Whether a landlord can seek eviction of a tenant from tenanted premises used for commercial purpose for his residential use?

 It is settled proposition of law that even if the premises has been let out for commercial purposes and are being used as commercial, a petition under section 14(1)(e) of the Act for bonafide need for use as residential is maintainable.

12. It is an admitted position that the property is situated in a residential area though there are several commercial establishments in and around the property. However, the use premises, as specified in the Master Plan for the subject property, is residential.

13. Even though the building may have been put to commercial use for over 40 years, there is no prohibition in law in reconverting the property and putting the same for residential use.

Delhi High Court

Mohd Yusuf vs Mohd Rehan Siddiqui & Ors on 14 January, 2020

 RC.REV. 207/2018
       

CORAM:-
HON'BLE MR JUSTICE SANJEEV SACHDEVA

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Supreme Court: Landlord can seek eviction decree for his residential need or commercial need if tenancy is for composite purpose

In any case and without going into much detail, we are of the view that if the tenancy is for composite purpose because some portion of tenanted premises was being used for residence and some portion for commercial purpose, i.e., residential and commercial, then the landlord will have a right to seek the tenant's eviction from the tenanted premises for his residential need or commercial need, as the case may be.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 1537-1538 of 2019 

Decided On: 07.02.2019

 Deepak Tandon  Vs.  Rajesh Kumar Gupta

Hon'ble Judges/Coram:

Abhay Manohar Sapre and Dinesh Maheshwari, JJ.

Citation: 2019(1) RCR(Rent) 2785 SC

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Basic principles for determining whether an activity or transaction is for a commercial purpose

To summarize from the above discussion, though a straight-jacket formula cannot be adopted in every case, the following broad principles can be culled out for determining whether an activity or transaction is 'for a commercial purpose':

(i) The question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, 'commercial purpose' is understood to include manufacturing/industrial activity or business-to-business transactions between commercial entities.

(ii) The purchase of the good or service should have a close and direct nexus with a profit-generating activity.

(iii) The identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary.

(iv) If it is found that the dominant purpose behind purchasing the good or service was for the personal use and consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any commercial activity, the question of whether such a purchase was for the purpose of 'generating livelihood by means of self-employment' need not be looked into.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 12322 of 2016

Decided On: 14.11.2019

 Lilavati Kirtilal Mehta Medical Trust  Vs.  Unique Shanti Developers and Ors.

Hon'ble Judges/Coram:

Mohan M. Shantanagoudar and Ajay Rastogi, JJ.

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Whether residential premises can be given to landlord for commercial use?

 The respondent sought possession of the premises let out to the appellants and three other tenants on the ground that it wanted one room for its office, two rooms for running a fair-price grain-shop, two rooms for conducting a provision stores, two rooms for preparing pickles, cleaning spices and for keeping the finished products for sale, two rooms for establishing a godown and some more space for conducting a tailoring and sewing class. The respondent succeeded in proving its requirement but its very success in establishing that it required the premises for a non-residential purpose is its failure to establish the ingredients of Section 13(1)(g) of the Act. Under that provision, it is not sufficient for a landlord to establish that the premises are required by him but it has to be shown further that the requirement is reasonable and bona fide. The requirement of the respondent in the instant case cannot ever be called reasonable, if the very statute under which it seeks relief contains an injunction that it shall not use residential premises for a non-residential purpose. Not only does the statute contain and injunction against the user of residential premises for a non-residential purpose, but it makes it penal for a landlord to use for a non-residential purpose any premises which were used for a residential purpose on the date when the Act came into force. In the light of Section 25(1), granting a decree to the respondent for possession of the residential premises on the ground that it requires those premises for a non-residential purpose is to pave the way for its prosecution and punishment under Section 25(2). In fact, such a decree would be self-defeating because, whereas the decree shall have been passed on the ground that the respondent requires the premises for a non-residential purpose, it will not be able to use those premises for the purpose for which the decree was granted, save on pain of prosecution.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 574 and 575 of 1974

Decided On: 26.08.1975

 Bapubhai Mohanbhai Vs. Mahila Sahakari Udyog Mandir

Citation: AIR 1975 SC 2128

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Whether landlord can seek eviction of tenant from residential premises if he requires it for non-residential purpose?

Besides the abovesaid subsequent development, there is another vital matter which has been overlooked by the lower Court, inasmuch as, admittedly, the suit premises were let out to the original tenant (predecessor of the petitioner) for residential purpose and were/are being used as such, but the respondent No. 1 landlord has invoked the ground of bona fide requirement for starting business in the suit premises. Section 25 of the Act clearly prohibits conversion of residential into non-residential premises. In view of this prohibition it is not open for the respondent No. 1 to use the suit premises for any other use but residential purpose. Understood thus, the ground of bona fide pressed by the respondent No. 1 is therefore unavailable in law.

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 4423 of 1989

Decided On: 05.07.2001

Avinash V. Mhapankar  Vs.  Prabhakar S. Kelkar and Ors.

Hon'ble Judges/Coram:

A.M. Khanwilkar, J.

Citation: 2001(4) MHLJ 220,2001(4) BOM CR708

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When tenant is liable to be evicted on ground of change of user from residential to commercial?

 I have carefully considered the pleadings, oral evidence and the documentary evidence Exhibit 58. I have also considered the findings recorded by the first appellate Court. It appears that the first appellate Court was weighed with the part of the evidence showing description of the property and therefore, reached a conclusion that the property must have been used for business purposes. The fact remains that the first appellate Court did not refer to the exchange of notices amongst the parties, did not care to find out from the pleadings of the parties the purpose of letting the suit property. In my view, the judgment and order passed by the first appellate Court requires to be quashed and set aside. I am of the opinion that the totality of the pleadings and evidence on record shows that the property was not let out for duel purposes i.e. residential and business.

IN THE HIGH COURT OF BOMBAY (AURANGABAD BENCH)

Writ Petition No. 981 of 2001 and Civil Application No. 6621 of 2005

Decided On: 11.01.2010

Gopalkrishna Ganpat Gulve  Vs.Shobhachand Raychand Firodiya

Hon'ble Judges/Coram:

S.B. Deshmukh, J.

Citation: 2010 (2 ) ALLMR 69

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Whether tenancy created for commercial purpose can be terminated on ground of availability of alternative accommodation?

It would be noticed that as soon as it is found that the premises in question have been used by respondent 1 incidentally for professional purposes and it is further established that this use is made with the consent of the landlord then the case goes outside the purview of s. 13(1)(e) altogether. In the present case it has been found by the appellate Court and the High Court that right from the commencement of the tenancy a substantial part of the premises is used by respondent 1 for his professional purpose, and they have also found that this has been done obviously with the consent of the landlord. It is unnecessary to refer to the evidence on which this finding is based. Even the trial Court was apparently inclined to take the same view about this evidence but it did not fully appreciate the effect of the explanation; otherwise it would have realised that the professional use of a substantial part of the premises with the consent of the appellant clearly takes the case outside s. 13(1)(e). In other words, where premises are let for residential purposes and it is shown that they are used by the tenant incidentally for commercial, professional or other purposes with the consent of the landlord the landlord would not be entitled to eject the tenant even if he proves that he needs the premises bona fide for his personal use because the premises have by their user ceased to be premises let for residential purposes alone. This position cannot be seriously disputed.

Supreme Court of India

Dr. Gopal Dass Verma vs Dr. S. K. Bhardwaj And Another on 2 May, 1961

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