2001 (8) TMI 1393 - SC - Indian Laws

Summary

Issues Involved:
1. Maintainability of Petition under Section 21(1)(h) of Karnataka Rent Control Act for Eviction during a Fixed Term Lease
2. Nature of the Lease: Fixed Term vs. Perpetual Lease
3. Applicability of Karnataka Rent Control Act to Fixed Term Leases

Detailed Analysis:

1. Maintainability of Petition under Section 21(1)(h) of Karnataka Rent Control Act for Eviction during a Fixed Term Lease:
The primary issue addressed is whether a landlord can seek eviction under Section 21(1)(h) of the Karnataka Rent Control Act during the subsistence of a fixed term lease. The Supreme Court examined the applicability of the Rent Control Act to a fixed term lease and whether such a lease could be terminated for bona fide requirements of the landlord.

2. Nature of the Lease: Fixed Term vs. Perpetual Lease:
The lease in question was originally for 99 years. The lessees claimed it was a perpetual lease, while the lessors argued it was a fixed term lease. The District Munsif initially ruled in favor of the lessors, but the District Court reversed this decision, considering it a perpetual lease. The High Court, however, overturned the District Court's decision, ruling that the lease was not perpetual and that the Karnataka Rent Control Act applied.

The Supreme Court did not delve deeply into whether the lease was perpetual or fixed term, as the main contention was the applicability of the Karnataka Rent Control Act to a fixed term lease.

3. Applicability of Karnataka Rent Control Act to Fixed Term Leases:
The High Court, relying on a Full Bench decision in M/s. Bombay Tyres International Ltd. vs. K.S. Prakash, held that eviction proceedings under Section 21 of the Karnataka Rent Control Act are maintainable even if the lease term has not expired. The Supreme Court examined the precedents, including the decision in Sri Lakshmi Venkateshwara Enterprises Pvt. Ltd. vs. Syeda Vajhiunnissa Begum and Dhanapal Chettiar vs. Yesodai Ammal.

The Supreme Court clarified that the Karnataka Rent Control Act overrides any contractual terms that contradict its provisions. However, it emphasized that the Act's non-obstante clause does not obliterate the entire contract but only affects the grounds for eviction. Specifically, the Act ensures that eviction can only be sought on the grounds enumerated in Section 21(1), even if the lease term has not expired.

The Court held that:
- On expiry of a fixed term lease, eviction can only be sought based on the grounds in Section 21(1).
- Any additional grounds for eviction in the lease agreement are inoperative.
- Eviction proceedings can be initiated during the lease term only if the grounds in Section 21(1) are met and are also provided for in the lease deed.
- The fixed term lease period is protected except under the specified conditions.

The Supreme Court concluded that the High Court misinterpreted the decision in Dhanapal Chettiar and that the correct interpretation was provided in the earlier Full Bench decision in Sri Ramakrishna Theatres Ltd. vs. General Investments and Commercial Corporation Ltd.

Conclusion:
The Supreme Court set aside the High Court's judgment, holding that the Karnataka Rent Control Act does apply to fixed term leases, but the lease terms are not entirely obliterated. The Act's provisions only limit the grounds for eviction to those enumerated in Section 21(1). The appeal was allowed, and no costs were ordered.