# DW ARKA PRASAD v. DWARKA DAS SARAF

- **Citation:** [1976] 1 S.C.R. 277
- **Court:** Supreme Court of India
- **Decided:** 1975-08-11
- **Bench:** A. N. Ray, K. K. Mathew, V. R. KRISHi'IA IYER Ai'ID S. M. F, AZAL Au
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/dw-arka-prasad-v-dwarka-das-saraf-6498
- **Pages:** 14

## Headnote

U.P. (Te1nporary) Con~rol of Re11t and E1·iction Act, 1947 s. 2(a)-Scope of
-Tc1t ro detcnnine what is acco1nmodation whete the lease is coniposite.
!nterpretation--Proviso-How cou.'·d be read
The term "accommodation" !s defined bys. 2(a) of the U.P.
(l"'emporaty)
Control of Rent and Eviction Act, 1947 to mean residential and non·residentir,1
accommodation in any building or part of a building and includes, among others.
any furniture supplied by the landlord for use '.n such building or part of a build·
ing and any fittings affixed to such building or part of a building for the more
beneficial enjoyment thereof. A proviso was added to clause (a) by the Amending Act XVII of 1954 which says "but does not include any acco1n1nodation used
as a factory or for an industrial purpose 'vhere the business carried on in or upon
a building is also leased out to the lessee by the sam-e transaction."
The respondent took on lease the cinema theatre of \Vhich the appellant was
the ow.oer.
The lease deed provided a rent of Rs. 400 p.m. for the building
sin1pliciter and Rs. 1000 for the projector, fittings, fans and other fixtures. The
suit for ev'..ction filed by the appellant was dismissed by the trial court hc•lding
that the suit property was not accommodation"' within the meaning of the .-\ct.
The High Court upheld the view of the trial court.
On appeal to this Court it w<ls contended that the dominant purpose or real
subject of the lease was the cinema apparatus and fittings, including subsidiarily
and incidentally the building.
Allowing the appeal,
liELD : The lease sued on does not fall within the scope of accommodation.
The appellant is entitled to a decree of eviction.
[2.90B]
(1) (a) The lease of an accommodation must essentially be of a buildingnot ai business or industry together with the building in which it is situa:ed.
[282B-C]
(b) Where the lease is composite and has a plurality of purpos~s, the decisive
test is the dominant purpose of the demise. The additions such as
gartlcns, ·
grounds and out-houses, if any, appurtenant to such building, any furniture supplied by the landlord fQr the use in such building, electrical fittings, sanitary fittings, and so on, arc subservient and beneficial to the build'.ng itself. They make
occupation of the building more convenient and pleasant when
the
principal
thing demised is the building and the additions are auxiliary.
The furniture and
fittings \'isualised in the concept of building are calculated to improve the beneficial enjoyment of the premises Ieas·~d.
[282D-E]
(c) The legisl<1.t'.ve policy is to control rents and evictions of buildings, rackrenting and profiteering by indiscriminate eviction from
buildings,
residential
and non-residential. The law sought to rescue exploited tenants Df bu~ldings. It
is, therefore, fair to hold that the protected category of accommodation \Vas re~i
dential and non-residential buildings and not bU'siness houses.
[283A-B]
(d) It would be a travesty of language to speak of a lease of a building ·when
what is substantially made over is a business or industrial plant. If a bu"iness
were the subject matter of the lease, the prominent thing will be not what houses
the business but the business itself. The building becomes secondary since eYery
278
SUPREME COURT REPORTS
(1976) 1 S.C.R.
business or industry has to be accomn1odated in some ~ndosure or building. In
A
all such cases the lessor makes over possession of the bu!lding as part <ind parcel
of the transfer of possession of the business.
[283E-F]
In the instant case a consoectus of factors settles the issue in favour of the
landlord that the real intentiori of the parties to the lease was to demi<;e primarily
the cinema equipment and secondarily the build~.ng, the lease itself being a composite one.
[2848-C]
(2) If on a fair construction, the principal provision is clear, a proviso cannot expand or lirnit it.
Somet'.m.es a proviso is
engrafted by
an
apprehensive
draftsman to ren19ve possible doubts, t

## Text

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D
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DW ARKA PRASAD
v.
DWARKA DAS SARAF
August 11, 1975
277
[A. N. RAY, C.J., K. K. MATHEW, V. R. KRISHi'IA IYER Ai'ID
S. M. F,AZAL Au, JJ.]
U.P. (Te1nporary) Con~rol of Re11t and E1·iction Act, 1947 s. 2(a)-Scope of
-Tc1t ro detcnnine what is acco1nmodation whete the lease is coniposite.
!nterpretation--Proviso-How cou.'·d be read
The term "accommodation" !s defined bys. 2(a) of the U.P.
(l"'emporaty)
Control of Rent and Eviction Act, 1947 to mean residential and non·residentir,1
accommodation in any building or part of a building and includes, among others.
any furniture supplied by the landlord for use '.n such building or part of a build·
ing and any fittings affixed to such building or part of a building for the more
beneficial enjoyment thereof. A proviso was added to clause (a) by the Amending Act XVII of 1954 which says "but does not include any acco1n1nodation used
as a factory or for an industrial purpose 'vhere the business carried on in or upon
a building is also leased out to the lessee by the sam-e transaction."
The respondent took on lease the cinema theatre of \Vhich the appellant was
the ow.oer.
The lease deed provided a rent of Rs. 400 p.m. for the building
sin1pliciter and Rs. 1000 for the projector, fittings, fans and other fixtures. The
suit for ev'..ction filed by the appellant was dismissed by the trial court hc•lding
that the suit property was not accommodation"' within the meaning of the .-\ct.
The High Court upheld the view of the trial court.
On appeal to this Court it w<ls contended that the dominant purpose or real
subject of the lease was the cinema apparatus and fittings, including subsidiarily
and incidentally the building.
Allowing the appeal,
liELD : The lease sued on does not fall within the scope of accommodation.
The appellant is entitled to a decree of eviction.
[2.90B]
(1) (a) The lease of an accommodation must essentially be of a buildingnot ai business or industry together with the building in which it is situa:ed.
[282B-C]
(b) Where the lease is composite and has a plurality of purpos~s, the decisive
test is the dominant purpose of the demise. The additions such as
gartlcns, ·
grounds and out-houses, if any, appurtenant to such building, any furniture supplied by the landlord fQr the use in such building, electrical fittings, sanitary fittings, and so on, arc subservient and beneficial to the build'.ng itself. They make
occupation of the building more convenient and pleasant when
the
principal
thing demised is the building and the additions are auxiliary.
The furniture and
fittings \'isualised in the concept of building are calculated to improve the beneficial enjoyment of the premises Ieas·~d.
[282D-E]
(c) The legisl<1.t'.ve policy is to control rents and evictions of buildings, rackrenting and profiteering by indiscriminate eviction from
buildings,
residential
and non-residential. The law sought to rescue exploited tenants Df bu~ldings. It
is, therefore, fair to hold that the protected category of accommodation \Vas re~i
dential and non-residential buildings and not bU'siness houses.
[283A-B]
(d) It would be a travesty of language to speak of a lease of a building ·when
what is substantially made over is a business or industrial plant. If a bu"iness
were the subject matter of the lease, the prominent thing will be not what houses
the business but the business itself. The building becomes secondary since eYery
278
SUPREME COURT REPORTS
(1976) 1 S.C.R.
business or industry has to be accomn1odated in some ~ndosure or building. In
A
all such cases the lessor makes over possession of the bu!lding as part <ind parcel
of the transfer of possession of the business.
[283E-F]
In the instant case a consoectus of factors settles the issue in favour of the
landlord that the real intentiori of the parties to the lease was to demi<;e primarily
the cinema equipment and secondarily the build~.ng, the lease itself being a composite one.
[2848-C]
(2) If on a fair construction, the principal provision is clear, a proviso cannot expand or lirnit it.
Somet'.m.es a proviso is
engrafted by
an
apprehensive
draftsman to ren19ve possible doubts, to make matters plain, to light up ambiguous edges.
A proviso ordinarily is but a proviso although the golden iule is to
read the whole section, inclusive of the prov'.so, in such manner that they 1nutually
throw light on each other and resl!lt in a harmonious construction. The An1ending Act in this case clarified what was implicit earlier and expressly carved out
'vhat other\vise m:ght be mistakenly covered by the main definition. The proviso
does not expand by implication, the protected area. of building tenancies to embrtlce business leases.
[284F-G]
CIVIL APPELLATE JuRtSDICTION : Civil Appeal No. 210 of 1973.
From the Judgment and Decree dated 13th March, 1972 of the
Allahabad High Court in First Appeal No. 448 of 1968.
c
R. K. Garg, S. C. Agarwa,'a, V. J. Francis and Madho Prasad, for
D
the appellant.
V. M. Tarkunde,
Hardayal Hardy and
P. P. Juneja,
for respondent No. 1.
The Judgment of the Court was delivered by
KRISHNA IYER, J.-The rent control law has been a rich source of
lengthy litigation in ·the country and the present appeal, by certificate
under Art. 133(l)(a) of the Constitution, at the instance of the
appellant-landlord, is ilJustrative of one reason for such proliferation
of cases, namely, the lack of clarity in legislative drafting and dovetailing of amendments which have the potential for creating interpretative
confusion.
, ;
The facts are few and may be stated briefly, although, at a later
stage, further details may have to be mentioned at relevant places to
illumine the argwnents advanced on both sides by counsel, Shri R. K.
Garg (for the appellant) and Shri V. M. Tarkunde (for the respondent). Shortly put, the legal issues are only three: (A) Is a cinema
theatre, equipped with projectors and other fittings and ready to be
1aunched as an entertainment hous-e, an 'accommodation' as de.fined in
s. 2(1) (d) of the U.P. (Temporary) Control of Rent and Eviction
Act, 1947 (U.P. Act.III of 1947) (for short, the Act)?
(B) If it is
an 'accommodation' as so defined, what is the impact of the proviso
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brought in by amendment in 1954 (Act XVII of 1954) (for short, the
Amending Act)? (C) If the Act barricades eviction by the landlord
;:·
because the premises let constitutes an 'accommodation', does the repeal
of the Act and exclusion of cinema houses
altogether
from
the
R
operation of the 1972 Act (U.P. Act 13 of 1972) (for short, the later
Act) rescue the right of the appellant-landlord to eject the tenantrespondent?
'
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B
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DWARKA v. D. D. SARAF (Krishna Iyer, J.)
279
The building covered by the suit is admittedly one built
and
adapted for screening films.
The plaintiff had been carrying on a
cinema business in this theatre for a long number ()f years but, when
he discontinued, the defendant approached him in Jarruary 1952. for
the grant of a lease of the building with all the equipment and fittmgs
and furniture necessary for his operating the cinema.· The necessary
certificates, sanctions. and permissions, preliminary to the conduct of
cinema shows, stood iii the name of the plaintiff, including water-pipe
connection, electricity supply and structural fitness.
Before com-·
mencement. of cinema shows, a licence is necessary under the U .P.
Cinemas (Regulation) Act and this licence has to be taken out. by
the actual operator of the cini;ma and not by the landlord of the
theatre and equipments.
Therefore, oncce the lease for the entire
building and cinema projector, accessories and the like was finalised,
the deed of demise was actually executed, it being provided that the
commencement of the lease would synchronize with the
inaugural
cinema show on March 25, 1953. It was provided in the lease deeds
that the rent for the building, simpliciter, may be shown separately
from that attributable to the costly equipments, for the purposes of
property tax and other taxes. By this apportionment, the building, as
such, was to bear a burden of Rs. 400/- per mensem by way of rent
and a monthly sum of Rs: 1,000/- was fixed fop the projector and all
other items fixed in the building. The leases were renewed from time
to time till 1959.
The suit for eviction was based on these leases which
formed the foundation of the action.
At this stage it may be noticed that the learned counsel for the
defendant-tenant 'did not dispute that running a cinema business did
constitute an industrial pur,pose so that the accommodation was used
for an industrial purpose'.
Another significant fact admitted by the
defendant's counsel before the High Court was 'that for the purpose·
of this case, in spite of there being separate documents of lease in
respect of the demised properties as referred to above, these sets of
contracts may be treated as a single transaction each time:. On these
facts and circumstances, we have to decide whether the subject matter
of the demise is an 'accommodation' within the meaning of the Act.
After settling this issue, the other two points adverted to above may
have to be considered.
While the trial Judge held that the
suit
property was not 'an accommodation' within the sweep of the Act,
the High Court, on appeal before a Division Bench, could not agree
and, on account of the difference of opinion between the two Judges
who heard. the appeal, the. case was posted before a thi~d Judge who
took the new that the sub1cct matter of the lease in question was
an 'accommodation' within the meaning of the Act.
The suit on·
this view, had to be dismissed.
The aggrieved landlord has ~ome
up to challenge this judgment.
Let us now take a Close-up of the definition of 'accommodation'
in die Act and apply it to the admitted facts here.
Section 2 (a),
as 1t stood at the tim-" of the first lease, ran thus :
"Accommodation" means residential and non-residential
accommodation in any building or part of a building and
includes,
'
,·
:zso
SUPREME COURT REPORTS
[197611 s.c.R.
(i) gardens, grounds and out houses, if any appurtenant
to such building or part of a building;
(ii) any furniture supplied by the landlord for use i11
such building or-part of a building; ·
(iii) any fitting affixed to such building
or part of a
building for the more beneficial enjoyment thereof."
The Amending Act added a clause reading thus :
"but does not include any accommodatiorl. used as a factory
or for an industrial purpose where the business
oarried
0n in or upon the building is also leased out to the lessee
by the same transaction "
at the end of clause (a).
We have to go by the amended dcfinifon
in the present case.
Since the basic fabrjc of the demise remained
the same notwithstanding several renewals its terms have a bearing.
on the decision of the case.
So we may reproduce it (relevant part I
at this stage :
·
"We have taken a Cinema hall known as
Dwarka
Prasad Theatre Hall . . . for· running a cinema. . . on ''
monthly rent of Rs. 200/- commencing from March
25,
1953."
To complete the picture, we quote from the factual summinQ-uU
JJy Salish Chandra J., since it is convenient and uncontested :
"The same day the defendants executed another lease
deed stating; that they had taken th<: Dwarka Theatre Hall
on a rent of Rs. 200/- per month and that in this building
there is- new furniture fitted for about 500 seats with ceiling
and fittings of ele'Clric light and fans, complete machinery~
ceiling fans and operating machine together with all articles
present in the hall of the theatre a list whereof has been
duly signed by the executant and that they had taken this
also on a monthly rent of Rs. 1,100/- besides rent of the
building.
The lease deed dated 1-4-1954 executed by the
defendants stated that whereas besides the cinema
hous~
popularly known as Dwarka Theatre Hall which has been
taken on hire of Rs. 200/- per month, the defendants had
also taken on rent of Rs. 800"/- per month the new furniture
with tapestry about 500 seats. and ceiling and
complete
ekctric fittings including fans and machine and ceiling fans
and operating machine together with the entire paraphernalia present in the theatre hall.
The defendants in this
lease deed stated that they had taken the building on rent to
continue running a cinema. The lease deed of 10th January
1956 was a confirmation of the same
subject matter
of
.the lease. It appears that by now the landlord was fitting
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DWARKA v. D. D. SARAF (Krishna Iyer, J.)
new furniture in the hall and for that reason the rent w;1s
increased to Rs. 1200;'.- per month.
Similarly, in the lease
• deed dated 26th May, 1959 the defendants stated that they
have taken a cinema hall known as Dwarka Theatre Hall on
a monthly rent of Rs. 40()/- and the furniture of about 500·
seats, ceiling, electric fittings, with fans, com.plete mach1n~,
ceiling fans, operating machine and other articles present m
the theatre hall, a list whereof was attached, on a monthly
rent of Rs. 1000/-."
28 l:
Let us revert to the law.
'Accommodation', in plain English,
may cover cinema houses with or without fittings.
But legislaitve·
drafting does not always leave things that easy.
Had there been a.
definition of 'controlled
accommodation', he
who runs and reads
would have gathered the intendment of
the
statute.
Here is
a
further complication introduced by the addition of a proviso of sorts
by the amending Act and a whole host of authorities on the canons
of construction and functional role of a proviso and its indirect impact
on the main provision has been brought to our notice. Does a proviso
carve out ·something from the whole?
Does it serve an independent
enacting purpose? We do not think that legislative simplicity is an
abstruse art, provided we reform our drafting
methodology.
The
Renton. Committee in England high-lighted the importance of easy·
comprehensibility .of law and wrote : ·
'There is hardly any part of our national life or of
our personal lives that is not affected by one statute or
another.
The affairs of local
authorities,
nationalised:
industries, public corporations, and private commerce are
E
regulated by legislation.
The life of the ordinary citizen
is affected by various provisions of the statute book. from
Cradle to grave."
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The instant case which deals with a legislation affecting the shel!erof common people brings up the same problem.
The main definition of 'accommodation' in the Act brings within·
its sweep not all kinds of buildings nor all types of realty leases.
The protected category is confined to those species of leases whose·
purp.o~e and subj.eel matter answer the statutory prescriptions.
More
explicitly. the wider connotation or dictionary meaning of 'accommodation' must yield to the definitional delimitation.
The core of·
th~ controversy here is (a) whether the lease is of the building, the
fittmgs and other fixtures merely making for the beneficial enjoyment
of and ancillary to the building, as urged by the tenant or whether the
building provides a_ bare, though appropriately deslgned, enclosure
to hous~ an ente1:1)f[se, the dominant purpose or real subject of the
lease. b~mg the cmema, appara~us and fittings, including subsidiarilv
and mc1dentally, though necessanly, the structure of brick and mortar:
~nd
0 (b) whether the. cinema, to fall within the exclusionary clause ·
<ldd,d bv the Amendtn~ Act must he actually a going concern "·ith
all the licenses for showmg films and running the theatre beinl! in the
name of .the less~r: Lastely, the ffect of the repeal of the Act and·
the ope.rung prov1s10n of the later Act putting cinemas out of
its
apphcat10n, has lJ.~en debated at the bar.
·
282
SUPREME COURT REPORTS
[1976) 1 S.C.R.
The Ceutral Act (The Cinematograph Act) ano the State Act
c(The U.P. Cinema Regulation Act) govern the exhibition of films aml
it is not in dispute that the theatre had. been built for and used "'s
-a cinema house even before the first lease to the respondent in l 953.
The further agreed facts are that when the last renewed lease of 1959
with which we are directly concerned was
executed, there was
a
running cinema business and further that the rent apportioned for the
building qua building was only a fraction of the rent 'for the coc;tly
fixtures intended for the cinema bnsiness'.
Looking at the three problems posed, unaided
by
the
many
, decisions cited by counsel, we are inclined to the view that a lease of
an 'accommodation' must essentially be of a building-not a business
·or industry together with the building in which it fa situated.
Of
course, a building which is ordinarily let, be it for residential or nonresidential purposes, will not be the bare walls, floor and roof, but
will have necessary amenities. to make habitation happy.
That is
why the legislature has fairly included gradens, grounds and
out
houses, if any, appurtenant to such building. Likewise, leases sometimes are of furnished buildings and_ that is why 'any furniture supplied
by the landlord for use in such building' is treated as part of the
. building. In the same strain, we may notice, as a matter of common
-occurrence, many fittings 'such as electrical fittings, sanitary fittings,
curtains and venetian blinds and air-conditioning equipment being
'fixed to the building: by the landlord so that the tenant's enjoyment
of the tenement may be more attractive.
The crucial point is that
:these additions are appurtenant,
subservient and beneficial to the
building itself.
They make occupation of the building more convenient and pleasant but the principal thing demised is the building
and the additives are auxiliary.
Where the lease is composite and
'has a plurality of purposes, the decisive test is the dominant purpose
·of the demise. _
Forgetting for a moment the clause introduced by the amending
Act, it is plain that the furniture and fittings visualized in the concept
of 'accommodation' are calculated to improve the beneficial enjoyment of the premises leased.
Counsel for the tenant has countered
this interpretation by an ingenious and plausible submission.
He
emphasizes that the present building was conceivea,
designed
and
structured expressly as a cinema house conforming to the regulations
in this behalf and the purpose of the owner was to use the auditorium
·and annexes purely as a cinema house.
According to him, when a
cinema theatre is erected, it becomes useless unless the
necessary
equipment for exhibiting films are also fitted up.
In this view, the
relative cost of the fixtures is immaterial and all these items, however
costly, are calculated to fulfil the very object of the construction of
the cinema theatre. In short, the fittings and furniture and like items
are beneficial tO and enhance the worth of the building and cannot
'be divorced or dissec.fed from the whole object which animated the
project of the building construction qua a cinema house. So presented,
there is a certain attractiveness in the argnment. although this fact of
'interpretation does no~ find a place in the submission on behalf of the
·respondent in the High ·court.
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DWARKA v. D. D. SARAF (Krishna Iyer, !.)
283
What then is the flaw in this submission, or merit in the earlier
one? The legislative policy, so far as we can glean from the scheme
of the Act, is to control rents and evictions of buildings, rack-renting
and profiteering by indiscriminate eviction from buildings, residential
and non-residenti_al, being the evil -sought to be suppressed. The law
sought to rescue exploited tenants of buildings. If this be a sound
reading of the mind of the legislature it is fair to hold that the protected category of accommodation was residential and non-residential
buildings and not business houses.
We have _been at pains to explain that the subject matter of the
leases covered by the definition of 'accommodation' is 'any building
or part of a building'.
We have carefully analysed the inclusive expressions in the original definition such as
appurtenant gardens,
grounds and out-houses, furniture for use in the building and fittings
affixed to the building. In this statutory context, gardens, out-houses,
furniture and fittings mean annexures for the better enjoyment of the
building. In this sense, the dominant intention must be to lease the
building qua building. If that be the intention, the rent control law
protects.
On the other hand, if a going undertaking such as a running
or ready-to-launch and fully equipped cinema house is covered by the
provision, the emphasis is not so much on the building but on the
business, actual or imminent.
There is
nothing in
the
present
definition which helps this shift in accent.
We may reinforce our view from the expressions used, be<:ause all
the three categories included as additions play a subservent ro)e,
while if a business were the subject matter of the lease, the prominent
thing will be not what houses the business but the business itself. The
building becomes secondary since eve>y business or industry has to
be accommodated in some enclosure or building. In all such cases,
the lessor makes over possession of the building as part and parcel
of the transfer of possession of the business. It would be a travesty
of language to speak of a lease of a building when what is sl!hstantially
made over is a business or industrial plant.
How then do we distinguish between a )ease of a
business or
industry housed in a building from a building which has fixtures for
more beneficial enjoyment?
The former is a protected 'accommodation' while the latter is left for free market operation. In the persent
case we have to visualize what was the dominant or decisive component
of the transaction between the parties, the tenancy of the building
qua building or the taking over of a cinema house as a business, the
projectors, furniture, fittings and annexes being thd moving factor, the
building itself playing a secondary, though necessary, role in
the
calculations of the parties.
Going by the rental apportioned, it is
obvious that the parties stressed the cinema equipment as by far the
more important.
Judging by the fact that there had already been a
cinema in this house for several years, with the necessary certificates
under the various statutes for running a cinema theatre obtained by
the landlord and that the lease itself was to commence only from the
date of the first show of the films, doubts regarding the
esse'ntial
284
SUPREME COURT REPORT
[1976] 1 s.c.R.
object and subject of the bargain stand dispelled.
The mere circumstance that the licence for showing films was taken by the tenant
is
of little consequence as the law itself requires it to be in his name. ·
The further circumstance that the term of the lease in one case mav
vary from the other . also where, as here, two deeds are executed, is
not a tellmg factor, m view of the clear admission by counsel for the
respondent that the two leas<> deeds
together
constituted a single
transaction ~nd that the·lease was for an industrial purpose, to wit.
runnll1Jg a cmema busmess.
The conspectus of factors no one circumstance taken by itself-thus settles the issue in favour of the landlord who contends that what has been granled is a lease of a cinema
busmess and, at any rate, the real intent of the parties to the lease
was to den11se pnmanly the cinema equipment and secondarily the
building, the lease itself being a composite one.
Social justice, legislative policy, legal phraseology and precedential.
wisdom converge to the same
point that the
scheme of control
includes, as its beneficiary, premises simpliciter and excludes from its
ambit businesses accommodated in buildings.
To hold otherwise is
to pervert the purpose and distort the language of s.2(a).
The amending clause, argues Shri Tarkunde" strikes a contrary note.
For, if the main definition in itself fences off leases of business and
industry, why this superfluous proviso expressly excluding accommodation 'used as a factory or for an industrial purpose
where
the
business is carried on in or upon the building is also leased out to
a lessee by the same transaction'? The whole section must be read
harmoniously, each. part throwing light on the other and redundancy
helng frow'ned upon.
A proviso carves out of a larger concept and
the mgumcnt is that the need for the exclusionary clause itsel! shows
tha' otherwise factories and businesses are within the operational area
of the main definition.
There is some validity in this submission hut if, on a fair construction, the principal provision is ckar, a proviso cannot expand or limit
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Sometimes a proviso is engrafted by an apprehensive draftsman to
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remove possible <.loubts, to make matters plain, to light up ambiguous
edges.
Here. such is the case.
In a country where factories
and
industries may still be in the developmental stage, it is not unusual
to come across several such umts which may not have costly machinery
or plant or fittings and superficially consist of bare buildings
plus
minor fixtures.
For example, a beedi factory or handicraft or carpentry
unit-a few tools, some small contrivances or collection of materials
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housed in {\ building, will superficially look like a mere 'accommodation'
but actually be a humming factory or business with a goodwill
as
business, with a prosperous reputation and a name among the business
community and customers. Its value is qua business, although ii: has
a habitation or building to accommodate it.
The personality of the
thing let out is a going concern or enterprise, not a lifeless edifice. ·
The legislature, quite conceivably, thought that a marginal. yet subH
stantiaL class of buildings, with minimal equipments may still be good
businesses and did not require protection as in the case of orditwry
building tenancies.
So, to dispel confusion from this region and to
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exclude wlhat seemingly might be leases only of buildings but ii'. truth
might be leases of business, the legislature introduced the exclusionary
proviso.
While rulings and text books bearing on statutory construction
have assigned many functions for provisos, we have to be se.lectiv~,
having regard to the text llllld context: of a
s~atute. Nothing . IS
gained by extensive references to lununous classics
or
suppo~ve
case law.
Haviag explained the
approach we make to the specdic
'proviso' situation in s. 2(a) of the Act, what strikes us as meaningful
here is that the legislature by the amending Act clarified what was
implicit earlier and expressly carved out what otherwise might
be
mistakenly covered by the main definition.
The proviso does not,
in this case, expand, by implication, the protected area of building
tenancies to embrace 'business' leases. ·
We may mention in fairness to counsel that the following, among
other decisions, were cited at the bar bearing on the uses of provisos
in statutes : Commissioner of Income-tax v. Inda-Mercantile
Bank
Ltd.(i); M/s. Ram Narain Sons Ltd. v. Asst. Commissioner of Sales
Tax(2); Thompson v. Dibdin (3); Rex V. Dibdin (4 ) and Tahsildar
Singh v. State of U.P.(5). The law is trite.
A proviso must
be
limited to the subject matter of tho enacting clause.
It is a settled
rule of construction that a proviso must prima facie be read and considered in relation to the principal matter to which it is a proviso.
It is not a separate or independent enactment.
'Words are dependent on the principal enacting words, to which they are tacked as a
proviso.
They cannot be read as divorced from their context' (1912
A.C. 544). If the rule of construction is that prima facie a proviso should be limited in its operation to the subject matter of the
enacting clause, the stand we have taken is sound.
To expand the
enacting clause, inflated by the proviso, sins against the fundamental
rule of construction that a proviso must be considered in relation to
the principal matter to which it stands as a provisC\. A provisci ordinarily is but a proviso, although the golden rule is to read the whole
section, inclusive of the proviso, in such manner that they mutually
throw light on each other and result in a harmonious <;onstruction.
"The proper course is to apply the broad general rule
of construction which is that a section or enactment must be
construed as a whole each portion throwing light if need
be on the rest.
.
The true principle undoubtedly is, that the sound interpretation and meaning of the statute, on a view of the enacting
clause, saving clause, and proviso,
taken and
construed
together is to prevail."
(Maxwell on Interpretation of Statutes, 10th Edn. P. 162)
(I) (1959] Supp, 2 S. C. R. 256, 266.
(2) [19551 2 S. C. R. 483, 493.
(3) [1912] A. C. 533, 541.
(4) [19101 Pro. Div. 57, 101, 125.
(5) [19691 Supp. 2 S. C. R. 875, 893.
5- L839Sup.CI/75
286
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[1976] 1 S.C.R •
·\vc· no\v move on to 'dominant intrnt" a" f1:" governing rule.
In
our vie\V, the dominant intent is fou~d ~:! :r.~rr: ~ ,· · ision of this Court.
Intlecd, some State Legislatures, accept;ng, th., f.C ;ition that where the
uominant intention of the lease is the enjoyment cf a cinema, as distinguished from the building, have <lelibera·,eiy onomded the definition
by suitable changes (e.g. Kerala and Andhra Pradesh) while other
Legislatures, on the opposite policy decision, have expressly excluded
1he rent control enactment (e.g., the latter Act).
In Uttam Chand v. S. M. La/wani(') this Court had to consider an
anafogous position under the Madhya Pradesh Accommodation Control
Act where also the term 'accommodation' was defined substantially .in
!he same language. The Court was considering the grant of the lea)f
of a Dal Mill vis a vis 'accommodation', as defined in that Act. Gajcndragadkar, CJ., elucidated the legal concept which reinforces
our
stand, if we may say so with respect.
The learned Chief Justice
observed:
"What then was the dominant intention of the· parties
wllen they entered into the present transaction)? We have
already set out the material terms of the lease and it seems
10 us plain that the dominant intenion of he appellant in
accepting the lease from the respondent was to use the
building as a Dal l\:!ill. It is true that the document purports
to be a lease in respect of the Dal Mill building, but the
said description is not decisive of the matter because even .
if the intention of the parties was to let out the Mill to the
appellant, the building would still have to be described as
the Dal Mill building. It is not a case where the subject
·matter of the lease is the building and along with the leased
building incidentaJly passes the fixture of the machin:ry in
regard to the Mill, in truth, it is the Mill which is the subject
matter of the lease, and it was because the Mill was intended
to be let out that the building had inevitably to be let out
along with the Mill.
The fact that the appellant contends
that the machinery which was transferred to him under the
lease was found to be not very serviceable and that he had to
bring in his own machinery, would not alter the character
of the transaction.
This is not a lease under· which the
appellant ent{:red into possession for the purpose of residing
in the building ·at ·all; this is a case where the appellant
entered into the foasc for the purpose of running the Dal
\lill which was located in the building. It is obvious that
a Mill of this kind will have to be located in some building
or another, and so, the mere fact that the lease purports
to be in. respect ot the building will not make it a base in
respect 'of an accommodation as defined bys. 3(a) (y) (3).
The fixtures described in the schedule to the lease are in no
sense intended for the more beneficial enjoyment of the building.
The
fixtures are the
primary
object
which
the lease was intended to cover and the · building in
which the fixtures are located comes in incidentally. That
(I) A. I. R. 1965 S.C. 716.
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is why we think the High Court W<is right in: coming to the
conclusion that the rent which the appellant had agreed to
pay to the respondent under the docullllnt in question cannot
be said to be rent pa0·a11le for any accommodation to which
the Act applies."
The ratio of that case is that the Court must apply the test of dominant
intention of the parties' to determine the character of the lease i.e.,
\vhat was the primary purpose of the parties in executing the ~ocument ?
The mere fact that the demise deals with a building does not bring it
within the ambit of accommodation. In the case before us the fixt.ures are not for the more beneficial enjoyment of the building.
On
the contrary, the possession of the building is made over as an integral
part of, and incidental to, the making over of the cinema apparatm
and costly appliances. In the language of the learned Chief Justice in
U tram Chand case (supra), the 'fixtures are the primary object which
the lease was intended to cover and the building in which the fixtures
are located comes in incident all~'.
The following decisions were relied on, or referred to, by counsel
for the appellant:
Raje Chetty v. Jagannathadas('I); Mohd. Jaffer
Ali v. S. R. Rao("); Govindan v. K1111hi/eks/11ni Amma(').
Rajamannar, C.J., speaking for the Division Bench in Raja Chetty's
case (supra) dealt with. the case of a kase of a cinema theatre in Madras
in relation to the rent control law :is it obtained in that State then.
In that connection, the learned Chief Justice observe'cl :
''We have come to the conclusion that the lessors' application in this case is not maintainable on other grounds as
we.JI.
In our opinion the lease in ·question is not governed
by the provisions of Madras Act, XV of 1946. That Act
regulates only the letting o.f ms:dential and non-residential
buildings.
Jn s. 2, building has been defmed as to include
the garden, grounds and out-houses appurtenant to the building and furniture supplied by the landlord for use in' such
huilding.
In the case before us, there is no lease of a n1crc
building or a building with compound and furniture of the
sort covered by the definition.
The lease is of land
an\l
building together
with
fixtures,
fittings,
cinematographic
talkie equipments,
machinery
and other articles.
The
lessors, evidently aware of the composite nature of the
demise, have prayed in their petition for eviction
of the
lessees from the land and buildings only. On behalf of the
respondent, Mr. :!;, V. Ramachandra Iyer relied strongly on
the provision in the tlced which splits up the monthly rent and
hire of Rs. 3,2001- into Rs. 1600 being rent for the ground
and superstructure Rs. 800/- being hire of furniture
and
Rs. 8001-, being hire of talkie equipments and machinery.
fittings and lessors' fixtures.
We have no
hesitation
in
rt) A. I. R. 1950 Mad, 284,
(2) /I.. I. R.1971 A. P.156(F. R.).
-13) A. l. R. 1966 Ker. 244 (F. Il.)
288
SUPREME COURT REPORTS
[1976) 1 S.C.R.
holding that this splitting is purely notional and nominal and
intended probably for purposes relating to the muruc1pal
assessment and other extraneous considerations. · When we
asked Mr. Ramachandra lyer what wou!Jd happen, in this
case when there is an eviction of the lessees from the land
building, to the machinery and equipments etc., and
whether there was any provJSion in the deed
relatmg
to
them, he confessed
that there was
no specific provision in the deed.
Obviously they cannot be gowmed by
Madras Act XV of 194'6 and so he said they must be governetl by the general law of contract.
He also conceded
that if the lessees paid Rs. 16001 - but defaulted in the
payment of the balance which is due as hire, the lessors have
no right to ask for eviction under the Rent Control Act.
We think that the attempted division of the lease and separation of rights in regard to two classes of property is in the
highest degree artificial, never contemplated by the parties.
Here is a lease of a talkie house with everything that is
necessary to run cinema shows. To split up such a composite lease
as this into separate contracts of lease and hire
is to destroy it altogether.
Mr. Ramachandra Iyer argued
that the furniture which was covered by the lease fell within the definition of s. 2 of the Act. We do not agree. The
observations of the learned Judges in App. No. 590 of 1945
(Patanjali Sastri and Bell JJ.) in dealing with the plant,
machinery and other moveables which were demised along
with a factory are very apposite in this connection :
'No doubt in one sense the buildings comprised in the
lease deed contain articles supplied by the londlord; but we
cannot agree that what was so supplied can be considered
in any modern sense as being furniture.'
Though in that case the learned Judges were dealing with
the lease of factory called the West Coast Match Co., which
consisted af land and buildings including a bungalow used
for residential purposes tog_ether with plant; machinery and
moveables contained therein, we think the principle of that
decision would apply equally to the case before us in which
there is a lease not merely of a building but of a cinema
theatre with all necessary equipment far the exhibition of
Films.''
It is true that in !offer Ali's Case and in Govindan's case (supra)
(the Andhra and Kerala decisions referred to above) cinema theatres
ha.e been held to fall within the definition of building, under the·
relevant rent control law of those States. A bare reading of the two
cases would show that certain amendments had been made to the
parent statutes whereby the definition was expanded and its wide range
was made to include all tenancies relating to all
structures
even
though accessories, furniture anti fittings for use in the hou~e were
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also made over. There is no doubt that the word 'fittings' may take
in a projector or other apparatus used for a cinema but it is one thing
to say that apparatus is fixed in a building and it is another
to say that such fixture or apparatus
is for the beneficial enjoyment of the building. Therefore it depends on the words used reflecting the legislative policy of each State Legislature. Indeed in Venkayya
v. Venkata Subba Rao('') a Division Bench of the Andhra Pradesh
High Court considered whether the lease of a fixture comprising buildings und machinery came within the sweep of the rent control law.
The court held that the lease of a running factory, comprising costly·
machinery intended to be used for manufacture, did not fall within
the definition. The question, in each case, the learned Judges pointed
out, would be what is the dominant. part of the demise and what the
main purpose for which the building was let out is.
In Amritlal
N. Shah v. Annapurnamma(2 ) the same court held that the lease of
a cinema did not come within the purview of Madras Act 25 of 1949.
Definitional ramifications need not detain us nor decisions turning on
them.
Shri Tarkun'dc pressed upon us the decision in Karsandas v.
Karanj/( 3 ) and Karnani Properties Ltd. v. Miss Augustine('). One
of them did refer to a cinema theatre with fittings
and generators.
Certain.Calcutta decisions, Kali Prasad v. Jagadish Pada(') and D. S.
Jain v. Meghamale Roy( 6 ) were also cited before us.
In all these
cases, the decision turned on the precise language used.
We l:lo not
see any need to discuss these and the other decisions cited before us
because we have explained why the conclusion we have reached is in
consonance with the sense, purpose and language of the Act.
For
the same reason we content ourselves with merely mentioning that in
Harisingh v. Ratanla/( 7 ) a Division Bench of the Madhya Pradesh
l.Iigh Court helrl that a fully equipped cinema theatre let out for showing films on a commercial basis.