# 1 7 I BAI CHANCHAL & ORS v. SYED JALALUDDIN & ORS - **Citation:** [1971] 2 S.C.R. 171 - **Court:** Supreme Court of India - **Decided:** 1970-09-11 - **Case number:** Civil Appeal No. 1460 of 1969 - **Bench:** J.C. Shah, V. 'Bhargava - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1-7-i-bai-chanchal-ors-v-syed-jalaluddin-ors-5309 - **Pages:** 7 ## Headnote Bmnhay Rent Restriction Act (16 of 1939), s. 4(2)(b)-Lease of land.givi11R h'ssee right to build houses and let out--Wliether 'pren1h:es', Code of Civil Procedure Act (5 of 1908), 0. 12, r. 6, 0. 23, I'. 3l'a.\\inJ: 111ore than one decree in the stune szdt-Legality. The prcJcccssors in interest of th~ respondents, lcascJ certain land at an annual rent of Rs. 199, in l895 for 49 years. Tho lease was a permissivt! one and gave fight to the lc:;sccs to construct houses and let them out or to U'iC the lan from the dates of the respective decrees and they had also to pav monthly mesne profits which worked out to more than Rs. 7.000 par annum, and that amount was so fixed that the mesne profits due for the 5 years y.,·ere to be paid in 3 years. There was also a .clause that in case of default, the defaulting judgment-debtors could be immediately called upon to deliver possession. In 1953, the respondents sought possession by· executing the consent decree dated 8th July 1946. On the questions: (1) Whether the decree contravened the provi::-t•·", _,,f the .flombay Rent Restriction Act. 1939, as the leased land was 'premises' within the meaning of s. 4(2)(b) of that Act; (2) whether the consent decree created a new tenancy which was protected by the Bombay .Rents, Hotel and Lodging House Rates Control Act, 1947; and (3) whether the passing of two separate decrees was illegal as the court was not competent to do so. HELD: (I) 'Premises' is defined in s. 4(2}(b) as any land let separately for the purpose of being used principally for busin<"ss or trade. The words 'business or trade' do not comprehend a lease which is merely for constructing houses. Th~ terms of the lease, in the present case, do not establish that the lease was taken· principally for using the land for 'business or trade.' [174 C-D; 175 G-Hl The mere fact that there was a mention in the pleadings that any structure that might have been erected would have to be removed, would in no way. lead to the conclusion that the principal purpose of. t~e lease was to build structures and that the structures should be utilised !or being let out on re"t and thus constitute business or trade. Therefor.e tl1e decree did not contravene the provisions of the Bombay Rent Restnct;on Act. T174 F-0; 115 D-E; 176 Al 172 SUPR:EME COURT REPORTS [1971]2 S.C.R. (2) On the face of it, all that the consent decree envisaged was that though the judgment-debtors were liable to immediate eviction, the decree holders aglreed to let them continue in possession for a period of 5 years, and. since the concession was granted as a special case, the decree~holders insisted on payment of mesn~ profits at a ~uch higher rate. :rhe terms of the consent decree could tn no way be interpreted as creating a new tenancy constituting the decree-holders as landlords and the judgmentdebtors as their tenants. [176 C-E, F-G] 13) Order 23, r. 3 and 0. 12, r. 6 of the Civil Procedure Code envisage that in the same 01Jit there can· be more than one decree passed at different stages [177 D-F] ## Text A B c D E r G 1 7 I BAI CHANCHAL & ORS. v. SYED JALALUDDIN & ORS. September 11, 1970 [J.C. SHAH AND V. 'BHARGAVA, JJ.] Bmnhay Rent Restriction Act (16 of 1939), s. 4(2)(b)-Lease of land.givi11R h'ssee right to build houses and let out--Wliether 'pren1h:es', Code of Civil Procedure Act (5 of 1908), 0. 12, r. 6, 0. 23, I'. 3l'a.\\inJ: 111ore than one decree in the stune szdt-Legality. The prcJcccssors in interest of th~ respondents, lcascJ certain land at an annual rent of Rs. 199, in l895 for 49 years. Tho lease was a permissivt! one and gave fight to the lc:;sccs to construct houses and let them out or to U'iC the lan from the dates of the respective decrees and they had also to pav monthly mesne profits which worked out to more than Rs. 7.000 par annum, and that amount was so fixed that the mesne profits due for the 5 years y.,·ere to be paid in 3 years. There was also a .clause that in case of default, the defaulting judgment-debtors could be immediately called upon to deliver possession. In 1953, the respondents sought possession by· executing the consent decree dated 8th July 1946. On the questions: (1) Whether the decree contravened the provi::-t•·", _,,f the .flombay Rent Restriction Act. 1939, as the leased land was 'premises' within the meaning of s. 4(2)(b) of that Act; (2) whether the consent decree created a new tenancy which was protected by the Bombay .Rents, Hotel and Lodging House Rates Control Act, 1947; and (3) whether the passing of two separate decrees was illegal as the court was not competent to do so. HELD: (I) 'Premises' is defined in s. 4(2}(b) as any land let separately for the purpose of being used principally for busin<"ss or trade. The words 'business or trade' do not comprehend a lease which is merely for constructing houses. Th~ terms of the lease, in the present case, do not establish that the lease was taken· principally for using the land for 'business or trade.' [174 C-D; 175 G-Hl The mere fact that there was a mention in the pleadings that any structure that might have been erected would have to be removed, would in no way. lead to the conclusion that the principal purpose of. t~e lease was to build structures and that the structures should be utilised !or being let out on re"t and thus constitute business or trade. Therefor.e tl1e decree did not contravene the provisions of the Bombay Rent Restnct;on Act. T174 F-0; 115 D-E; 176 Al 172 SUPR:EME COURT REPORTS [1971]2 S.C.R. (2) On the face of it, all that the consent decree envisaged was that though the judgment-debtors were liable to immediate eviction, the decree holders aglreed to let them continue in possession for a period of 5 years, and. since the concession was granted as a special case, the decree~holders insisted on payment of mesn~ profits at a ~uch higher rate. :rhe terms of the consent decree could tn no way be interpreted as creating a new tenancy constituting the decree-holders as landlords and the judgmentdebtors as their tenants. [176 C-E, F-G] 13) Order 23, r. 3 and 0. 12, r. 6 of the Civil Procedure Code envisage that in the same 01Jit there can· be more than one decree passed at different stages [177 D-F] CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1460 of 1969. Appeal by special leave from the judgment and decree dated January 16, 1969 of the Gujarat High Court in '.etters Patent Appeal No. 31 of 1966. S. T. Desai, M. H. Chhatrapati, P. N. Tiwari and 0. C. Mathur, for the appellants. D .. v. Patel and I. N. Shroff, for respondents Nos. 1 and 3. R. H. Dhebar, B. Datta and S. P. Nayar, for respondent No. 2. The Judgment of the Court was delivered by Uhar.gava, J. The predecessors-in-interest of plaintiff-respondents 1 to 3 gave, in 1895, land, bearing Serial Nos. 503 and 506 of Asarva within the limits of Ahmedabad Municipal Corporation. on lease for a period of 49 years at an annual rent of Rs. 199/-, to three persons, Shri Ramchandra Ambaram, Pan;lesi Sulilila! Anandram and Mehta Bogha Mugatram. These original lessees, during the currency of the lease, made transfers of their. rights and also granted sub-leases. A number of chawls and some other buildings were constructed 011 the land and some of them were let out on rent. In 1945, the lessors, after serving notice on the occupants .to give vacant possession, filed a suit for recovery of possession. The suit was decreed on 8th July, 1946 on the basis of a consent decree as against some of the occupants including the four defendant-appellants. In the agreement, on the basis of which the decree was passed, jt was agreed that the defendantappellants will continue in possession of the property for a period of five years and will hand over possession after the expiry of this pe:iod of five years. For this period, they undertook to pay mesnc profits every month at various rates on the lands in their possession. Between them, the four appellants were required to ,pay @ Rs. 227-10-Q per mensem making up an annual amount of mesne profits of Rs. 2, 731-8-0. Similar terms were included .... A n c D E F G H A B c D F G ll BAI CHANCHAL v. JALALUDDIN (Bhargava, J.) 17 3 in the consent decree against other defendants who joined the Compromise on the basis of which the decree was passed on 8th July, 1946. The remaining defendants in the suit entered into a later compromise and, as a result, another consent decree w~as passed on 28th January, 1949 against those defendants. Under this decree, these remaining defendants were also entitled to continue in possession for a period of five years from the date of the decree, but were required to pay mesne profits for this period. All the defendants governed by the two decrees dated 8th July, 1946 and 28th January, 1949, had to pay between them mesne profits monthly which worked out to an amount of Rs. 7,314-8-0 per annum. Before the expiry of the period of five years prescribed by either of the two decrees, the Custodian of Evacuee Property, in 1950, took possession of all the properties, as one of the decreeholders had become an evacuee. After the property was released by the Custodian of Evacuee Property, an application was filed by the decree-holders on 26th March, 1953 for execution of the con, sent decre.e dated 8th July, 1946 and, in that execution, possession was sought against the appellants of the property which was in their possession. Subsequently, a num~er of suits were filed for recovery of mesne profits also. The Exeq1tion Co4rt directed eviction of the appellants after over-ruling the various objections raised by them in the execution proceedings. The decision of the Execution Court on the objections taken by the appellants was cl!allenged in appeal before the District Judge, in second appeal before a single Judge of the High Court of Gujarat, and by a Letters Patent appeal before a Division Bench. All the Courts rejected the objections raised by the appellants and upheld the order of the Execution Court directing delivery of possession. It is against the judgment of the Division Bench in Letters Patent appeal in this execution that the appellants have come up to this Court in this appeal by special leave. It is unnecessary for us to mention all the various objections that 'were taken at various stages by the appellants in the Execution Court, in the Court of the District Judge, or before the single Judge or the Division Bench in the High Court. Only three of the points raised have been urged before us and, therefore, we are called upon to deal with'these three points only. The first point raised is that the decree which was passed on 8th July, 1946 was a nuUity, because it was passed in contravention of seetion 11 (I) of the Bombay Rent Restriction Act No. XVl of 1939 (hereinafter referred to as "the Act"). This objection has been over-ruled by the High Court on the ground that the pro• visions of the Act were not attracted by the lease in question on the expiry of which the suit for ejectment was decreed under the. 174 SUPREME COURT REPORTS [1971] 2 S.C.R. consent decree date& 8th July, 1946. Counsel appearing for the appellants urged that the terms of the decree passed as well.as the terms contained in the lease-deed of 1895 show that the Act was applicable because the land, to which the suit for ejectment related, was covered by the definition of "'premises'.' to which the ~ct applies.. Th.e expression "premises" is defined in section 4 (2) of the Act as meaning- ' (a) ?"ny building or part of a building-let seprir~tely for any ·purpo$e whatever, including any land let therewith, or· (b) any land let separately for the purpose of being ·used principally for business or ·trade. Admittedly, the lease of 1895 was-n~t)n respect of any building or part of a building let separntely for any ·purpose whatever Reliance was placed on section 4(2)'(b) cf the Act on the contention that the land had been let for the purpqse of being· med principally for busine:;s or trade. Having gone through the doc~1- ·ments ~elied l)pon by' counsel for the appellants, we are ~1nable ·to accept this submission .. In the plaint of the suit, as well as in the decree .dated 8th July, 1946, there is no mention of th~ purpose for which the land was let out by the lea:;e of 1895. Rcl~ancc was, 'however, placed on .one of th,e pleadings in thi: plaint whjch had been reproduced in the decree in which the plaintiff-respondents recited one of the terms of the Lease in the folkm·- ing words:- "Oi1 the expiry of the period of 49 year!i, the land shall be handed over without raisin'g any dispute or .objection or causing any obstruction1 after remov:ng :whatever structures that might have been erc:ted thereon and aft.'!r making it as-tlear as it is." The argument was that this pleading indicates that tha land was Jet out for making stfuctures and those structures could only be ntilised .by being Jet out on rent. This purpose would constitute business or trade. We are unable to see any justification for such c F an inference. The mere fact that there was a mention that struc· G tures that might have been :erected will be removed can in no·way lead to a reasonable cCncJ'Usion tqat the principal purpose bf the lease was the use of the land for bu!iiQ~r trade. Reference, in this connection, was also made to the terms of the lease of 1895; but we are unable to liold that it establishes the c~i'se of the appellants that the lease }\'as taken principally· for the H purpose of using the land for busine1~ or trade. All. that the ]ease mentions is that it is for constructin!~hduses and, at a later stage, BAI CHANCHAL v_. JALALUDDIN (Bhargava, J.) 17 s A there is a menti0n that "in the said fields, the lessees could construct houses in any manner or use it in any manner." The other parts of the lease, on which reliance has been placed are 8-5 follows:- "l. On the land of those fields we can build houses in any manner and we will receive ii:come t):iereof- and you will not raise any dispute or obstruction in respect thereof. We can spend any amouni on_ the construction of those· houses which we will not demand from you for whatever reason nor we will have the right to" deduct· frotn rent payable to you. c 2. If. any houses are consfructed thereon, we will remove the super-structures. ff we do not 'remove the structures then you· will -be·the owners of the said structures. If .. you ·take them, then we and our heirs and representatives will not object." D E F G H . ' We are unable to find even in these quotations.frc:>m the lease any mention that the land .is going .to· be used ,prihcipally for the pur· pose of business or trade: · 1'he le.a~e· does m.~n!ion · that it . was being.taken for constructing-houses. ~There was no·Ijlentibn,_ at an, however, of the ·manner in which the constructed houses were to be utilised. Further, there is a clear option given ·ip the le>sees that they could. use the l::ind in any manner if tlley did not construct any houses._ Theoe are terms on the basis of -which it cannot. be" said that !'lie··1and 'iv_as. being let out ·for busniess purposes. - The submission o{ counsel for the appellants was that, if the purpo,;e was· to construct ho4ses and let them out on rent, that would constitute the use of" the land for the purpose of business ii!asmnch as the lessees would be _earning income from letting out those houses. We are unable to accept this submission, bec_a1,l6e' 'we do not think that the word "business' or "trade" used in the definition ·of "premises" in section 4 (2) (b) oI the Act comprehends within it a -lease which is merely for constructiμg houses. Learned counsel Cited before us a. number of decisions of Indian and English Cou.ris, including dedsions of the frivy Council- a11d this Court, in wjiich the' scope of ti)e word "business" was interpTeted. That interpretation was given inconnection with the word "business'· as used either- in income:tax law or· in the terms of a covenant or the Companies Act, etc. We do not -consider that it wi!l be at all profitable to refer to them when interpreting the word "business" or "trade" _as used in section 4(2) (b) of the Act, because none of those interpretations will cover a case similar to the one before us,- where the lease was merely a permissive one giving a right to the lessees to construet houses and let them outr or to use the land in any manner. When the purpose of the lease 176 SUPREME COURT REPORTS [l 971] 2 S.C.R. was expressed _in this way, it is impossible to hold that the princiA pal use, to which the land was to be put by the lessees, was business or trade. As a consequence of this interpretation it has to be held that the Act was not applicable to the lease of i895 and there~ore, no question arises of the decree of 8th July, 1946 being mvahd on the ground of contravening section 11 ( 1) of the Act. The second point urged by learned counsel was that, by the consent decree itself, a new tenancy was created which was to continue for five , years and, in the meantime, the Bombay Rents Hotel & Lodging House Rates Control Act, 194 7 came into force and the appellants were protected from ejectment under the provisions of that Act. The consent decree does not state that a new tenancy is being created. The argument was that the terms of that consent decree should be interpreted as indicating an intention to create a new tenancy. We are unable to fin" any such terms. On the face of it, all that the consent decree envisaged was that, though the judgment-debtors were liable to immediate eviction, the decree-holders agreed to let them continue in p0ssession for a period of five years. Since this. concession was being granted as a special case, the decree-holdt:rs insisted that mesne profits should be paid at a much higher rate so much so that between all the defendants, governed by the two decrees of 8th July, 1946 and 28th January, 1949, the amount payable as mesne profits became Rs. 7,314-8-