Sunday, 17 March 2019

Whether court can dispense with consent of landlord for renewal of trade licence for business to be carried on by tenant?

On the above legal issue, we may benefit by referring to the pronouncement in Sudhakaran v. Corporation of Trivandrum reported in [(2016) 14 SCC 263] where the Supreme Court on the issue of the renewal of a trade licence, stated that a tenant cannot be deprived of running a lawful business merely because the landlord withheld his consent, and further that, a valid tenancy itself has implied authority of the landlord for legitimate use of the premises by the tenant.
9. In the above case itself, the Supreme Court quoted with approval the ratio laid down by this Court in Marimuthu v. Director General of Police [1999 (3) KLT 662] where the following was recorded:—
“…………………………………………………………………………………………
16. A statutory tenant under the Kerala Buildings (Lease and Rent Control) Act can be evicted only as per the provisions of the said Act, on the grounds enumerated therein. Since the possession of the tenant is lawful, the landlord is not entitled to withhold his consent for the conduct of the business for which the premises were given on rent. In the instant case, we are satisfied that the landlord is purposefully and with malafide intention withholding consent inspite of the directions from this court. Under such circumstances, the Corporation also cannot insist upon production of written consent from the landlord for the purpose of issuance of licence for the conduct of business in the premises in question. For carrying on business in readymade dresses a licence issued under Sec.492 of the Kerala Municipality Act is necessary. As on date, the petitioner is not having any licence to carry on such business. A person in occupation can be allowed to carry on a trade or business which requires a licence, only after obtaining such licence. In view of the facts and circumstances of the case as above, we direct the Corporation of Thiruvananthapuram to consider Ext.P7 application for licence without insisting upon the production of a written consent of the owner of the premises and pass appropriate orders after giving an opportunity to the petitioners or their representative or their advocate, within two weeks from today. The petitioners are at liberty to file any further documents, if need be, before the Corporation authorities. The Corporation shall pass a reasoned order after hearing the necessary parties and communicate the same to the petitioners within two weeks from today. We make it clear that till such time the petitioners shall not conduct the textile business in the premises in question. Ext.P8 order of the Corporation of Thiruvananthapuram is set aside and Ext.P7 is restored to file for fresh consideration as directed above.”
………………………………………………………………………………………….”
10. In the facts of the present case what would have a bearing is that in the judgment of the Supreme Court, the necessity for dispensing with the requirement of providing consent from the landlord for considering the renewal of the trade licence in a situation where the relationship between the landlord and tenant are strained, was held to be applicable both in a situation where fresh application is applied or it is a case of renewal of a trade licence that is applied by the tenant. Therefore the direction to this effect issued in the impugned verdict would merit our approval.

In the High Court of Kerala at Ernakulam
(Before Hrishikesh Roy, C.J. and A.K. Jayasankaran Nambiar, J.)
W.A. No. 2426 of 2018

C.S. Babu  v.  C. Vijayan @ Raghavan,

Decided on December 14, 2018
Citation: 2018 SCC OnLine Ker 5783

The Judgment of the Court was delivered by
Hrishikesh Roy, C.J.:— Heard Sri. K.P. Dandapani, the learned Senior counsel appearing for the appellant (landlord) in both these cases. Also heard Sri. Santhosh Poduval, the learned counsel appearing for the Municipal Corporation of Thrissur. The respondent writ petitioner is represented by the learned Senior counsel Sri. N. Nandakumara Menon. For the sake of convenience the references in this judgment are from the records of W.A. No. 2426/2018.
2. These Writ Appeals arise out of the common judgment dated 13.11.2018 in the W.P. (C) No. 20554 of 2018 and the W.P. (C) No. 31220 of 2018, which were respectively filed by the partnership firm M/s. Vijaya Jyothi Traders and its Managing Partner Sri. C. Vijayan @ Raghavan. The cases primarily related to the non-consideration of the application for a D & O (Dangerous & Offensive) licence applied by the petitioner. The Thrissur Municipal Corporation, however took the stand that the application cannot be considered in the absence of a consent from the landlord as is mandated by sub-sections (3) and (4) of Section 492 of the Kerala Municipality Act, 1994 (hereinafter referred to as ‘the Municipal Act’).
3. The basic contention of the petitioner is that there is a dispute between the landlord and the tenant, and therefore, obtaining a consent letter from the landlord must not be insisted, for consideration of the renewal of the licence.
4. The learned Single Judge after due consideration of the matter as also the Civil Suits pending between the landlord and the tenant and the Municipal Corporation, issued direction to the Corporation to consider the application dated 24.10.2018 (Ext.P12) submitted by the petitioners for renewal of licence, without insisting for consent from the landlord. Opportunity of hearing to the petitioner and the landlord while considering the said application was also ordered in the impugned judgment.
5. Assailing the legality of the said direction, the learned Senior counsel Sri. K.P. Dandapani representing the landlord would project that whenever an application is filed to obtain a licence for the first time, the production of the written consent of the owner of the premises along with the application is mandatory under Section 492(3) of the Municipal Act. He submits that in the instant case, the recognized tenant was the partnership firm M/s. Vijaya Jyothi Traders and since there was dissolution of partnership, the application filed by the Managing Partner could not have been considered either for fresh licence or for renewal of licence, without the written consent of the landlord as is mandated under Section 492(4) of the Municipal Act.
6. On the above aspect, it is important to note that the Ext.P12 application was not filed in the individual capacity by any of the 4 partners of the firm but it was an application preferred by the Managing Partner C. Vijayan @ Raghavan. Admittedly the partnership firm was the recognized tenant under the landlord, and therefore, they enjoy statutory protection in such matters.
7. In the above circumstances, it is not possible for us to support any requirement of obtaining a consent letter from the landlord, in order to process the writ petitioner's application for renewal of trade licence especially taking note of the strained relationship now prevailing between the landlord and the tenant.
8. On the above legal issue, we may benefit by referring to the pronouncement in Sudhakaran v. Corporation of Trivandrum reported in [(2016) 14 SCC 263] where the Supreme Court on the issue of the renewal of a trade licence, stated that a tenant cannot be deprived of running a lawful business merely because the landlord withheld his consent, and further that, a valid tenancy itself has implied authority of the landlord for legitimate use of the premises by the tenant.
9. In the above case itself, the Supreme Court quoted with approval the ratio laid down by this Court in Marimuthu v. Director General of Police [1999 (3) KLT 662] where the following was recorded:—
“…………………………………………………………………………………………
16. A statutory tenant under the Kerala Buildings (Lease and Rent Control) Act can be evicted only as per the provisions of the said Act, on the grounds enumerated therein. Since the possession of the tenant is lawful, the landlord is not entitled to withhold his consent for the conduct of the business for which the premises were given on rent. In the instant case, we are satisfied that the landlord is purposefully and with malafide intention withholding consent inspite of the directions from this court. Under such circumstances, the Corporation also cannot insist upon production of written consent from the landlord for the purpose of issuance of licence for the conduct of business in the premises in question. For carrying on business in readymade dresses a licence issued under Sec.492 of the Kerala Municipality Act is necessary. As on date, the petitioner is not having any licence to carry on such business. A person in occupation can be allowed to carry on a trade or business which requires a licence, only after obtaining such licence. In view of the facts and circumstances of the case as above, we direct the Corporation of Thiruvananthapuram to consider Ext.P7 application for licence without insisting upon the production of a written consent of the owner of the premises and pass appropriate orders after giving an opportunity to the petitioners or their representative or their advocate, within two weeks from today. The petitioners are at liberty to file any further documents, if need be, before the Corporation authorities. The Corporation shall pass a reasoned order after hearing the necessary parties and communicate the same to the petitioners within two weeks from today. We make it clear that till such time the petitioners shall not conduct the textile business in the premises in question. Ext.P8 order of the Corporation of Thiruvananthapuram is set aside and Ext.P7 is restored to file for fresh consideration as directed above.”
………………………………………………………………………………………….”
10. In the facts of the present case what would have a bearing is that in the judgment of the Supreme Court, the necessity for dispensing with the requirement of providing consent from the landlord for considering the renewal of the trade licence in a situation where the relationship between the landlord and tenant are strained, was held to be applicable both in a situation where fresh application is applied or it is a case of renewal of a trade licence that is applied by the tenant. Therefore the direction to this effect issued in the impugned verdict would merit our approval.
11. Insofar as the apprehension expressed by the learned Senior counsel for the appellant about the legitimacy to the tenancy being obtained through the granting of the trade licence, the learned Single Judge as can be seen had made it clear in the impugned judgment that if any proceedings are initiated by the landlord to evict the tenant from the premises in question, the finding and directions contained in the impugned judgment would not have any bearing in any such proceeding. This would adequately safeguard the interest of the landlord in the event he is to proceed against the tenant for eviction or for any other reason.
12. In view of the forgoing discussion, we uphold the impugned judgment. The Writ Appeals are found devoid of merit and the same are dismissed.
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