2004 (7) TMI 660 - SC - Indian Laws

Supreme Court upholds eviction due to unauthorized change of commercial property use.

The Supreme Court upheld the eviction order, finding that the tenant's change of use of the premises from an office to a godown constituted a violation of ... Change of user - office v. godown - eviction under Section 22(2)(b)(ii) of the Goa, Daman & Diu Buildings (Lease, Rent & Eviction) Control Act, 1968 - identification of lease purpose - use in common parlance/dictionary meaning - distinction between change of trade and change of user - requirement of Reserve Bank of India permission for opening/changing branch premisesChange of user - office v. godown - eviction under Section 22(2)(b)(ii) of the Goa, Daman & Diu Buildings (Lease, Rent & Eviction) Control Act, 1968 - identification of lease purpose - use in common parlance/dictionary meaning - Use of premises let out as an 'office' for storage as a 'godown' amounts to change of user attracting eviction under Section 22(2)(b)(ii) of the Act. - HELD THAT: - The Court held that where a demised non-residential building is specifically let out for a particular commercial purpose - here, an 'office' as specified in the lease - the parties must be taken to have used that term in its ordinary or dictionary sense. 'Office' denotes a place for regular transaction of business or clerical/administrative work, whereas 'godown' or 'warehouse' denotes a place where goods are stored and largely kept closed. Relying on the ordinary meanings and on the reasoning in Des Raj v. Sham Lal, the Court explained that different categories of commercial use (shop, office, restaurant, godown etc.) are distinct; putting premises assigned for one category to another (office to godown) is a change of user within the scope of Section 22(2)(b)(ii). The Court rejected the appellants' contention equating change of trade within a shop with change of user, holding that shifting from office-activities to mere storage is qualitatively different and amounts to a change of use justifying eviction.The use of the demised premises as a godown when the lease identified it as an office is a change of user and warrants eviction under Section 22(2)(b)(ii).Requirement of Reserve Bank of India permission for opening/changing branch premises - branch definition under the Banking Regulation Act, 1949 - The appellant failed to establish that it had the requisite permission from the Reserve Bank of India to continue banking activities at the suit premises, and therefore could not rely on alleged restoration of banking activity to defeat the eviction claim. - HELD THAT: - The Court noted definitions in the Banking Regulation Act, 1949 showing that a 'branch' or 'branch office' is a place where deposits are received, cheques cashed or moneys lent, and observed statutory restrictions on opening or changing places of business without prior RBI permission. The Bank did not produce evidence of any such permission and the respondents' assertion that no permission existed was uncontroverted. Even if the Bank asserted resumption of some banking activities at the suit premises after 1988, absence of RBI permission meant those activities could not be relied upon to negate the change of user. Accordingly, the asserted restoration of banking activity did not prevent eviction.Appellant's failure to prove RBI permission for carrying on banking activities at the suit premises precludes reliance on alleged restoration of banking use; this supports the eviction finding.Final Conclusion: The appeal is dismissed. The Court affirmed that converting premises let as an office into a godown constitutes a change of user attracting eviction under Section 22(2)(b)(ii), and that the Bank could not avoid eviction by alleging resumed banking activity when it failed to prove required RBI permission. Issues Involved:1. Change of use of the demised premises.2. Premises lying closed for over four months.3. Bona fide personal use by the landlord.Issue-wise Detailed Analysis:1. Change of Use of the Demised Premises:The primary issue was whether the premises, let out for use as an 'office,' could be used as a 'godown' for storage of records, and if such use constituted a change of purpose under Section 22(2)(b)(ii) of the Goa, Daman & Diu Buildings (Lease, Rent & Eviction) Control Act, 1968. The lease specified that the premises were to be used for the functioning of the tenant's office. However, the tenant shifted its office and began using the premises for storing records. The Rent Controller found that the premises were being used as a 'godown' and not as an 'office,' constituting a change of use. The High Court upheld this finding, concluding that the right of the landlord to seek eviction cannot be negated by the tenant's subsequent restoration of the premises to their original use. The court emphasized that the premises were intended for office use, and using them solely for storage did not fulfill this purpose. The High Court further noted that the tenant admitted to using the premises for storage and planned to shift the records to another location, indicating a change in use.2. Premises Lying Closed for Over Four Months:The Rent Controller also found that the premises were lying closed from 1982 to 1993, which exceeded the four-month period stipulated in the Act. This finding was based on the tenant's admission and the evidence presented, leading to the conclusion that the landlord had ceased to occupy the premises for more than four months before the eviction proceedings were initiated. The High Court concurred with this finding, reinforcing the ground for eviction.3. Bona Fide Personal Use by the Landlord:The third ground for eviction was the landlord's bona fide need for personal use of the premises. However, this ground was rejected by the Rent Controller, and the High Court did not overturn this aspect of the decision. The focus remained on the change of use and the premises lying closed.Legal Definitions and Interpretations:The judgment delved into the definitions of 'office' and 'godown,' emphasizing their meanings in common parlance and legal dictionaries. An 'office' was defined as a place for regular business transactions or administrative work, while a 'godown' was understood as a warehouse or storage place. The court referenced various legal dictionaries and precedents to illustrate these definitions. The court also discussed the implications of the Banking Regulation Act, 1949, highlighting that the tenant had not shown any permission from the Reserve Bank of India to continue banking activities at the demised premises after shifting its main office.Conclusion:The Supreme Court upheld the eviction order, concluding that the tenant had indeed changed the use of the premises from an office to a godown, which constituted a violation of Section 22(2)(b)(ii) of the Act. The appeal was dismissed, and the eviction order was maintained, with no order as to costs. The court emphasized that the change of use from office to godown was significant and not merely a shift in business activities, thus justifying the landlord's right to seek eviction.