SUDHAKARAN Vs. CORP. OF TRIVANDRUM & ANR.

Tags Civil Procedure

Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 5435 of 2016, Judgment Date: Jul 05, 2016

REPORTABLE

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5435 OF 2016
( arising out of S.l.p. (c) no. 17214 of 2013 )

sudhakaran … APPELLANT

VERSUS

corp. of trivandrum & anr. ... RESPONDENTS

J U D G M E N T

ADARSH KUMAR GOEL, J.

1. This appeal has been preferred against the judgment and order passed
by the High Court of Kerala at Ernakulam in W.A. No.356 of 2013 in C.W.P.
No.9843 of 2011 dated 06.03.2013 whereby the High Court has held that the
consent of the owner of the premises is necessary for renewal of tenant’s
licence for running a hardware shop.
2. Short question involved in this appeal is the interpretation of
Section 492 (3) of the Kerala Municipality Act, 1994, which reads as under
:

“(3) Where any person intending to obtain a licence or permission for the
first time and where the applicant is a person other than the owner of the
premises in question, he shall, along with the application produce the
written consent of the owner of the premises and the period of the licence
shall not exceed the period, if any, specified in the consent.”

Facts of the case are not in dispute. Appellant is the tenant of suit
premises in Trivandrum District of Kerala since 01.06.2001. He was issued
a licence with the consent of the landlord to run hardware business on
22.10.2001 by the village panchayat in question. His application for
renewal was rejected on the ground that he did not produce consent of the
landlord. But the Tribunal for Local Self Government Institutions,
Thiruvananthapuram vide order dated 21st March, 2011 upheld the plea of the
appellant that the consent of the landlord was required when applying for
the first time. Renewal cannot be refused only on the ground that the
fresh consent was not produced by the statutory tenant. A person once
inducted as tenant continued as statutory tenant by virtue of statutory
provisions of Kerala Buildings (Lease and Rent Control) Act, 1965 till the
tenancy is terminated in accordance with law. The operative order of the
Tribunal is as follows :

“15. It is to be noted in this context that the Revision Petitioner has
not applied for a licence for the first time, I already said that the
petitioner has been running the trade on the basis of a valid licence at
least up to 31.3.2008. Under Section 492(3) of the Kerala Municipality Act,
a consent of the owner is needed only for obtaining licence for the first
time. Since the petitioner has not applied for licence for the first time
the Corporation cannot impose a condition for obtaining a consent from the
landlord. The ground for rejection does not appeal to me.

16. It is to be noted that on expiry of the original lease period the
petitioner continues as a statutory tenant or tenant holding over. The
Corporation cannot insist upon such a tenant for production of a written
consent from the landlord for the purpose of issuing of the licence. A
statutory tenant can be evicted from the leased premises only in accordance
with the various provisions contained in the Kerala Buildings (Lease and
Rent Control) Act 1965. It appears that the Corporation is dancing to the
tunes of the landlord or has become a puppet in the hands of the landlord
in insisting for a consent. It is quite evident and clear that landlord
will never give consent. The idea of the landlord is to see that the trade
being conducted by the petitioner is stopped forever and he vacates the
premises. With such a wicked idea the landlord is attempting to evict the
petitioner not in accordance with the provisions of law but through
indirect illegal means and unfortunately the Corporation has acted in a way
actively aiding the said attempt.”

The above view was upheld by the learned Single Judge of the High Court
as follows :

“2. It seems that a Rent Control Petition is pending before the Rent
Controller at Trivandrum for evicting the 2nd respondent and therefore the
finding of the Tribunal is justified. Apart from that there is no
provision which requires an existing tenant, to obtain consent from the
landlord every time renewal application is filed. This position is covered
by the Division Bench judgment of this Court in Marimuthu v. Director
General of Police (1999 (3) KLT 662). That being the situation, I do not
think that there is any illegality in the order passed by the Tribunal.”

5. On further appeal by Respondent No.2 – Landlord, the Division Bench
took a contrary view and held that on expiry of the existing licence, the
tenant has to seek a fresh licence for which fresh consent of the landlord
was required. It was observed :
“4. Validity of the earlier licence undisputedly was till 31.3.2008.
Later, renewal was sought only on 25.5.2009, that too to the President of
the Panchayat. This cannot be treated as a proper application for renewal.
Subsequently, on 10.8.2010 he filed a fresh application for licence,
therefore, neither letter dated 25.5.2009 nor application dated 10.8.2010
was a proper application for renewal of the earlier licence as contemplated
under sub-section (5) of Section 492 of the Kerala Municipalities Act. If
the earlier licence comes to an end on 31.3.2008, in the absence of making
a renewal application within 30 days before expiry of validity of the
existing licence, the tenant cannot get the benefit of renewal of licence
and it has to be only a fresh licence. Once it is a fresh licence,
permission or consent of the landlord is required as indicated in sub-
section (3) of Section 492 of the Kerala Municipalities Act.”

6. We have heard learned counsel for the parties. Learned counsel for
the appellant submits that the view taken by the Division Bench of the High
Court is patently erroneous and is contrary to the statutory provision
referred to above. The learned Single Judge has followed the judgment of
the earlier Division Bench in Marimuthu & Ors. versus D.G.P. & others
(1999 3 KLT 662). The Division Bench failed to advert to the earlier said
judgment. It is also pointed out that reference to clause (5) of Section
492 in the judgment of the Division Bench appears to be mistaken.
7. Learned counsel for the contesting respondent has supported the view
taken in the impugned judgment.
8. After due consideration of the issues involved, we find merit in the
submission made on behalf of the appellant. The statutory provision
already quoted above shows that the requirement of consent of landlord is
applicable only when a person intends to obtain a licence for the first
time. Renewal or subsequent application for obtaining licence on expiry of
the period of the existing licence, during the currency of the tenancy, is
not applicable for obtaining licence. Even in the case of application for
obtaining licence for the first time, the tenant cannot be deprived of
running lawful business merely because the landlord withheld the consent.
Valid tenancy itself has implied authority of the landlord for legitimate
use of the premises by the tenant.
9. In Marimuthu & Ors. (supra), the Division Bench of the High Court
observed :

“16. A statutory tenant under the Kerala Buildings (Lease and Rent
Control) Act can be evicted only as per the provisions of the said Act, on
the grounds enumerated therein. Since the possession of the tenant is
lawful, the landlord is not entitled to withhold his consent for the
conduct of the business for which the premises were given on rent. In the
instant case, we are satisfied that the landlord is purposefully and with
malafide intention withholding consent inspite of the directions from this
court. Under such circumstances, the Corporation also cannot insist upon
production of written consent from the landlord for the purpose of issuance
of licence for the conduct of business in the premises in question. For
carrying on business in readymade dresses a licence issued under Sec.492 of
the Kerala Municipality Act is necessary. As on date, the petitioner is not
having any licence to carry on such business. A person in occupation can be
allowed to carry on a trade or business which requires a licence, only
after obtaining such licence. In view of the facts and circumstances of the
case as above, we direct the Corporation of Thiruvananthapuram to consider
Ext.P7 application for licence without insisting upon the production of a
written consent of the owner of the premises and pass appropriate orders
after giving an opportunity to the petitioners or their representative or
their advocate, within two weeks from today. The petitioners are at liberty
to file any further documents, if need be, before the Corporation
authorities. The Corporation shall pass a reasoned order after hearing the
necessary parties and communicate the same to the petitioners within two
weeks from today. We make it clear that till such time the petitioners
shall not conduct the textile business in the premises in question. Ext.P8
order of the Corporation of Thiruvananthapuram is set aside and Ext.P7 is
restored to file for fresh consideration as directed above.”

Thus, the view taken by the Tribunal and the learned Single Judge is the
correct understanding of the import of Section 492 (3) of the Kerala
Municipalities Act, 1994 (supra). The Division Bench erred in interfering
with the said view.

Accordingly, we allow this appeal, set aside the order of the Division
Bench and restore the order of the Tribunal as affirmed by the learned
Single Judge.

………………………………………………J.
( V. GOPALA GOWDA )

………………………………………………J.
( ADARSH KUMAR GOEL )
New Delhi;
July 05, 2016.

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