Statutory Tenant Cannot Seek Repossession After Demolition Of Building Under Section 108B(e) Of Transfer Of Property Act : Supreme Court

The Supreme Court has observed that the rights and liabilities of a statutory tenant have to be found under the Rent Act alone and not under Transfer of Property Act.

The bench of Justices Hemant Gupta and AS Bopanna observed that a statutory tenant cannot seek repossession after the demolition of building under Section 108(B)(e) of the TP Act.

In this case, the tenant filed a suit in which he claimed mandatory injunction and possession after the building he occupied got demolished in pursuant to proceedings under Section 322 of the Karnataka Municipal Corporation Act. He also filed on another suit claiming damages. The Trial Court decreed the suit and directed to grant quantified damages and to pay Rs. 10,000/- per month till such time, the possession is handed over to the plaintiff. In appeal, the High Court held that the building in question was demolished in haste and the plaintiff was thus entitled to possession of the building as he was unlawfully dispossessed of the same.

Before the Apex Court, the plaintiff contended that in spite of demolition of the building by the Corporation, the tenancy rights survive as the right of tenancy is not only in building but also in the land. He relied on the judgment in Shaha Ratansi Khimji and Sons v. Kumbhar Sons Hotel Private Limited holding that in terms of Section 108B(e) of the Transfer of Property Act, 18828 , the destruction of tenanted property would not amount to determination of tenancy under Section 111 of the TP Act.

Referring to the said judgment and also the judgments in T. Lakshmipathi & Ors. v. P. Nithyananda Reddy, K. K. Krishnan v. M. K. Vijaya Ragavan, N. Motilal & Ors. v. Faisal Bin Al, the court observed.

In view of the binding decisions of the larger bench and keeping in view the fact that the judgment of this Court in Shaha Ratansi Khimji was dealing with the rights of contractual tenant, the statutory tenant cannot seek repossession after the demolition of building under Section 108(B)(e) of the TP Act as the rights and liabilities of a statutory tenant have to be found under the Rent Act alone.

The court thus,in this case, observed that, since the premises are situated within the urban areas governed by the Rent Act, the tenant has a right to seek possession only in terms of Section 27 of the Act if the decree for eviction has been passed by a Court on the ground specified under clause (j) of the proviso to sub-section (1) of Section 21.

"The plaintiff filed first suit claiming right over the land after demolition of the building but being a statutory tenant, he had to avail the remedy under the Rent Act as the provisions of the TP Act are not applicable to the building and land situated within urban area. In view of the provisions of the Act, the terms of the TP Act cannot be applied for in respect of statutory tenants. The High Court has returned a finding that the plaintiff was a statutory tenant. In view of the said fact, the remedy of the tenant, if any, has to be found within four corners of the Rent Act and not under the TP Act", the bench said while setting aside the High Court judgment and dismissing the suit.

Also from the judgment : Rent Control Act Will Not Bar Demolition Of Building As Per Municipal Law: Supreme Court

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