S B ABDUL AZEEZ Vs. M MANIYAPPA SETTY

JUDGEMENT

(1.) Does a mortgagee with possession stand on a par with an owner of a building to seek the eviction of a tenant under S. 21(1)(h) of the Karnataka Rent Control Act, 1961 (for short the 'Act' hereinafter) for his bona fide requirement of the tenanted premises for residential or business needs is the question for determination in this appeal by special leave by a tenant. The trial Court, the appellate Court and the High Court in revision have answered the question in the affirmative and the aggrieved tenant, now represented by his legal representatives is before us in appeal.

(2.) The tenanted shop belongs to one Nanjappa and the appellant had taken the same on rent for running a cycle shop. On the foot of a usufructuary mortgage executed in their favour, the respondents, who are partners, sought the eviction of the appellant under S. 21(l)(h) of the Act. Their case was that they were also running a cycle shop in a rented premises but since their landlord had obtained an order of eviction against them they were bona fide in need of another building to run their business. In such circumstances they had advanced a sum of Rs. 25,000/- to the appellant's landlord Nanjappa and obtained a usufructuary mortgage of the tenanted premises and thus having stepped into the shoes of the landlord, they were seeking the eviction of the appellant. The appellant's defence was that the usufructuary mortgage was a sham and nominal transaction created by the landlord with an oblique motive because he had refused to pay higher rent for the premises and secondly the mortgagees were not bona fide in need of the petition premises for their business. The trial Court rejected both the defences and ordered eviction and the said order has been affirmed by the appellate Court and the High Court.

(3.) In this appeal there is no challenge to the findings that the respondents were bona fide in need of another shop to run their business and that they had obtained a usufructuary mortgage of the tenanted premises from the owner Nanjappa. However, the contention of the appellant is that a usufructuary mortgagee cannot be equated with the mortgagor / landlord for seeking the tenant's eviction under S. 21(l)(h) on the ground of bona fide requirement of the leased premises for his own use. The argument of Mr. Datar, learned counsel for the appellant was that, the Act is a beneficial piece of legislation intended to protect the tenants from unreasonable evictions and as such the provisions of S. 21 have to be construed in such a manner. that the rights of the tenants are not taken away beyond the limits of the section. It was urged by the learned counsel that if S. 210)(h) is to be liberally construed so as to equate a usufructuary mortgagee with the owner of a building and enable him to seek eviction of a tenant under S. 21(l)(h), then it would give a handle for scheming landlords, who cannot themselves obtain an order of eviction against their tenants under S. 21(1)(h), to create a nominal deed of usufructuary mortgage and have their tenants evicted with the help of the mortgagee and then secure possession of the leased premises for themselves. In this context it was pointed out by Mr. Datar that the usufructuary mortgage in favour of the respondents was only for a period of 30 months and therefore the mortgage should be treated as a colourable transaction.