RAJINDER KUMAR BANSAL & ORS versus MUNICIPAL COMMITTEE & ORS. on 17 August 2021

1. The landlord is in appeals aggrieved against an order passed bythe High Court of Punjab & Haryana on 04.03.2009 whereby the clubactivities were not held as business within the meaning of Section 2(f) ofthe Haryana Urban (Control of Rent and Eviction) Act, 1973[1] so as toapply the Act to the rented land. The High Court has set aside the orderspassed by the Rent Controller as well as by the Appellate Authorityholding that the rented land is being put to use for the purpose of business.

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2. The facts leading to the present appeals are that one Telu Ramwas the original owner of the property. Bhagwan Dass held occupancyrights in terms of the Punjab Tenancy Act, 1887. Bhagwan Dass earlierexecuted a gift deed in favour of Louis club on 16.01.1909 for the purposeof running a club only after construction ofa building thereon in respectof land bearing Khasra No. 770 comprising 15 bighas and 12 biswas andKhasra No. 771 comprising of 0 bighas 8 and biswas i.e. total admeasuring16 bighas. Bhagwan Dass had doubt about the gift since he had onlyoccupancy rights and therefore, a lease deed was executed, after G

1 Hereinafter referred to as the ‘Act’

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Acancelling the gift deed, in favour of the Respondent No. 2 herein on03.03.1909. The rent was Rs. 10/- per year besides land revenue. Thetenant was given authority to use land for the purpose of club. It furtherprovided that if there is any construction, the landlord will pay marketprice of it.The lease deed in question reads as thus:

B“I, Bhagwan Dass S/o Lala Bihari Lal Mahajan is resident of CityAmbala. That land in Khewat no. 10/12, Khasra No. 542, 543measuring 15 Bigha 16 Biswa situated in Patti Acharjan, CityAmbala, executant has occupancy rights U/s 6 as per tenancylaw Punjab. That the executant with his own free will without anypressure gave possession for Entertainment vide Gift datedC16-01-1909 in favour of Louis Club, Ambala City and possessionwas also given to the Club. The gift deed was also got registered.As gift deed as per condition on line no. 12, 13 of gift deed is notlegally valid, so said Gift deed was cancelled by the present deed.Occupancy rights are given to Louis Club on perpetual leases. AllDthe rights are given to the club for its use. Club is in possession.Club is authorized to use the land for the purpose of Club. For theoccupancy rights of executant the rent has been fixed at Rs.10/-per year which will be paid yearly. Land revenue and amount tobe paid to the owner of the land will be paid by Club. Club isauthorised to get the said amount remitted from Govt. or ownerEor they may pay them. The condition is that if Club cease to existand land is not used then the land will come back to the executant.If there is any construction the executant will pay the marketprice. If executant does not pay the said price the Club is authorisedto remove his material or to sell the same to somebody else. TheFexecutant will have no objection. The owners have given consentseparately for the above. That perpetual lease deed has beenscribed on 03-03-1909.”

3. It is an admitted fact that a pavilion was constructed, whichwas used for the purpose of club only. The Respondent No. 2 hereinGcreated a sub-lease in favour of Ladies Tandon Club. Later, one portionof the property was transferred to the Municipal Committee. TheMunicipal Committee changed the use of the property by sinkingatubewell for the use of residents of the town. Therefore, the appellantsfiled a petition for ejectment inter alia on the ground of non-payment ofrent; (2) subletting of the premises without the consent of the landlord;H

and (3)that the property had been abandoned by the first respondentwhich had ceased to exist and the premises were now being used forthe offices of different departments that is the property has been put tounauthorized use.

4. The joint written statement was filed on behalf of the RespondentNos. 1, 2 and 3 i.e., Louis Club, Deputy Commissioner, State of Haryanainter alia pleading that the premises had never been used for businessand commercial purposes. Therefore, it is not covered by the rent controllaws. The State claimed ownership of the property. It was further pleadedthat Ladies Tandon Club has been occupying a portion of the propertyas a licensee since 1936 which is an unregistered society. Referencewas made to the gift deed in which mutation was sanctioned andpossession delivered to Louis Club.

5. An order of ejectment was passed by the Rent Controller on18.2.1988. An appeal against the said judgment was preferred by LouisClub through the Deputy Commissioner, State of Haryana. Such appealwas dismissed on 19.03.1994. Aggrieved against the order passed bythe Appellate Authority, a Revision Petition was filed by the MunicipalCommittee under Section115 of the Code of Civil Procedure, though itshould have been under Section 15 (6) of the Act. The High Court allowedthe revision petition.

6. The High Court relied upon the judgment of this Court reportedas Haji Ismail Valid Mohmad v. Sports Club in the name of UnionSports Club[2 ]that the activities of indoor and outdoor games of a clubwould not lead to the conclusion that premises was let out for the purposeof education. The High Court made reference to Hazara Singh andothers v. Dalip Singh and others[3 ]wherein it was held that if the landwas not principally let for business or trade, the Act could not have beenapplicable. The Full Bench judgment of the High Court reported as TheModel Town Welfare Council, Ludhiana v. Bhupinder Pal Singh[4],was distinguished that the Full Bench did not examine the question of“rented land” and thus it is not applicable. It was also held that clubactivities shall not mean business. In view of the said fact, the findingsrecorded by the Rent Controller and Appellate Authority were set asideand the eviction petition was dismissed as the authorities under the Acthad no jurisdiction to entertain the ejectment petition.

2 (1992) 1 SCC 315

3 AIR 1981 Punjab and Haryana 155

4 ILR 1971 (2) Punjab & Haryana 579

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A7. Learned counsel for the appellant relied upon the judgment inModel Town Welfare Council wherein, the word ‘business’ appearingin Section 2(f) of East Punjab Urban Rent Restriction Act, 1949, whichis pari materia with the definition of the rented land in Section 2(f) ofthe Act, framed the following questions for consideration:

B“(1) Whether the word “business” has been used in the definitionof “rented land” in section 2(f) and in clause (b) of section13(3)(a)(ii) of the Act in the restricted sense of commercialbusiness carried on with the motive of earning profit or in thelarger sense in which the expression includes everything whichengages the time, talent and interest of a man, i.e., something inCwhich a person proposes to engage himself either as a duty or indischarge of the responsibilities of his office.”

8. The Full Bench of the High Court while deciding the saidquestion, held as under:

D“24. Wherever the word “business” is defined in a particularstatute, it is to be given the meaning ascribed to it in that definition.The question whether the word “business” has been used in anarrower sense or in a larger sense arises in a case where nostatutory definition of that expression has been given in the relevantpiece of legislation. At page 164 of Aiyar’s Law Lexicon of BritishEIndia (1940 Edition), the word “business” in its larger sense hasbeen stated to mean “an affair requiring attention and care; thatwhich busies or occupies one’s time, attention, and labour as hischief concern.” In the same passage the word “business” ismentioned to convey, in the narrower sense, mercantile pursuits;Fthat which one does for a livelihood; occupation; employment; as,the business of a merchant; the business of agriculture.” It hasfinally been stated that “the word ‘business’ is of large signification,and in its broadest sense includes nearly all the affairs in whicheither an individual or a corporation can be actors.” Referring tothe larger sense of the word, it has again been stated at page 165Gthat ‘business is that which engages the time, talents and interestof a man; it is what a man proposes to himself; what belongs to aperson to do or see done, that is properly his business; and aperson is bound either by the nature of his engagements, or byprivate and personal motives, to perform a service for another.

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31. After carefully considering the law laid down in all the abovecases. I am Inclined to hold :-

(1) That the word “business” is by itself not a word of art and iscapable of being construed both in the wider as well as in thenarrower sense depending on the context in which it occurs

(2) Since the “landlord” within the meaning of section 2(c) of theAct can include an individual as well as juristic person and thereis no special restrictive definition of the word business in the Actthe expression “business” has been used in section 2(f) of the Act(in the definition of “rented land”) as well as in section13(3)(a)(ii)(b) in the wider sense and not in the narrower sense.

(3) The word business in section 2(f) and section 13(3)(a)(ii) ofthe Act need not necessarily be commercial business carried onwith a profit motive. The word includes within its scope acharitable business or a dealing in the interest of the publicor a section of the public.

(4) The scope of the word ‘business’ in the aforesaid provision ofthe Act is not controlled or coloured by the word ‘trade’ occurringalongside it in section 2(f) of the Act. Whereas every trade wouldbe a business, the reverse of it is not true. Business is a genus, ofwhich commercial and non-commercial business and trade aresome of the species.”(Emphasis Supplied)

9. The Full Bench of the High Court approved the judgment ofMadras High Court reported as P.K. Kesayan Nair v C.K. BabuNaidu[5] as also another judgment of the same High Court reported asP.Vairamani Ammal v. K.N.K. Rm. Kannappa[6] and a Single Benchjudgment of Punjab & Haryana High Court reported as Arjan SinghChopra v. Sewa Sadan Social Welfare Centre, Ferozepur Cantt.[7]to arrive at the conclusions referred to above.

10. In Arjan Singh Chopra’s case, the tenant was sought to beevicted in bonafide requirement of a residential building. The stand ofthe tenant was that the building was being used for running of a schoolby the tenant. The argument raised was that building is a non-residentialbuilding. But if the landlord is able to show that the demised premises 5 AIR 1954 Mad. 892

6 1970 (II) M.L.J. 689

7 I.L.R. 1967 (II) Pb. & Hr. 645

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Aare not being used solely for the purposes of business or trade, the samewould come within the definition of a residential building. The High Courtheld that the activity which the tenant society carries on in running andmaintaining the school, by engaging teachers, as also some of theministerial staff, to carry on the school, and by carrying on teachingactivities, it is doing a business though it may not be making a profit. ItBwas held that the word business is of much wider connotation and so theactivity definitely falls within the scope of that word as used in section2(d) of the Act. It was held as under:- “5. In the present case the tenant society maintains and carrieson the school, in which connection it must necessarily engageCteachers and some ministerial staff to manage the school, and forthat purpose it must have funds which would be disbursed inmaintaining and running the school. There is no evidence butprobably part of such expense may be realised by some nominalfees which the society may be charging from its pupils. So theDactivity which the tenant society carries on in running andmaintaining the school, by engaging teachers, as also someof the ministerial staff, to carry on the school, and by carryingon teaching activity, it is doing a business though it may notbe making a profit.In view of the decision in the case cited itsactivity would also come within the scope of the word ‘trade’.EHowever, the word business is obviously of much widerconnotation and so the activity definitely falls within the scope ofthat word as used in section 2(d) of the Act. The learned counselfor the landlord contends that the expression “business or trade”in section 2(d) has reference to such activity as is carried on in a Fshop, and hence carried on with a profit motive. If this was so,nothing stops the Legislature from limiting a definition in section2(d) in the Act to a shop, but that is not so. The definition of a“non-residential building” applies to a building, whether shop orotherwise, which is used solely for the purpose of trade or business.

So that the definition is not confined to a shop only nor doesG‘’it necessarily imply that the activity, that is business or trade,must have with it profit motive.So this argument on the side ofthe landlord cannot succeed and as the activity of the tenant-society is ‘business’ within the meaning and scope of that wordas used in section 2(d), the demised premises are ‘non-residentialHbuilding’ with the result that the landlord cannot have ejectment of the tenant-society on the ground which is subject-matter ofargument at this stage.” (Emphasis Supplied)

11. A learned Single Bench of the Madras High Court in a judgmentreported as P. Vairamani Ammal, was examining a case, where thetenant was using the premises as a rice and flour mill. The landlord hassought the ejectment of the tenant on the ground of his bonafiderequirements for the purposes of distribution of water which was opposedinter-alia on the ground that such purpose is not a business, which wouldentitle the landlord to claim vacant possession. The High Court held asunder:

“4. The Oxford Dictionary gives the meaning of the word“business” as “being busy, task, duty……….habitual occupation,profession, trade, serious work.” It is, therefore, to be seen thatthe word has a very wide import and would cover every activitywhere men keep themselves busy. In Halsbury’s Laws of England3[rd] Edition, Volume 38, the word ‘business’ is stated as a widerterm than and not synonymous with, trade and means practicallyanything which is an occupation as distinguished from a pleasure.Examining the scheme of the Act it will be seen that the purposeof the enactment is to consolidate the law relating to the regulationof the letting of residential and non-residential buildings and thecontrol of rents of such building. In this context the meaning ofthe word “business” will have to be determined………………….The Object of the enactment being one to regulate of occupationof residential and non-residential buildings. I can see no prohibitionagainst the landlord putting the building to any legitimate use andalso requiring the building bonafide for any legitimate use. Solong as the object is a legitimate one and so long as the requirementsof the sub-section are fulfilled, I see no reason for restricting themeaning of the term “for purposes of a business.” If the legitimateactivity by the landlord will be his business the ordinary meaningof the word ‘business’ applies and there is no warrant forcommercial activities or activities of trade alone. Mr. Baluswami,the learned Counsel, drew my attention Section 10(3)(b) andsubmitted that special provision is made for a case of religious,charitable, education or other public institution and if the word‘business’ is given such a wind construction, there is no necessityfor providing for a separate provision for religious, charitable and AB

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Aeducational institutions. The contention cannot be construing theword “business” in the very restricted way and to confine it toaccepted as Section 10(3)(b) is wider in its scope and the institutionget possession even though if it is in occupation of another buildingin the same town. Further the religious institution is entitled topossession even though the purpose may not be on that falls underBSection 10(3)(a)(i)(ii) and (iii). Sub-section 10(3)(c) would alsosupport the construction which I am putting on it, as the landlordwho is occupying only a partof the building may apply to theController for an order directing a tenant occupying a portion ofthe building to put the landlord in possession if he required additionalCaccommodation for residential purposes of or purposes of abusiness which he is carrying on. The purport of this sub-sectionwould be that if the landlord is in occupation of a portion of aresidential or non-residential building he would be entitled to theother portion, and I see no warrant in the section for restrictinghis right to activities which are commercial in nature.

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8. ……..On a consideration of the decisions and on a considerationof the submissions made by the learned Counsel on either side, Iam satisfied that the learned District Judge was right in holdingthat the carrying on the Thanneerpandal activity would be forpurposes of business as required under Section (3)(a)(iii) of theEAct.”

12. We find that the High Court has distinguished the Full Benchjudgment in Model Town Welfare Council not for good reasons. Therented land as defined in Section 2(f) of the Punjab Act is pari materiawith definition of rented land in the Act. It has been held that theFexpression “business” appearing in Section 2(f) need not necessarily becommercial business carried on with a profit motive. The word includeswithin its scope a charitable business or adealing in theinterest of publicor a section of the public. Therefore, use of land as club for a pavilionisin interest of section of the public. Thus, land let out to a club which forGthe purpose of construction and use of pavilion falls within the scope ofSection 2(f) of the Act and thus eviction petition is maintainable underthe Act.

13. The judgment in Haji Ismail Valid Mohmad was a casewhere the premises were let out to a club to hold entertainmentHprogrammes and music concerts. It was found that the activities of club are more in the nature of cultural activities or recreational activities. Aperusal of the said judgment shows that the Bombay Rents, Hotel andLodging House Rates Control Act, 1947 apply to premises let out toresidence, education, business, trade or storage and also open land letout for building purposes. The argument was raised that the premiseswere let out for purposes of education. However, the High Court tookthe view that the premises let out to tenant were for promoting culturalactivities. Therefore, the tenant was entitled to protection of Section 6of the Act. It was the said finding which was reversed by the Court, theCourt has held as under:

“16. We regret, we cannot agree with this conclusion of law. Theactivities of the club are more in the nature of cultural activities orrecreational activities. They are certainly not for education. Inour view, in the context in which the term ‘education’ appears, itdoes not refer to such cultural activities or recreational activitiesas amounting to education. The basic purpose of the club activitiesrelate to fraternizing among the members by playing indoor oroutdoor games or otherwise. Such activities cannot lead to theconclusion that the premises were let for purposes of educationand consequently the respondent/tenant was not entitled to theprotection of the Act. We are thus constrained to set aside theimpugned judgment of the High Court as well as the judgment ofthe lower appellate court and restore the judgment dated August30, 1974 passed by the learned trial court. The appeal is allowedwith costs.”

14. The High Court has also relied upon Supreme Court judgmentsreported as Narain Swadeshi Mills v. Commissioner of ExcessProfits Tax[8], Senairam Doongarmall v. Commissioner of IncomeTax[9], Manipur Administration v. Nila Chandra Singh[10], as well asthe judgment of Punjab & Haryana High Court reported as HazaraSingh. The judgment reported in Senairam Doongarmall arises out ofthe Income-Tax Act, 1922 to determine the business income. Thejudgment reported as Narain Swadeshi Mills is to determine theexistence of business under the Excess Profits TaxAct, 1940. Thejudgment reported as Manipur Administration pertains to a control 8 AIR 1955 SC 176

9 AIR 1961 SC 1579

10 AIR 1964 SC 1533

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8 AIR 1955 SC 176

9 AIR 1961 SC 1579

10 AIR 1964 SC 1533

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Aorder issued under the Essential Commodities Act, 1955. Each of thestatute is enacted for a particular objective in mind. The definition in onestatute cannot be used for interpreting the same word in another statute.The judgment of the High Court in Hazara Singh is renting of anagricultural land though within the municipal area. All these judgmentsare clearly not applicable to the present case where the rented land wasBlet out to a club with an implied permission to construct. The Tenant hasconstructed a pavilion in the year 1911 and the said pavilion wasmortgaged to the District Board. The District Boards were constitutedas part of local self-Government under the Punjab District Boards Act,1883. The said Act was repealed when the Punjab Municipal Act, 1911Cwas enacted. The only question requires to be examined was whethersuch sports activity can be said to be either business or trade.The FullBench of the High Court was erroneous in holding that the land let out tothe club used for pavilion is not for the purpose of business.

15. Learned Counsel for the State raised an argument that theDhuge amount of property tax has not been paid by the lessee or thesuccessor. The fact is wholly inconsequential. Since the finding of factwas recorded by the learned Rent Controller and the Appellate Authorityhas not been disputed, therefore, the order of the eviction was rightfullypassed against the respondents.

E16. Consequently, the present appeals are allowed. The orderpassed by the High Court is set aside. The respondents are given threemonths’ time to vacate the premises and handover the possession to theappellants. It is needless to say that the appellants have to pay all taxeswhich are due on the land before they are permitted to use the premisesfor their purposes.F

Nidhi Jain

Appeals allowed.

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