club2 that the activities of indoor and outdoor games of a club would
not lead to the conclusion that premises was let out for the purpose of
education. The High Court made reference to Hazara Singh and
others v. Dalip Singh and others3 wherein it was held that if the
land was not principally let for business or trade, the Act could not
2 (1992) 1 SCC 315
3 AIR 1981 Punjab and Haryana 155
4
have been applicable. The Full Bench judgment of the High Court
reported as The Model Town Welfare Council, Ludhiana v.
Bhupinder Pal Singh4, was distinguished that the Full Bench did not
examine the question of “rented land” and thus it is not applicable. It
was also held that club activities shall not mean business. In view of
the said fact, the findings recorded by the Rent Controller and
Appellate Authority were set aside and the eviction petition was
dismissed as the authorities under the Act had no jurisdiction to
entertain the ejectment petition.
7. Learned counsel for the appellant relied upon the judgment in Model
Town Welfare Council wherein, the word ‘business’ appearing in
Section 2(f) of East Punjab Urban Rent Restriction Act, 1949, which is
pari materia with the definition of the rented land in Section 2(f) of the
Act, framed the following questions for consideration:
“(1) Whether the word “business” has been used in the definition
of “rented land” in section 2(f) and in clause (b) of section 13(3)
(a)(ii) of the Act in the restricted sense of commercial business
carried on with the motive of earning profit or in the larger sense
in which the expression includes everything which engages the
time, talent and interest of a man, i.e., something in which a
person proposes to engage himself either as a duty or in
discharge of the responsibilities of his office.”
8. The Full Bench of the High Court while deciding the said question, held
as under:
“24. Wherever the word “business” is defined in a particular
4 ILR 1971 (2) Punjab & Haryana 579
5
statute, it is to be given the meaning ascribed to it in that
definition. The question whether the word “business” has been
used in a narrower sense or in a larger sense arises in a case
where no statutory definition of that expression has been given in
the relevant piece of legislation. At page 164 of Aiyar’s Law
Lexicon of British India (1940 Edition), the word “business” in its
larger sense has been stated to mean “an affair requiring
attention and care; that which busies or occupies one’s time,
attention, and labour as his chief concern.” In the same passage
the word “business” is mentioned to convey, in the narrower
sense, mercantile pursuits; that which one does for a livelihood;
occupation; employment; as, the business of a merchant; the
business of agriculture.” It has finally been stated that “the word
‘business’ is of large signification, and in its broadest sense
includes nearly all the affairs in which either an individual or a
corporation can be actors.” Referring to the larger sense of the
word, it has again been stated at page 165 that ‘business is that
which engages the time, talents and interest of a man; it is what
a man proposes to himself; what belongs to a person to do or see
done, that is properly his business; and a person is bound either
by the nature of his engagements, or by private and personal
motives, to perform a service for another.
31. After carefully considering the law laid down in all the above
cases. I am Inclined to hold :-
(1) That the word “business” is by itself not a word of art and is
capable of being construed both in the wider as well as in the
narrower sense depending on the context in which it occurs
(2) Since the “landlord” within the meaning of section 2(c) of the
Act can include an individual as well as juristic person and there
is no special restrictive definition of the word business in the Act
the expression “business” has been used in section 2(f) of the Act
(in the definition of “rented land”) as well as in section 13(3)(a)(ii)
(b) in the wider sense and not in the narrower sense.
(3) The word business in section 2(f) and section 13(3)(a)(ii) of
the Act need not necessarily be commercial business carried on
with a profit motive. The word includes within its scope a
charitable business or a dealing in the interest of the public or a
section of the public.
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(4) The scope of the word ‘business’ in the aforesaid provision of
the Act is not controlled or coloured by the word ‘trade’ occurring
alongside it in section 2(f) of the Act. Whereas every trade would
be a business, the reverse of it is not true. Business is a genus, of
which commercial and non-commercial business and trade are
some of the species.” (Emphasis Supplied)
9. The Full Bench of the High Court approved the judgment of Madras
High Court reported as P.K. Kesayan Nair v C.K. Babu Naidu5 as
also another judgment of the same High Court reported as P.
Vairamani Ammal v. K.N.K. Rm. Kannappa6 and a Single Bench
judgment of Punjab & Haryana High Court reported as Arjan Singh
Chopra v. Sewa Sadan Social Welfare Centre, Ferozepur Cantt.7
to arrive at the conclusions referred to above.
10. In Arjan Singh Chopra’s case, the tenant was sought to be evicted in
bona fide requirement of a residential building. The stand of the tenant
was that the building was being used for running of a school by the
tenant. The argument raised was that building is a non-residential
building. But if the landlord is able to show that the demised premises
are not being used solely for the purposes of business or trade, the
same would come within the definition of a residential building. The
High Court held that the activity which the tenant society carries on in
running and maintaining the school, by engaging teachers, as also
some of the ministerial staff, to carry on the school, and by carrying on
teaching activities, it is doing a business though it may not be making
5 AIR 1954 Mad. 892
6 1970 (II) M.L.J. 689
7 I.L.R. 1967 (II) Pb. & Hr. 645
7
a profit. It was held that the word business is of much wider
connotation and so the activity definitely falls within the scope of that
word as used in section 2(d) of the Act. It was held as under:-
“5. In the present case the tenant society maintains and
carries on the school, in which connection it must necessarily
engage teachers and some ministerial staff to manage the
school, and for that purpose it must have funds which would be
disbursed in maintaining and running the school. There is no
evidence but probably part of such expense may be realised by
some nominal fees which the society may be charging from its
pupils. So the activity which the tenant society carries on in
running and maintaining the school, by engaging teachers, as
also some of the ministerial staff, to carry on the school, and by
carrying on teaching activity, it is doing a business though it
may not be making a profit. In view of the decision in the case
cited its activity would also come within the scope of the word
‘trade’. However, the word business is obviously of much wider
connotation and so the activity definitely falls within the scope of
that word as used in section 2(d) of the Act. The learned counsel
for the landlord contends that the expression “business or trade”
in section 2(d) has reference to such activity as is carried on in a
shop, and hence carried on with a profit motive. If this was so,
nothing stops the Legislature from limiting a definition in section
2(d) in the Act to a shop, but that is not so. The definition of a
“non-residential building” applies to a building, whether shop or
otherwise, which is used solely for the purpose of trade or
business. So that the definition is not confined to a shop only nor
does it necessarily imply that the activity, that is ‘business or
trade’, must have with it profit motive. So this argument on the
side of the landlord cannot succeed and as the activity of the
tenant-society is ‘business’ within the meaning and scope of that
word as used in section 2(d), the demised premises are ‘non-
residential building’ with the result that the landlord cannot have
ejectment of the tenant-society on the ground which is subject-
matter of argument at this stage.” (Emphasis Supplied)
11. A learned Single Bench of the Madras High Court in a judgment
reported as P. Vairamani Ammal, was examining a case, where the
tenant was using the premises as a rice and flour mill. The landlord has
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sought the ejectment of the tenant on the ground of his bona fide
requirements for the purposes of distribution of water which was
opposed inter-alia on the ground that such purpose is not a business,
which would entitle the landlord to claim vacant possession. The High
Court held as under:
“4. The Oxford Dictionary gives the meaning of the word
“business” as “being busy, task, duty……….habitual occupation,
profession, trade, serious work.” It is, therefore, to be seen that
the word has a very wide import and would cover every activity
where men keep themselves busy. In Halsbury’s Laws of England
3rd Edition, Volume 38, the word ‘business’ is stated as a wider
term than and not synonymous with, trade and means
practically anything which is an occupation as distinguished from
a pleasure. Examining the scheme of the Act it will be seen that
the purpose of the enactment is to consolidate the law relating
to the regulation of the letting of residential and non-residential
buildings and the control of rents of such building. In this context
the meaning of the word “business” will have to be
determined………………………. The Object of the enactment
being one to regulate of occupation of residential and non-
residential buildings. I can see no prohibition against the landlord
putting the building to any legitimate use and also requiring the
building bonafide for any legitimate use. So long as the object is
a legitimate one and so long as the requirements of the sub-
section are fulfilled, I see no reason for restricting the meaning
of the term “for purposes of a business.” If the legitimate activity
by the landlord will be his business the ordinary meaning of the
word ‘business’ applies and there is no warrant for commercial
activities or activities of trade alone. Mr. Baluswami, the learned
Counsel, drew my attention Section 10(3)(b) and submitted that
special provision is made for a case of religious, charitable,
education or other public institution and if the word ‘business’ is
given such a wind construction, there is no necessity for
providing for a separate provision for religious, charitable and
educational institutions. The contention cannot be construing the
word “business” in the very restricted way and to confine it to
accepted as Section 10(3)(b) is wider in its scope and the
institution get possession even though if it is in occupation of
another building in the same town. Further the religious
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institution is entitled to possession even though the purpose
may not be on that falls under Section 10(3)(a)(i)(ii) and (iii).
Sub-section 10(3)(c) would also support the construction which I
am putting on it, as the landlord who is occupying only a part of
the building may apply to the Controller for an order directing a
tenant occupying a portion of the building to put the landlord in
possession if he required additional accommodation for
residential purposes of or purposes of a business which he is
carrying on. The purport of this sub-section would be that if the
landlord is in occupation of a portion of a residential or non-
residential building he would be entitled to the other portion, and
I see no warrant in the section for restricting his right to
activities which are commercial in nature.
8. ……..On a consideration of the decisions and on a
consideration of the submissions made by the learned Counsel
on either side, I am satisfied that the learned District Judge was
right in holding that the carrying on the Thanneerpandal activity
would be for purposes of business as required under Section (3)
(a)(iii) of the Act.”
12. We find that the High Court has distinguished the Full Bench judgment
in Model Town Welfare Council not for good reasons. The rented
land as defined in Section 2(f) of the Punjab Act is pari materia with
definition of rented land in the Act. It has been held that the expression
“business” appearing in Section 2(f) need not necessarily be
commercial business carried on with a profit motive. The word includes
within its scope a charitable business or a dealing in the interest of
public or a section of the public. Therefore, use of land as club for a
pavilion is in interest of section of the public. Thus, land let out to a
club which for the purpose of construction and use of pavilion falls
within the scope of Section 2(f) of the Act and thus eviction petition is
maintainable under the Act.
10
13. The judgment in Haji Ismail Valid Mohmad was a case where the
premises were let out to a club to hold entertainment programmes and
music concerts. It was found that the activities of club are more in the
nature of cultural activities or recreational activities. A perusal of the
said judgment shows that the Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947 apply to premises let out to residence,
education, business, trade or storage and also open land let out for
building purposes. The argument was raised that the premises were let
out for purposes of education. However, the High Court took the view
that the premises let out to tenant were for promoting cultural
activities. Therefore, the tenant was entitled to protection of Section 6
of the Act. It was the said finding which was reversed by the Court, the
Court has held as under:
“16. We regret, we cannot agree with this conclusion of law.
The activities of the club are more in the nature of cultural
activities or recreational activities. They are certainly not for
education. In our view, in the context in which the term
‘education’ appears, it does not refer to such cultural activities
or recreational activities as amounting to education. The basic
purpose of the club activities relate to fraternizing among the
members by playing indoor or outdoor games or otherwise. Such
activities cannot lead to the conclusion that the premises were
let for purposes of education and consequently the
respondent/tenant was not entitled to the protection of the Act.
We are thus constrained to set aside the impugned judgment of
the High Court as well as the judgment of the lower appellate
court and restore the judgment dated August 30, 1974 passed
by the learned trial court. The appeal is allowed with costs.”
14. The High Court has also relied upon Supreme Court judgments reported
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as Narain Swadeshi Mills v. Commissioner of Excess Profits Tax8,
Senairam Doongarmall v. Commissioner of Income Tax9, Manipur
Administration v. Nila Chandra Singh10, as well as the judgment of
Punjab & Haryana High Court reported as Hazara Singh. The
judgment reported in Senairam Doongarmall arises out of the
Income-Tax Act, 1922 to determine the business income. The judgment
reported as Narain Swadeshi Mills is to determine the existence of
business under the Excess Profits Tax Act, 1940. The judgment reported
as Manipur Administration pertains to a control order issued under
the Essential Commodities Act, 1955. Each of the statute is enacted for
a particular objective in mind. The definition in one statute cannot be
used for interpreting the same word in another statute. The judgment
of the High Court in Hazara Singh is renting of an agricultural land
though within the municipal area. All these judgments are clearly not
applicable to the present case where the rented land was let out to a
club with an implied permission to construct. The Tenant has
constructed a pavilion in the year 1911 and the said pavilion was
mortgaged to the District Board. The District Boards were constituted
as part of local self-Government under the Punjab District Boards Act,
1883. The said Act was repealed when the Punjab Municipal Act, 1911
was enacted. The only question requires to be examined was whether
such sports activity can be said to be either business or trade. The Full
8 AIR 1955 SC 176
9 AIR 1961 SC 1579
10 AIR 1964 SC 1533
12
Bench of the High Court was erroneous in holding that the land let out
to the club used for pavilion is not for the purpose of business.
15. Learned Counsel for the State raised an argument that the huge
amount of property tax has not been paid by the lessee or the
successor. The fact is wholly inconsequential. Since the finding of fact
was recorded by the learned Rent Controller and the Appellate
Authority has not been disputed, therefore, the order of the eviction
was rightfully passed against the respondents.
16. Consequently, the present appeals are allowed. The order passed by
the High Court is set aside. The respondents are given three months’
time to vacate the premises and handover the possession to the
appellants. It is needless to say that the appellants have to pay all
taxes which are due on the land before they are permitted to use the
premises for their purposes.
………………………………………J.
(HEMANT GUPTA)
………………………………………J.
(A.S. BOPANNA)
NEW DELHI;
AUGUST 17, 2021.
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