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1972 (9) TMI 146 - SC - Indian Laws

Issues Involved:
1. Whether the tenancy in favor of the appellant-company was for manufacturing purposes.
2. Whether the notice terminating the tenancy was inadequate.

Detailed Analysis:

1. Whether the Tenancy Was for Manufacturing Purposes:
The core issue was whether the lease agreement between the appellant-company and the respondents was for manufacturing purposes. The appellant-company contended that the lease was for ten years and was for manufacturing purposes, which would require a six-month notice for termination under Section 106 of the Transfer of Property Act. The respondents argued that the lease was by an unregistered document and was not valid under Sections 106 and 107 of the Transfer of Property Act.

The premises in question consisted of an open piece of land with sheds and a godown, initially leased to Allenbury & Co. for storing and repairing American vehicles. The appellant-company took over the business and continued similar operations. The evidence presented included testimonies and a letter detailing the activities on the premises, which primarily involved storing, repairing, and reconditioning vehicles.

The court examined the meaning of "manufacturing purposes" as defined in various legal precedents. The term implies a transformation resulting in a new and different article with a distinctive name, character, or use. The court found that the activities on the premises were primarily for storage and resale of vehicles, with any manufacturing of spare parts being incidental to these main activities. Therefore, the dominant purpose of the lease was not for manufacturing.

2. Whether the Notice Terminating the Tenancy Was Inadequate:
Given the conclusion that the lease was not for manufacturing purposes, the court addressed the validity of the notice terminating the tenancy. The appellant-company argued that if the tenancy was for manufacturing purposes, it would require a six-month notice under Section 106 of the Transfer of Property Act. However, since the lease was not proven to be for manufacturing purposes, the one-month notice served by the respondents was deemed valid.

The court also noted that the lease document was unregistered, making it inadmissible as evidence for creating a lease. Despite this, the relationship between the parties as landlord and tenant was undisputed, and the rent was consistently paid and accepted. The court held that the notice terminating the tenancy was not invalid, as the lease was not satisfactorily proven to be for manufacturing purposes.

Conclusion:
The appeal was dismissed, with the court upholding the High Court's judgment that the tenancy was not for manufacturing purposes and the notice terminating the tenancy was valid. The appellant-company was given one month to vacate the premises and hand over possession to the respondent. The detailed legal reasoning and examination of evidence led to the conclusion that the dominant purpose of the lease was not for manufacturing, and thus, the notice served was adequate and lawful.

 

 

 

 

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