R KAPANIPATHI RAO Vs. M S MEYYAPPAN

JUDGEMENT

(1.) THE defendants are the appellants.

(2.) THE suit is for recovery of possession of the 'hotel Oceanic' and its annexe 'ratnagar' more fully described in Schedules 1 and 2 to the plaint, for recovery of rupees 22,500/- as and for mesne profits for the period commencing from 12-71969 to 26-8-1969 (date of suit) and for future mesne profits at the rate of Rs. 15,000/- per month. The first plaintiff is the son of late M. S. Ramaswami Chettiar and the second plaintiff is the wife of the said Ramaswami Chettiar. The said ramaswami Chettiar was the owner of the building 'hotel Oceanic' and his wife, the second plaintiff, is the owner of 'ratnagar' an annexe of Hotel Oceanic, at madras. The said Ramaswami Chettiar was himself running a residential high class hotel and Restaurant in the said Hotel Oceanic and its annexe Ratnagar which were fully furnished with fittings, furniture and equipment ever since the completion of its construction in or about 1954. In or about July, 1959, the defendants would appear to have approached the said Ramaswami chettiar and negotiated for a lease of the said hotel business with the restaurant in their favour with a view to run the hotel business. Accordingly, a lease of the hotel business as per the deed dated 12-7-1959 run in the said Hotel Oceanic and Ratnagar was granted. By the time the said lease deed was executed, the said Ramaswami chettiar had himself run a hotel business for about five years and the plaintiffs' case is that during that period the hotel had acquired a high reputation among the top-class hotels in India, having been equipped with linen, crockery, cutlery, refrigerators, air-conditioners, cooking ranges, electric fans, ice-cream machines, ice-making machinery, light fittings and other moveable and also with tools, implements, lawn mowers, equipments, kitchen and other utensils. The lease granted was for a period of five years commencing from 12-7-1959 on a consolidated monthly rent and hire of Rs. 6,500/ -. At the time of the lease, it was agreed between the lessors and the lessees that the linen room and dhoby room in the north-western corner with all the machinery as racks and also the vacant land in front thereof with coconut trees thereon, should also be included in the lease deed and that the defendants should pay Rs. 100/- per month in addition to the lease amount of Rs. 6500/ -. It was further agreed between the parties that a sum of Rs. 24/- for the telephones should be separately paid. Thus the total rent and hire payable by the defendants to the plaintiffs was Rs. 6,624/- per mensem. The lease further provided that the lessees should deposit a sum of rupees one lakh, free of interest, as security for the date performance of the covenants and conditions contained in the lease deed and that the said security was refundable by the lessors to the lessees on the expiry of the period of the lease, on the lessees paying up all arrears of rent and hire and putting the lessors in possession of the premises, buildings, annexes, erections, furnitures, fittings, fixtures and other moveable properties inclusive of machinery. It was further provided in the lease deed that the lessees shall take the entire stocks of liquor, stores and stationery as on 12-7-1959 and pay the lessors the value thereof at the lessor's book cost price. There was a further covenant in the lease, relating to repairing, white-washing, varnishing, painting etc. , of the premises, maintenance of all fittings, furniture, fixtures, carpets, rugs, linen, crockery, cutlery, air-conditioners, refrigerators, ice-cream machinery and ice-making machine, electrical ceiling fans, light fittings etc. and keeping the demised buildings in a good state of repair and for replacement of all breakages and deficiencies in the demised premises and hired articles from time to time. Under the lease deed the lessees were given an option to renew the lease for a further period of five years on the expiry of the term of five years fixed under the lease. There were provisions for insuring the building, furniture and fittings therein and for continuation of the existing arrangements entered into previously by the lessors with the Handicrafts emporium, Oceanic Stores, Oriental Arts, Radha Silk Emporium, Ram Mohan private Limited, Travel Agents and others with whom the plaintiffs had already entered into commitments before. The lessees were also directed to pay the lessors the amount deposited as security by them with the Madras Electricity system in respect of the power supply to the hotel business and obtain a transfer of the deposit in the name of the lessees, and in case such a transfer was not practicable, the lessees should make arrangements for making the necessary deposit with the Madras Electricity System. The said M. S. Ramaswami Chettiar, who entered into the lease aforesaid, died on 3-9-1964, leaving his last will and testament dated 6-5-1963, under which be appointed the first plaintiff (his son) as executor and trustee regarding his estate. The Will further provided that with regard to the Oceanic Hotel excluding the half share which belonged to the first plaintiff, the other half should be taken equally by the first plaintiff's children and further conferred power on the first plaintiff to manage the properties during the minority of the children. The said Will was duly probated. After the expiry of the five years period under the lease deed dated 12-7-1959, the defendants exercised their option to renew the lease for a further period of five years, and a deed dated 13th December 1965 was executed substantially on the same terms and covenants contained in the 1959 Lease deed. The plaintiffs' case is that the defendants did not run the hotel with proper business attention and care and allowed the reputation of the hotel to suffer, that they even allowed the telephone charges to fall into arrears, resulting in the disconnection of telephones for sometime, that the defendants failed and neglected to pay the water tax to the corporation of Madras, resulting in the discontinuation of water supply to the hotel, that the reputation of the hotel as a top-class hotel slumped, that the defendants were indifferent to the proper upkeep and management and maintain its reputation, that they allowed the rent to fall into arrears, that they commenced unauthorised constructions in the premises demised to them in disregard of the covenants contained in the lease deed and without obtaining the plaintiffs' consent and that the plaintiffs had to file a suit in the City Civil Court, Madras. (O. S. No. 805 of 1968), seeking for the issue of a permanent injunction against the defendants restraining them from proceeding further with the unauthorised a construction and for an injunction seeking to injunct the defendants from cutting and removing the coconut trees in the properties. The further complaint made by the plaintiff's is that the defendants put up Central Air-conditioning, a costly project, in or about April, 1968, roughly at the fag end of the renewed lease period, in spite of the protests made by the plaintiffs, with a view to remain the possession of the properties and continue the business even after the expiry of the renewed lease period in 1969. To the notice issued on behalf of the plaintiffs, terminating the lease and determining the tenancy on the expiry of the lease period on July 11, 1969, and seeking delivery of possession on the expiry of the lease period no reply was sent by the lessees. The plaintiffs' case is that long time thereafter, a lawyer's notice was sent to the lessors, making untenable claims that the lease was of the building of Hotel Oceanic and Ratnagar as distinct from the moveables, machinery, furniture etc. , which were all hired out to them to run the hotel therein, that they are entitled to the benefits of the Madras Buildings (Lease and Rent Control) Act, that they are statutory tenants under the said enactment, that the plaintiffs should arrange to remove from the premises as early as possible the articles described in Schedules 3, 4 and 5 to the lease deed, that they are no longer liable for the hire charges for the said articles and that the plaintiffs should return the deposit of Rs. 1,00,000/- after adjusting the arrears of rent and hire charges for 5 months 11 days upto and inclusive of 11-7-1969, admittedly owing to the lessors. Along with the said notice, they enclosed three cheques, one for Rs. 4,000/-, the second for Rs. 200/- and the third for Rs. 1,000/-, the first and second cheques being drawn in the name of the first plaintiff and the third cheque in the name of the second plaintiff, representing the deposit of two months' rent for the respective buildings referred to in the notice issued to them. To this, the plaintiffs sent a reply contending that the integrity of the lease deed should not be broken, that the lease is a composite lease of the buildings, fittings, furniture, crockery, etc. , that the defendants have no right to continue in possession of the properties after the expiry of the lease duly determined, that the defendants are liable to pay damages for use and occupation at Rupees 15,000/- per month after the expiry of the lease period, that the defendants are not entitled to the benefits of Madras Buildings (Lease and Rent Control) Act, that the defendants have no right to call upon the plaintiffs to remove from the hotel premises the various machineries, moveables etc. , that the lease was of the hotel business which was actually functioning in the buildings at the time the lease deed was entered into, that the claim of the defendants is wholly untenable, unjust and inequitable and that the plaintiffs are willing to refund out of the deposit of rupees one lakh, the balance due after deducting the arrears of rent and other sums due. The plaintiffs have filed the present suit, out of which the above appeal has arisen, for the reliefs mentioned above. The defendants filed a written statement contending that the lease deed dated 12-7-1959 is not a composite lease, that what was leased was only two buildings known as 'hotel Oceanic' and 'ratnagar' with the lands appurtenant thereto, on a total monthly rent of Rs. 2,500/- for the purpose of running a hotel therein, that the furniture and other articles were hired to the defendants separately on a monthly hire basis, that the lease is not a composite lease, that at the time of the execution of the lease deed it was not agreed between the lessors and the lessees that the linen room, dhoby room etc. should be included in the lease deed, that the said tenancy came up some time thereafter, independent of the lease deed, that the letting of the said premises is not governed by the terms of the lease deed, that there is no question of degrading the hotel from Three Stars to Two Stars by reason of their default, that the reputation of the hotel and its goodwill had not slumped, that the subject-matter of O. S. No. 805 of 1968 on the file of the City Civil Court, Madras is irrelevant in the present context, that the defendants are not liable to pay damages for use and occupation at Rs. 15,000/- per month, but that they are liable to pay the rent at Rs. 2,500/- per month, which they are willing to pay, that the hire of the furniture and other articles came to an end after their letter dated 7-7-1969, that the plaintiffs have illegally refused to take delivery of the said articles, that the defendants are not liable to pay any hire to them after the said date, that the plaintiffs have no cause of action for the suit and that the suit is not maintainable in a Civil Court.

(3.) THE trial Judge framed a number of issues, the principal issues being-