Saturday 2 September 2017

When doctrine of merger is not applicable to landlord tenant relationship?

The argument that since the revision petitioner is also a co-owner, the petition for eviction is unsustainable, cannot be accepted. The learned counsel for the revision petitioner would submit that when a lesser estate (here the tenancy) and a greater estate (the ownership) coincide and meet in one and the same person without any intermediate estate, the lesser is immediately annihilated and merged. In other words, the lesser estate is sunk or drowned in the greater so that the greater estate is accelerated so as to become at once an estate in possession. Where a lesser and a greater estate in the same property come together and vest, without any intermediary estate in the same person and in the same right, the lesser is immediately annihilated by operation of law. To apply the principle of merger, the estates shall unite in the same person without any intervening estate and the person in whom they unite shall hold them both in the same right. The merger is the consequence of the tenant retaining the lease and acquiring the reversion. As stated earlier, for merger to be effective, the lease and the reversion must be vested in the same person in the same right with no intermediary estate. If a landlord transfers his rights in the leased property to his tenant, there would be a merger of the rights of the tenant in his higher rights as owner, in which case the tenancy would come to an end under Section 111(d) of the Transfer of Property Act. But, Section 111(d) itself makes it clear that the lease is determined only in a case where, by such assignment the interest of the lessee and the lessor in the whole of the property becomes vested. In other words, the emphasis in the Section is on the coalescing of the entire rights of the lessor and the lessee in the whole of the property in the hands of the lessee. But the learned counsel for the respondent rightly points out that the principle of merger has no application to the facts of this case, since the whole of the property did not vest in the hands of the revision petitioner.

7. In this connection, the Supreme Court decision in Pramod Kumar Jaiswal v. Bibi Husn Bano MANU/SC/0346/2005 : 2005 (5) SCC 492 has been relied upon by the learned counsel for the landlord where it was held that a lessee who took assignment of the rights of a co-owner lessor cannot successfully raise the plea of determination of tenancy on the ground of merger of his lessee estate in that of the estate of the landlord. It was held in the same decision:

On taking an assignment from some of the co-owner landlords, the interest of the lessee and the lessor in the whole property do not become vested at the same time in one person in the same right. Therefore, a lessee who has taken assignment of the rights of a co-owner lessor cannot successfully raise the plea of determination of tenancy on the ground of merger of his lessee's estate in that of the estate of the landlord. It is, thus, clear that there is no substance in the contention of the learned counsel for the appellants that in the case on hand, it should have been held that the tenancy stood determined and the application of the landlord for a direction to the tenant to deposit the rent in arrears should have been dismissed. The position of the appellants as tenants continues and they are bound to comply with the requirements of the Rent Control Act under which the order for deposit has been passed against them.
Since the revision petitioner has not obtained assignment of the entire rights of the lessor, there could be no merger or determination of the lease under Section 111(d) of the Transfer of Property Act. In the light of what has been stated above, we have no hesitation to hold that there was no determination of the lease since the whole of the estate did not vest in the revision petitioner herein.
IN THE HIGH COURT OF KERALA

R.C.R. No. 287 of 2010

Decided On: 12.07.2011

 Poolakandy Malayil Vijayan Vs. Sakeena

Hon'ble Judges/Coram:
Mr. Justice Pius C. Kuriakose and Mr. Justice N.K. Balakrishnan
Citation:2011 (3) KLT 657 : 2011 (3) KLJ 600 : 2011 (3) KHC 587 : 
ILR 2011 (3) Ker. 737




1. The tenant is in revision. An order of eviction was passed against him by the learned Rent Control Appellate Authority under Section 11(4)(ii) of the Kerala Buildings (Lease and Rent Control) Act, 1965 (for short, 'the Act'), in reversal of the order of the Rent Control Court declining eviction. Brief facts necessary for the case are as follows:

The petition schedule building was originally obtained by Choyi, the father of the revision petitioner from the original landlord. The respondent Sakeena and one Nazar purchased the petition schedule building from the original owner as per Ext.A-1 document dated 17-10-1995. Nazar mentioned above, assigned his undivided half right in favour of the revision petitioner and his brother Santhosh Kumar. The respondent sought eviction contending that the revision petitioner being the tenant used the building in such a manner as to reduce its value and utility materially and permanently. The specific allegation made in paragraph (3) of the petition was that the revision petitioner removed the window panes, grills and walls of the building. The allegation that the building was used in such a manner so as to reduce its value and utility materially and permanently, was stoutly denied by the revision petitioner. It was stated that the wooden frame with glasses in front of the room was eaten by white ants and so it was substituted by a new frame. It was done only by way of maintenance and the said act has only added strength and value to the building.

2. Before the Rent Control Court, the landlady's husband was examined as P.W.1 and Exts.A-1 to A-5 were marked. The commission report was marked as Ext.C-1. No evidence was adduced on the side of the revision petitioner. On evaluating the evidence adduced by the parties, the learned Rent Controller found that the claim for eviction under Section 11(4)(ii) is unsustainable. He has also found that the eviction petition is unsustainable in view of the fact that, the revision petitioner's brother Santhosh Kumar who is a co-owner, was not impleaded and that his concurrence has not been obtained. Thus, the Rent Control Petition was dismissed.

3. In the appeal, the learned Appellate Authority found that since action for eviction can be instituted by one of the co-owners, the petition is maintainable. It was found that though the revision petitioner is also a co-owner of the petition schedule building, since there was no determination of the tenancy, he continues to be the tenant and as such, the petition is perfectly maintainable. It was also found that by removing the window panes, the value and utility of the building was materially and permanently reduced Hence the impugned order of eviction was passed against the revision petitioner.

4. Shri P. B. Krishnan, learned counsel appearing for the revision petitioner would submit that the petition for eviction was filed by the respondent who is only a co-owner of the building seeking to evict the revision petitioner who is also another co-owner of the petition schedule building. It is also argued that the allegation made by the respondent that by removal of the window panes, grills etc, the value and utility of the premises were affected or reduced materially and permanently, is totally unacceptable, since the evidence would make it clear that by putting up new wooden frames with glasses it only added the value and look of the building. The fact that the revision petitioner is also the co-owner and as such he will not do any act so as to reduce its value and utility, should have been borne in mind by the learned appellate authority, it is argued. It is also pointed out that according to the respondent, the revision petitioner removed the grills and front glass frame etc, on the day just previous to the filing of the RCP. The RCP was filed on 10-12-2007 and on the same day the Commissioner inspected the property at 5.30 pm. It was observed by the Commissioner that at the time of inspection, no repair or maintenance work was going on in the building. So many 'persons' were seen inside the petition schedule building which is used as a 'hotel'. Those customers had gone to that hotel for taking food. Only in the front portion some repair was being done. It was found by the Commissioner that the grills were seen fitted and the wall to a height of half a metre was plastered with cement and above the same sunglass film was also seen affixed. It was further stated that at the place where the frame was fitted, on either side, the wall was put up by using cement bricks. It was plastered also. Though, it was stated by P.W.1 that by the said act of the revision petitioner, damage was caused to the wall of the building, the Commissioner did not state so in Ext.C-1.

5. The learned counsel for the revision petitioner would submit that the aforesaid act of replacing the wooden frame which was damaged by white ants can never be an act which can be termed as misuser, so as to affect the value and utility of the building materially and permanently. The damage must not only be material, but should also be of a permanent character. This contention has been strongly resisted by Shri B. Krishnan, learned counsel appearing for the landlady, pointing out that the evidence given by P.W.1 was not controverted by the revision petitioner who was diffident in mounting the witness box. But the revision petitioner would contend that since there was no evidence worth to be contradicted, it felt no necessity for the revision petitioner to mount the witness box. The learned counsel would submit that the observation made by the Commissioner in Ext.C-1 cannot in any way be termed as an act which was sufficient to reduce the value and utility of the building materially and permanently, especially in view of the fact that the revision petitioner is also one of the co-owners of the petition schedule building.

6. The argument that since the revision petitioner is also a co-owner, the petition for eviction is unsustainable, cannot be accepted. The learned counsel for the revision petitioner would submit that when a lesser estate (here the tenancy) and a greater estate (the ownership) coincide and meet in one and the same person without any intermediate estate, the lesser is immediately annihilated and merged. In other words, the lesser estate is sunk or drowned in the greater so that the greater estate is accelerated so as to become at once an estate in possession. Where a lesser and a greater estate in the same property come together and vest, without any intermediary estate in the same person and in the same right, the lesser is immediately annihilated by operation of law. To apply the principle of merger, the estates shall unite in the same person without any intervening estate and the person in whom they unite shall hold them both in the same right. The merger is the consequence of the tenant retaining the lease and acquiring the reversion. As stated earlier, for merger to be effective, the lease and the reversion must be vested in the same person in the same right with no intermediary estate. If a landlord transfers his rights in the leased property to his tenant, there would be a merger of the rights of the tenant in his higher rights as owner, in which case the tenancy would come to an end under Section 111(d) of the Transfer of Property Act. But, Section 111(d) itself makes it clear that the lease is determined only in a case where, by such assignment the interest of the lessee and the lessor in the whole of the property becomes vested. In other words, the emphasis in the Section is on the coalescing of the entire rights of the lessor and the lessee in the whole of the property in the hands of the lessee. But the learned counsel for the respondent rightly points out that the principle of merger has no application to the facts of this case, since the whole of the property did not vest in the hands of the revision petitioner.

7. In this connection, the Supreme Court decision in Pramod Kumar Jaiswal v. Bibi Husn Bano MANU/SC/0346/2005 : 2005 (5) SCC 492 has been relied upon by the learned counsel for the landlord where it was held that a lessee who took assignment of the rights of a co-owner lessor cannot successfully raise the plea of determination of tenancy on the ground of merger of his lessee estate in that of the estate of the landlord. It was held in the same decision:

On taking an assignment from some of the co-owner landlords, the interest of the lessee and the lessor in the whole property do not become vested at the same time in one person in the same right. Therefore, a lessee who has taken assignment of the rights of a co-owner lessor cannot successfully raise the plea of determination of tenancy on the ground of merger of his lessee's estate in that of the estate of the landlord. It is, thus, clear that there is no substance in the contention of the learned counsel for the appellants that in the case on hand, it should have been held that the tenancy stood determined and the application of the landlord for a direction to the tenant to deposit the rent in arrears should have been dismissed. The position of the appellants as tenants continues and they are bound to comply with the requirements of the Rent Control Act under which the order for deposit has been passed against them.
Since the revision petitioner has not obtained assignment of the entire rights of the lessor, there could be no merger or determination of the lease under Section 111(d) of the Transfer of Property Act. In the light of what has been stated above, we have no hesitation to hold that there was no determination of the lease since the whole of the estate did not vest in the revision petitioner herein.

8. The learned counsel for the revision petitioner would submit that since the petition schedule building was originally obtained on lease by the father of the revision petitioner from the vendors of the respondent, the respondent should have sought for partition of the petition schedule building, but instead, the respondent has adopted a short cut method for getting possession of the petition schedule building by putting forth a ground under Section 11(4)(ii) of the Act to throw out the tenant cum co-owner who is actually in possession of the property. According to the learned counsel, the equitable considerations which would always lie in favour of the tenant in a case of this nature, also may have to be taken into consideration by the Court while appreciating the facts of the case.

9. It was vehemently argued by the learned counsel for the respondent that the Municipality had initiated action as evidenced by Exts.A-3 and A-5 against the unauthorised act of the revision petitioner. Ext.A-3 is the notice dated 26-12-2007 issued by the Secretary, Vadakara Municipality which is to the effect that the front wooden frame with glass was put up in such a way that it projected towards the front to a distance of one foot. In other words, according to the Municipality, by projecting the front wall/glass frame they have violated the Rule. But the learned counsel for the revision petitioner would submit that Ext.A-3 itself would make it clear that the notice was caused to be sent at the behest of the respondent. Ext. A-5 is another notice dated 2-1-2008 issued pursuant to the same. Ext. A-4 is the notice dated 25-4-2008 which was issued directing the respondent to appear before the Secretary for personal hearing. It is pointed out by the learned counsel for the revision petitioner that Exts. A-3 to A-5 were caused to be issued, that too, only to the respondent since complaint was sent by the respondent. If as a matter of fact, any action was to be taken, there was no reason why no such notice was sent to the revision petitioner, who was in actual possession of the petition schedule building and who actually caused repair of the building. It is further contended that after Ext. A-5, no action whatsoever was taken by the Municipality, with regard to the alleged unauthorised act of the tenant. Ext.A-2 series are the photographs evidently taken just on the previous day of the filing of the RCP. It was after removing few bricks, the glass frames were fitted and thereafter, those portions were restored to the original condition with cement bricks and proper plastering was done by the time the Commissioner inspected the building. It was so reported by the Commissioner. Therefore, except the fact that new window frames with glass were fixed, no other act could be pointed out by the respondent which could be termed as objectionable under Section 11(4)(ii), the learned counsel for the revision petitioner submits.

10. The learned counsel for the respondent has relied upon the decision in Seethalakshmi Ammal v. Nabeesath Beevi MANU/KE/0576/2002 : 2003 (1) KLT 391 in support of his submission that the act complained of in this case was done by the revision petitioner with impunity without even obtaining permission from the respondent, who is admittedly the half owner of the property and in any event, the removal of the old frames, grills, etc. will in no way enhance the value and utility of the building and as such the respondent is entitled to get an order of eviction under Section 11(4)(ii). In the decision cited supra, there was evidence to show that the original roof was dismantled and was substituted by new roof and walls were replaced by new walls, old flooring was also removed and replaced by new flooring, old tiled roof was removed with new asbestos roof and shutters were put replacing the doors. From the evidence it could be found that the building was almost demolished and re-construction was done and it was done against the stiff opposition made by the landlord. Thus, having regard to the material alterations effected by the tenant, it was held that the landlord was justified in thinking that the tenants have transgressed the limits provided under Section 11(4)(ii) of the Act and as such, the order of eviction was granted. That is not the position in this case.

11. The learned counsel for the respondent has very much relied upon the decision in A.K. Ramayyan & another v. K. Rajagopal MANU/KE/0667/2004 : 2004 (2) KLJ 401 also. According to the learned counsel, the facts of the case dealt with therein are identical to the facts of the case on hand. There, the landlord specifically contended that the tenant put up an illegal construction on the front side of the schedule shop room and has effected structural alterations so as to reduce the value and utility of the building materially and permanently. There, evidence was let in by the landlord that the extended portion was erected by the tenant himself. When the tenant therein attempted to erect or put up that portion, a suit was filed praying for an order restraining the tenant from making such constructions, alterations and removing asbestos sheets from the roof of the extended portion. There was evidence in that case to the effect that illegal constructions were made by the tenant. In that case also, the Municipality had initiated proceedings against the unauthorised constructions as in the present case, the landlord points out. The tenant therein did not put forward a case in his objection that his act has actually increased the value of the building. The Court could thus come to a conclusion that the illegal construction effected by the tenant without obtaining permission from the local authority was unjustifiable and so the finding concurrently entered by the two authorities was confirmed. The facts dealt with therein, according to the learned counsel for the revision petitioner, are not so identical as the respondent wanted to contend.

12. The case of the revision petitioner is that, what was removed by the revision petitioner was the wooden frame which was damaged having been eaten by white ants. Except that at the front portion, the old wooden frame was replaced with a new wooden frame with glasses no other action was done by the revision petitioner who is also a co-owner of the petition schedule property. As found earlier, though notices were issued by the Municipality, no further action was taken in the matter evidently because there was no unauthorised construction, the learned counsel for the revision petitioner submits. In view of what is stated above, the aforesaid decision is not applicable to the facts of this case.

13. It is argued by the learned counsel for the revision petitioner that in order to get an order of eviction under Section 11(4)(ii), it should be established that the tenant has committed such acts, as are likely to diminish the quality, strength or value of the building to such an extent that the intrinsic worth or fitness of the building has considerably affected its use for some desirable practical purpose. Shri. B. Krishnan, the learned counsel for the respondent would submit that the impairment of the worth and usefulness or the value and utility of the building has to be judged and determined from the point of view of the landlord and not of the tenant or anyone else, as has been held by the Supreme Court in Gurbachan Singh and another v. Shivalak Rubber Industries and others MANU/SC/0800/1996 : AIR 1996 SC 3057. In Vipin Kumar v. Roshan Lal Anand (1993) 3 JT SC 171 also, the same view was taken by the Apex Court. But minor alterations which will not diminish the value of the building and which is not a permanent character, cannot be said to be alterations which would affect the worth or utility of the building. It is not disputed that some modifications or alterations were done by the revision petitioner. But it is contended that he is the co-owner of the building and the repair effected has only added the value and utility of the building and has also increased the look of the building and it can never be said that there was such a user of the building as to reduce its value and utility materially and permanently so as to entitle the respondent who is only a half owner of the property to eject the revision petitioner who is the co-owner of the building even though at present, he has to be treated as a tenant.

14. The question whether the alleged additions or alterations materially impaired the value or utility of the building in question, is a mixed question of law and fact. The decision in British Motor Car Co. v. Madan Lal Saggi (dead) and another(6) also, according to the revision petitioner has to be distinguished on facts. In that case, there was evidence to show that the sheds constructed by the tenant are of permanent nature which could not be removed without doing damage to the building in question as those sheds were embedded in the floor and also in the side wall, that by constructing the three sheds of almost whole of the courtyard the tenant had not only obstructed the ventilation of the courtyard, but had also reduced the area of the courtyard considerably. The facts of that case are totally inapposite to the facts of this case, since the revision petitioner had not done any such act so as to reduce the value and utility of the building materially or permanently.

15. Shri P. B. Krishnan, learned counsel for the revision petitioner has also relied upon the decision in Waryam Singh v. Baldev Singh(7), wherein it was held that enclosing a verandah by constructing walls and placing a rolling shutter in front did not justify an inference that the value or utility of the building had been impaired, in the absence of evidence to prove that the value and utility had been affected. In Brijendra Nath Rhargava v. Harsh Wardhan(8) it was held by the Apex Court that the construction of a wooden balcony in the showroom did not amount to material alteration. In G Arunachalam v. Thondaperienambi(9) it was held that replacing of wooden plank on the front door of the building or a rolling shutter was not an alteration that caused any damage to the building and as such, it did not provide ground for eviction. It was held in G. Reghunathan v. K. V. Varghese(10) that the words used in Section 11(4)(ii) are disjunctive that the value and utility of the building should be reduced materially and permanently and so the alteration, even if it is material, in order to entitle the landlord to get an eviction, should also be of a permanent character. In that case, the door in the western wall was bricked up, the windows on the northern, western and southern walls were also bricked up, but it was found that the bricked up portions can be removed and the doors and windows restored without weakening the structure. It was also found that the level of the floor was lowered, rafters were cut, two concrete pillars were erected and rolling shutter was fixed. It was found that the lowering of the floor and tampering with the roof was of some significance and they could lead to impairment of the value or utility of the building, materially and permanently. But, it was held that it has to be judged in the light of the surrounding circumstances. It was found that the rolling shutter was fixed to provide more security to the premises. It was held that height of the floor can be restored without impairment to the structure. There the tenant contended that the securing of the premises was essential and it was for that purpose the rolling shutters were fixed and so the value of the building was only enhanced. In the light of the evidence and circumstances which emerged in that case, it was held by the Apex Court in paragraph 14 as follows:

We find that the authorities below have not approached the question from the proper perspective. They have not given sufficient emphasis to the statutory requirement of the effect being material and permanent. It is 'material and permanent'. The words are not disjunctive, like in some other Acts. Here the landlord had not proved the material and permanent impairment in value or utility. One suspects that the value and utility are enhanced. The landlord admits that he will get a higher rent if the room is again let out. We are, therefore, satisfied that interference is justified. We hold that the landlord has failed to prove that the acts of the tenant constitute the user of the building in such a manner as to destroy or reduce the value or utility of the building materially and permanently. We set aside the order for eviction under Section 11(4)(ii) of the Act.
16. Shri P. B. Krishnan, learned counsel for the revision petitioner would submit that so far as the case on hand is concerned, there is yet another factor, that the revision petitioner is also a co-owner of the building. It can never be said that he would do any act which would reduce the value and utility of the building materially and permanently. On the other hand, his intention would only be to make the building more strong and to have a better look for the building. The removal of old and damaged wooden frame and replacing the same with new wooden frame with glass, cannot be an act which would reduce the value and utility of the building materially and permanently. Considering the totality of the facts and circumstances, we hold that the Rent Controller was perfectly justified in declining eviction under Section 11(4)(ii). The learned Appellate Authority went wrong in reversing the order of the Rent Control Court.

In the result, this Revision is allowed. The judgment of the Rent Appellate Authority granting eviction under Section 11(4)(ii) is set aside. Rent Control Petition stands dismissed. Parties are directed to suffer their respective costs.


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