Case Note & Summary
The Supreme Court adjudicated an appeal arising from an eviction suit between a lessee and a sublessee of premises owned by a public charitable trust. The premises belonged to the Pasumarthy Rukmani Ammal Charity, which was undisputedly a public charitable trust. The respondent in the Supreme Court was the lessee, and the appellant was the sublessee. The lessee filed a suit for eviction against the sublessee, asserting that the sublease had been terminated and that the premises were exempt from the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 by virtue of G.O. No. 2000 dated August 16, 1976, issued by the Governor of Tamil Nadu under Section 29 of the Act. The trial court dismissed the suit, but the first appellate court decreed eviction. The High Court dismissed the second appeal, leading to the appeal before the Supreme Court. The sole contention raised before the Supreme Court was whether the appellant, as sublessee of the premises, was entitled to the protection of the Act despite the exemption notification. The appellant argued that the exemption applied only to the lessor trust vis-à-vis the lessee, not to the relationship between the lessee and the sublessee. Reliance was placed on the observations in S. Kandaswamy Chettiar v. State of T.N. that the exemption was intended to benefit public religious and charitable trusts by freeing them from rent control restrictions and enabling eviction for non-payment of market rent. The appellant contended that the lessee, not being the trust, could not use the exemption against a sublessee. The Court examined Section 29 and the G.O., noting that the exemption covered all buildings owned by Hindu, Christian and Muslim religious trusts and public charitable trusts. It held that the exemption attaches to the buildings themselves. The Court extended the reasoning of Kandaswamy Chettiar to its logical conclusion: if public religious and charitable trusts are to have the freedom to charge market rent, they must be armed with effective eviction rights. Such eviction cannot be effectively obtained where tenants have created sub-tenancies unless the sub-tenants are also liable to eviction without the protection of the Act. Therefore, the provisions of Section 29 and the G.O. attach to the buildings owned by religious and public charitable trusts, and the protection of the Act is unavailable to both lessees and sublessees. The Court dismissed the appeal with no order as to costs. However, it directed that the appellant shall not be evicted from the premises for a period of six months from the date of judgment, provided the appellant files an undertaking in the Court that it will hand over vacant possession to the respondent on or before the expiry of six months. The undertaking was required to be filed within two weeks.
Headnote
A) Rent Control - Exemption of Public Trust Buildings - Section 29, Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 - Scope of Exemption - The exemption under Section 29 read with G.O. No. 2000 dated 16.08.1976 attaches to buildings owned by public religious and charitable trusts, and not merely to the relationship between the trust and its lessee. The court reasoned that the purpose of the exemption was to allow trusts to charge market rent and evict tenants, and this purpose would be frustrated if subtenants could claim statutory protection. Held that a sublessee cannot claim protection under the Act; appeal dismissed with no order as to costs, with six-month protection subject to undertaking (Paras 3-8).
Issue of Consideration
Whether a sublessee of premises owned by a public charitable trust is entitled to the protection of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 despite the exemption granted under Section 29 read with G.O. No. 2000 dated August 16, 1976.
Final Decision
The appeal was dismissed with no order as to costs. The Court directed that the appellant shall not be evicted from the premises for a period of six months from the date of judgment, provided the appellant files an undertaking in the Court within two weeks that it will hand over vacant possession to the respondent on or before the expiry of six months.
Law Points
- Government can exempt any building or class of buildings under Section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act
- 1960
- exemption attaches to buildings owned by public religious and charitable trusts
- sublessee of such an exempt building cannot claim protection of the Act
- the rationale of S. Kandaswamy Chettiar v. State of T.N. extends to sublessees to make eviction rights of trusts effective
