Supreme Court of India
LARSEN & TOUBRO LTD. CLUB HOUSE ROAD, MADRASversusTRUSTEES OF DHARMAMURTHY, RAO BAHADUR CALAVALA CUNNAN, CHETTY'S CHARITIES BY ITS TRUSTEES
- Citation
- 1988 INSC 258
- Decided
- 31 August 1988
- Disposal
- Dismissed
- Bench
- SABYASACHI MUKHERJI
Holding
The lease is a composite lease of a building with appurtenant land, not a lease of land, and therefore the lessee is not entitled to protection under Section 9 of the Tamil Nadu City Tenant's Protection Act, 1922.
Summary
Larsen & Toubro Ltd. leased a property consisting of vacant land and a building from a charitable trust in 1951. In 1975 the trust sought possession, and the company claimed protection under Section 9 of the Tamil Nadu City Tenant's Protection Act, 1922, seeking a right to purchase the land. The key issue was whether the lease constituted a lease of "land" within the meaning of the Act or a lease of a building with appurtenant land, which would exclude the tenant from the Act’s protections. The Supreme Court examined the lease deed, statutory definitions, and case law, concluding that the lease was a composite lease of a building with appurtenant land, not a lease of land alone. Consequently, the company was not entitled to the rights under Section 9. The appeal was dismissed and the respondents awarded costs.
Issues considered
- Whether the lease between the parties is a lease of "land" within the meaning of the Tamil Nadu City Tenant's Protection Act, 1922.
- Whether the lessee is entitled to protection and the right to purchase under Section 9 of the Act.
- How the term "appurtenant" should be interpreted in the context of the lease deed.
Legislation cited
- Tamil Nadu City Tenant's Protection Act, 1922s. 1, s. 11, s. 12, s. 2, s. 3, s. 4, s. 7, s. 7A, s. 8, s. 9
- Transfer of Property Act
Subjects
lease deed constructionappurtenant landSection 9 protectioneviction proceedingstenant's protection actright to purchaselandlord-tenant law
Judgment
LARSEN & TOUBRO LTD. CLUB HOUSE ROAD, MADRAS
A
v.
TRUSTEES OF DHARMAMURTHY, RAO BAHADUR
CALAVALA CUNNAN, CHETTY'S CHARITIES
BY ITS TRUSTEES
AUGUST 31, 1988 B
[SABYASACHI MUKHARJI ANDS. RANGANATHAN, JJ.]
Tamil Nadu City Tenant's Protection Act (No. III of 1922)-
Whether the lessee---Company was entitled to protection under section
9-0f-In eviction proceedings-Construction of the lease deed.
c
In this appeal by special leave, the dispute arose out ofa lease by a
charitable trust in favour of a company. The respondent·Trust filed a
suit for possession of a property taken on lease from it by the appellant-
company. The appellant responded by filing an application claiming
protection under section 9 of the Tamil Nadu City Tenant's Protection D
Act (the 'Act'). The application was accepted by the trial court which
held that the company was entitled to the benefit of the Act and appoin-
ted a Commissioner to inspect the property and lix the minimum extent
of the property required by the defendant for convenient enjoyment of
the super-structure which it would be entitled to purchase in terms of
section 9. E
The trustees filed an appeal, contending that the company was not
entitled to the. protection of section 9. The appeal was allowed. The
company preferred a revision petition before the High Court, which
dismissed it, holding that the application of the company under section
~was not maintainable. The company appealed to this Court, F
Dismissing the appeal, the Court,
HELD: The short question to be decided was whether the com-
pany was entitled to the protection.under section 9 of the Act. This piece
of legislation was enacted primarily .for the protection of small tenants, G
who in certain municipal towns and adjoining areas had constructed
buildings on others' lands, by ensuring that they were not evicted so
long as they paid a fair rent for the lease. The Act also contained a
a
provision whereunder a tenant could put up claim to purchase the
land in question from the owner. [758C]
H
755
756 SUPREME COURT REPORTS [1988] Supp. 2 S.C.R.
A The Act applies only to tenants in respect of land situated in
certain areas where the tenancy has heen created before a prescribed
date. The only controversy here was whether the lease in question couid
be Said to be a lease of 'land'. Before a right of purchase can be exer-
cised under section .9, the tenant must be a tenant of land, not compris-
ing biiilQings ill' lands appurtenant thereto. The High Court had held
B that there had been a lease not of the vacant land but of a building with
the land appurtenant thereto and the-provisions of the Act would not
apply. [764E, F-G; 765F-G]
The case involved construction of the lease deed. The language
employed in the lease-deed only showed that both land and building
C were leaseit ·whether the land was to be treated as an appurtenant or
not would depend upon the extent and nature of the land and its situa-
tion vis-a-vis the building thereon and not on whether the lease deed
described the subject-matter as "all that land and building" or Vice
Versa. If the deed had described the demised premises as 'building and
appurtenant land'. that would have helped in ascertaining the intention
D of the parties but even that would not have been conclusive. [766E-G]
The question whether a certain land is appurtenant or not is one
of fact. There was no reason to disturb the finding of the first appellate
Court and the High Court that the land was appurtenant to the build-
ing, The use of the land, in the circumstances of the case, was incidental
E. to the enjoyment and beneficial use of the building. [7688-D I
The clauses of the lease deed could not be construed as consisting
of two separate leases, one, oftbe building and the other, of the land, as
suggested by the lessees. There were clear indications in the lease deed
thai it was a single, indivisible lease of both the building and the vacant
F land. lt was impossible to consider the document as comprising two
ieases. It was a composite lease of a building with appurtenant land,
and having regard to the definitions contained in the Act, the lessee
was not entitled to the rights conferred by section 3 or section 9 of the
Act. [i69D; 770F]
G Whether the Act applied to the lease or not was something which
had to be considered on the terms of the lease deed, having regard to the
nature of the property. The clause regarding removal of the structures
is the normal clause that occurs iiI the leases under the Transfer of
Property Act. The clause in this case made no mention of compensation
arid only talked of the lessees' right to remove structures:'Even if no
H. such clause had been inserted, that would have been the position in law.
LARSEN & TOUBRO LTD. v. TRUSTEES [RANGANATHAN, J.] 757
It was not possible to infer from such a natural clause that it had been A
put in with a view to denying compensation to the lessee and getting
over the hurdle of the lessee putting in a claim for acquiring the pro-
perty by purchase. The lease deed was a simple lease deed containing
the usual clauses and covenants expected in it and nothing more. If the
parties had been conscious of the possibility of the lessee claiming any
rights under the Act, the lessors would have tried to safeguard B
themselves by making clear that what was let out was only a building
and the appurtenant land. [771C-F]
The appeal was dismissed.
Maharaja Singh v. State of U.P., [1977] 7 S.C.C. 155, referred to.
c
CIVIL APPELLATE JUJUSDICTION: Civil Appeal No. 3095
of 1988.
From the Judgment and Order dated 1.4.87 of the Madras High
Court in C.R.P. No. 370/87. D
T.S. Krishnamurthy Iyer, V. Krishnamurthy; V. Balachandran
and V. Ramamoorthy for the Appellant.
Shanti Bhushan, S. Rangarajan, and Sanjay Prakash for the
Respondent.
E
The Judgment of the Court· was delivered by
RANGANATHAN, J. 1. After having heard learned counsel
on both sides, we grant special leave and proceed to dispose of the
appeal itself by this order, the point involved being a v.ery short one.
F
2. Real estate prices all over the country, and particularly in
important capital cities, have spiralled up in the last few decades to
such heights that disputes over land, which ·at one time could have
been resolved by a little give and take between the parties have now
assumed a magnitude which makes any type of reconciliation impossi.
ble. In this case, where the dispute arises out of a lease by a prominent
0
charitable trust in Madras in favour of a well-established engineering
company of all-India stature, we were somewhat hopeful that the
parties would agree not to waste further time and energy in litig~tion
but would come to some reasonable compromise. We tried our b\'St by
adjourning the case several times and encouraging the parties to come
758 SUPREME COURT REPORTS ["1988] Supp. l S.C.R.
A up with various proposals for compromise. Ultimately, however, we
found that it was not possible to bring the parties together. We, there-
fore, proceed to dispose of the issues raised in the appeal.
On 13.8.1951, M/s. Larsen & Toubro, the appellant company,
took m;i lease from the respondent trustees a property situated in a
B busy central locality of the city of Madras. In 1975, the trustees filed a
suit for possession. The appellant company respondent by claiming
protection under Section 9 of the Tamil Nadu City Tenants' Protection
Act (No. III of 1922) (hereinafter referred to as the 'Act'). The short
question that arises in the appeal is whether the company is entitled to
this protection. The above piece of legislation was enacted primarily
for the protection of small tenants, who in certain municipal towns and
C adjoining areas had constructed buildings on others' lands, by ensuring
that they are not evicted so long as they pay a fair rent for the land.
The Act also contained a provision under which the tenant could put
forward a claim to purchase the land in question from the owner at its
average market value of the three immediately preceding years. It is
D highly doubtful whether the Act was intended to enable affluent
persons or prosperous companies, like the present appellant, to take
advantage of its provisions to compel a lessor to sell to them property
of which they have obtained initial possession as lessees. However, the
question has to be decided not on such-general considerations but. on
the language of the statute itself and so we proceed to discuss the issue
E involved.
It is first necessary to advert to the terms of the lease deed.
By the lease deed dated 13.8.1951, the lessors (trustees)
purported to demise to the lessee (company) "all that plot of vacant
F land and the buildings erected thereon and more particularly described
in the schedule hereto and delineated in the plan hereto annexed and
me_asuring 17 grounds and 321 sq. ft. or thereabouts''. The term of the
lease was 21 years from the date of the lease. The consideration was "a
monthly rent of Rs. 900 for the aforesaid land and a monthly rent of
Rs.350 for tJ!e aforesaid buildings aggregating in all to Rs.1,250 per
(} month" and the other conditions and covenants set out in the deed.
Paras f & II of the lease deed set out the followipg, among other,
covenants between the parties:
(a) The lessee was to pay, and had paid, an advance of
RS.15,000 to the lessor refundable without interest on the termi-
H n~tion of the lease;
... LARSEN & TOUBRO LTD. v. TRUSTEES 1RANGANATHAN, J.) 759
(b) the lessee was to pay the rent 'eserved regularly whether or
not any buildings were erected by the lessees on the demised land A
and irrespective of whether the land or the buildings were of use
to them for the purposes for which they were taken on lease;
xxx xxx xxx
B
(e) the lessee was to comply with all municipal and local regula-
tions "in the erection and completion of any buildings on the
demised plot."
(f) the lessors were to pay the property tax for the existing
demised building but the lessees were to pay all taxes, rates etc.
chargeable in respect of any buildings to be erected by the lessees C
on the demised plot;
xxx xxx xxx
(h) if and when the lessees sublet the demised land or any part D
thereof or the demised buildings or any portion or portions
thereof at any higher rental and the Corporation authorities levy
a property tax on the demised land or buildings higher than that
based on a monthly rent of Rs.950 and Rs.300 respectively, the
lessees shall pay such excess tax, if any, to the lessors.
E
xxx xxx xxx
(j) the lessees were to enjoy the demised land during \he term of
the lease but surrender "the demised land and the buildings" to
the lessors at the termination of the lease;
F
xxx xxx
(m) t)le lessees during the subsistence of the lease, were to reno-
vate, at their own cost, the demised buildings or any portion or
portions thereof and carry out and effect all repaits considered
necessary for their use and habitation. G
Under Para III of the lease deed, it was agreed 'between the
parties, inter alia:
(a) that in case of any default in the payment of rent or any
breach of the covenant between the parties, the lessor could H
760 SUPREME COURT REPORTS [1988] Supp. 2 S.C.R.
A "re-enter upon the demised plot and buildings or upon any part
thereof in the name of the whole" and determine the lease;
(b) that, in case the lessee fulfilled his obligations under the
lease and gave six months' prior notice of his desire to obtain a
renewal of the lease, the lessors shall grant a renewal lease of the
B demised plot and building for a further period of 21 years;
(c) if during the subsistence of this lease, the lessors get an offer
(for) the purchase of the demised plot of land or the buildings or
both from third parties at a valuation acceptable to the lessors
they shall intimate such offers to the lessees and give them the
option of buying the demised plot and buildings at such valuation
c and if within two weeks of receipts of such imtimation to the
lessees they do not send a reply to the lessors expressing their
consent to buy at such valuation and do not further pay to the
lessors a deposit or earnest money towards the intended purch-
ase, the lessors shall be entitled to sell the demised plot of land or
D buildings to such third parties for the price for which it was
offered to the said lessees and any such sale to third parties shall
be only subject to this lease. The lessees shall (be) in the event of
their purchase of the demised plot and buildings themselves pay
and bear the stamp, registration and all other charges incidental
to the deed of conveyance.
E
f The schedule to the lease deed described the demised property as "all
that piece or pare~! of land marked 'J' washed in yellow colour in the
plan hereto stitched and measuring 17 grounds 321 sq. ft. or there-
abouts and forming part of the entire piece or parcel of land with
bungalow known as 'Club Chambers' and bearihg No. I, Patullo's
f Road and No. 5, Club House Road ..... "
To turn now to the statute, the relevant provisions are not many
and may next be set out. The Act came into force in 1922 .. S. 1 applies
the Act only to "tenancies of land" in certain towns and their adjoin-
ing areas in Tamil Nadu cre.ated before a particular date but there is no
G dispute that it does apply within the city of Madras and that the lease
deed in the instant case is prior to the specified date. S. 2 contains the
\11efinitions of which we are concerned only with the following:
( 1) " 'Building' means any building, hut or other structure·
whether of masonry, bricks, wood, mud or metal or
H a~y other material whatsoever used_:_
LARSEN & TOUBRO LTD. v. TRUSTEES [RANGANATHAN, J.J 761
(i) for residential or non-residential purposes in .the
A
City of Madras ......
(ii) for residential purposes only, in any other area;
and includes the appurtenance thereto.,,
(2) "Land" does not include buildings. B
(4) 'Tenant' in relation to any-
(i) means a person liable to pay rent in respect of such
iand, under a tenancy agreement express or implied,
and
c
(ii) includes-
(a) any such person as is referred to in sub-clause (i)
who continues in possession of the land after the
determination of the tenancy agreement, D
(b) any person who was a tenant in respect of such
land under a tenancy agreement to which this Act is
applicable under sub-section (3) of section 1 and who
or any of his predecessors in interest had erecied any
building on such land and who continues in actual E
physical possession of such land and building, notwith-
standing that-
(1) such person was not entitled to the rights under
this Act by reason of the proviso to section 12 of this
Act as it stood before the date of the publication of the F
Madras City Tenants' Protection (Amendment} Act,
1972 (Tamil Nadu Act 4 of 1972), or
(2) a decree for declaration or a·decree or an order for
possession or for similar relief has been passed against
such person on the ground that the proviso to section G
12 of this Act as it stood before the date of the publica-
tiiJn of the Madras City Tenants' Protection (Amend-
ment), Act (Tamil Nadu Act 4 of 1972) disentitled such
person from claiming the rights under this Act, and
(c) the heirs of any such person as is referred to in H
762 SUPREME COURT REPORTS [1988) Supp. 2 S.C.R.
sub-clause (i) or sub-clause (ii)(a) or (ii)(b); but does
A not include a sub-tenant or his heirs.
Section 3 entitles every tenant "on ejectment" to be paid compensa-
tion for the value of any building which may have been erected by him,
by any of his predecessors in interest, or by any person not in occupa-
8 tion at the time of ejectment who derived title from either of them.
Section 4 requires the Court in a suit for ejectment against a tenant in
which the landlord succeeds to determine the amount of compensation
payable under Section 3 and direct the landlord to pay the same within
a time to be specified, in default of which the suit will stand dismissed
and landlord debarred from instituting a fresh suit for ejectment or
presenting a fresh suit for recovery of possession for a period of five
C years. Sections 7 and 7-A enable the landlord and tenant respectively
to apply to the court to fix a reasonable rent for the occupation of the
land and section 8 provides that the tenant shall not be liable to evic-
tion. for a period of five years from the date of fixation of fair rent.
Section 9 confers a valuable right on the tenant. It reads, in so far as it
D is relevant for our purpose, as follows:
"9(l)(a)(i): Any tenant who is entitled to compensation
under section 3 and against whom a suit in ejectment has ··
been instituted . . . . . may within one month after the
service on him of summons, apply to the court for an order
that the landlord shall be directed to sell for a price to be
fixed by the court, the whole or part of the extent of land
specified in the application.
xxx xxx xxx
F (b) On such application, the court shall first decided the
minimum extent of the land which may be necessary for the
convenient enjoyment by the tenant. The Court shall then
fix the price of the minimum extent of the land decided as
aforesaid, or of the extent of the land specified in the appli-
cation under clause (a), whichever is less. The price afore-
said shall be the average market value of the three years
immediately preceding the date of the order. The court
shall order that within a period to be determined by the
court, not being less than three months and not more than
three years from the date of the order, the tenant shall pay
into court or otherwise as directed the price so fixed in one
or more instalments with or without interest.
LARSEN & TOUBRO LTD. v. TRUSTEES (RANGANATHAN, J.] 763
(2} In default of payment by the tenant of any one instal-
A
ment, the application under clause (a) of sub-section (1)
shall stand dismissed, provided that on sufficiertt cause
being shown, the court may excu.se the delay and pass such
orders as it may think fit, but not so as to extend the time
for payment beyond the three years above mentioned. On
the application being dismissed, the court shall order the B
amount of the instalment or instalments, if any, paid by the
tenant to be repaid to him without any interest.
(3)(a) On payment of the price fixed under clause (b) of
sub-section (1), the court shall pass an order directing the
conveyance by the landlord to the tenant of the extent of
land for which the said price was fixed. The court Shall by C
the same order direct the tenant to put the landlord into
possession of the remaining extent of the land, if any. The
stamp duty and registration fee in respect of such conve-
yance shall be borne by the tenant.
D
(b) On the order referred to in clause (a) being made, the
suit ..... shall stand dismissed, and any decree or order in
ejectment that may have been passed therein but which has
not been executed shall be vacated.
xxx xxx xxx.. E
Section 11 provides for a notice offering compensation in terms of the
Act before any .suit for ejectment could be filed against a tenant.
Section 12 is of some relevance and needs to be set 0til:
"Nothing in any contract made by a tenant shall take away F
or limits his rights under this Act.
Provided that nothing herein contained shall affect any
stipulations made by the tenant in writing registered as to
the erection of buildings, in so far as they relate to build-
ings erected after the date of the contract." G
The proviso, however, was deleted with complete retrospective effect.
by an Amendment Ac.t of 1972.
When the trustees filed the suit for ejectment, the company, as
already stated, filed Application No. 1541 of 1976 under Section 9 of H
764 SUPREME COURT REPORTS [1988] Supp. 2 S.C.R.
A the Act. This application was accepted by the trial court. The court
negatived the company's contention that it had exercised its option for
the renewal of the lease for the period beyond the initial period of 21
years. However, it was of the opinion that the company was entitled to
the benefit of the Act and appointed a commissioner to inspect the
property, find out the market value of the property and fix the
B minimum extent of the property required by the defendant for conve-
nient enjoyment of the super-structure which it would be entitled to
purchase in terms of Section 9.
The trustees filed an appeal. They contended that the lease in
favour of the company was that of a building with appurtenant land
and that, therefore, the respondent was not entitled to the protection
c of section 9 of the Act and that, therefore, the application filed by the
company should have been dismissed. The appeal was allowed. The
company, thereupon, preferred a revision petition before the High
Court. The learned Judge examined closely the terms of the lease deed
between the parties, discussed certain earlier decision of the Court and
D concluded that the first appellate court was right in holding that the
lease was of a building and not of land and that, therefore, the applica-
tion of the company under Section 9 was not maintainable: He, there-
fore, dismissed the revision petition. Hence the present appeal.
From the statutory provisions set out above, it will be· seen that
E the Act applies only to tenants in respect of land situated in certain
areas where the tenancy has been created before a prescribed date.
The only controversy here is whether the lease in question can be said
to be a lease of 'land'. S. 2(2) which purports to define 'land' only
clarifies that 'land' does not include 'building'. This takes us therefore
to the definition of 'building' in s. 2(1) which expression means any
F structure whatever put up on land 'and includes the appurtenance
thereto'. From these definitions it will be clear that, before a right of
purchase can be exercised under Section 9, the tenant must be a tenant
of land, not comprising of buildings or lands appurtenant thereto. In
the present case, the High Court has observed as follows:
G "If a land with a building is leased out, then T.N. Act III of
1972 would have no applicability to such a property. (That)
there was a palatial building over the property could not be
disputed because the property originally belonged to a not-
able dignitary in yester years, who lived in that building
with a spacious compound all round the property (and)
H which was enjoyed as an appurtenant area to the building
LARSEN & TOUBRO LTD. v. TRUSTEES [RANGANATIIAN, J.] 76$
xxx xxx xxx
A
PWl had stated that the plinth area of the building was
about 5,~85 sq. feet. In para 7 of the written statement, -
defendants stated that the vacant site covered by the lease
deed was about 35,830 which is equal to 14 grounds and 323
sq. feet. Under the lease deed, the total area leased out was
17 grounds and 321 sq. feet. Hence the building had
occupied an area of nearly two grounds, which would be
roughly about one eighth of the total area. Hence it was not
·a tiny insignificant structure; but a substantial building
which was used as a residential building by a very affluent
person, and which had been later on given to the charity,
on a will executed by him. Under the Act, if there is a c
structure built with mud or any other material of even a
tiny dimension, it would be a building for the purpose of
the Act as defined in section 2(1); and section 3(2) being
explicit that land does not include building, the provisions
of the Act could be availed of by the tenant only if he had D
taken vacant land on lease.
xxx xxx xxx
In the instant case a substantial building which had
occupied one eighth of the area leased out cannot be over- E
looked particularly when the area was enjoyed as an appur-
tanent area for that building. Once a superstructure of such
dimension had existed, it will be impossible to apply the
provisions of Act III of 1922 and hold that only the land had
been taken on lease by defendant."
(underlining ours) F
In other words, the High Court came to the conclusion that, in the
present case, there had been a lease, not of vacant land but of a
building with the land appertunant thereto and that, therefore, the
provisions of the Act would not apply.
G
Learned counsel for the appellant attacks the above finding on
two grounds. In the first place, he points out that under the terms of
the lease deed what was leased out was " ..... plot of vacant land and
buildings erected thereon". This is the description given of the subject
matter of the lease both in the preamble as well as in the Schedule. He,
therefore, submits that the subject matter of the lease was a piece of H
766 SUPREME COURT REPORTS [1988] Supp. 2 S.C.R.
A vacant land on some portion of which there were buildings and not of a
building with appurtenant land. The second submission is that when
the definition of 'building' talks to appurtenant land, what it refers to
- is only such an extent of land as is absolutely necessary for the neces-
sary and convenient enjoyment of the building in question. Pointing
out that the building in the present case occupied barely an eighth of
B the area of the entire plot of land which was the subject matter of the
lease, he contends that the land covered by the lease cannot be said to
be appurtenant land. In this context, learned counsel relies on the
definition of 'appurtenant' in Black's Law Dictionary (Special Deluxe,
Fifth Edition) page 94 which, in so far as is relevant, reads as follows:
"Appurtenant: belonging to; accessory or incident to;
adjunct, appeanded, or annexed to; answering to acces-
sorium in civil law. Employed in leases for the purpose of
including any easments or servitudes used or enjoyed with
the demised premises. A thing is 'appurtenant' to some-
thing else when it stands in relation of an incident to a
D principal and is necessarily connected with the use and
enjoyment of the latter. A thing is deemed to be incidental
or appurtenant to land when it is by right used with the land
for its benefit, as in the case of a way, or water-course, or
of a passage for light, air or heat from or across the land of
another."
E
In our opinion, the contentions of the learned counsel cannot be
accepted. So far as the first contention is concerned, we do not think
that the language employed is conclusive on the issue. It only shows
that both land and building were leased. Whether the land is to be
treated as an appurtenant or not would depend upon the extent and
F nature of the land and its situation vis-a-vis the building thereon and not
on whether the lease deed describes the subject matter as "all that land i~
and building" or vice versa. Perhaps, if the deed had described the
demised premises as 'building and appurtenant land' that would have
helped in ascertaining the intention of the parties but even that would
not have been conclusive.
G
On the second question, we may point out that this Court had
occasion to consider at length the meaning of the expression 'appur-
tenant to building' in Maharaja Singh v. State of U.P., [1977] 7 SCC
155. There the question was whether the land on which a cattle fair was
being held could be said to be appurtenant to the building situated on
H the !:i.;;.:l. This Court observed:
LARSEN & TOUBRO LTD. v. TRUSTEES [RANGANATHAN, J.} 767
"The heated debate at the bar on this and allied aspects
A
need not detain us further also because of our concurrence
with the second contention of the Solicitor General that the
large open space cannot be regarded as appurtenant to the
terraces, stands and structures. What is integral is not
necessarily appurtenant. A position of subordination,
something incidental or ancillary or dependant is implied in B
appurtenance. Can we say that the large spaces are sub-
sidiary or ancillary to or inevitably implies in the en joy-
ment of the buildings qua buildings? That much of space
required for the use of the structures as such has been
excluded by the High Court itself. Beyond that may or may
not be necessary for the hat or meta but not for the enjoy-
ment of the chabutras as such. A hundred acres may spread c
out in front of a clubhouse for various games like golf. But
all these abundant acres are unnecessary for not inci;lental
to the enjoyment of the house in any reasonable manner. It
is confusion to miss the distinction, fine but real.
D
"Appurtenant", in relation to a dwelling, or to a school,
college includes all land occupied therewith and used for
the purposes thereof (Words and Phrases Legally
Defined-Butterworths, 2nd Edm.;
) The word 'appurtenances' has a distinct and definite mc3n- E
ing ..... Prima facie it imports nothing more than what is
strictly appertaining to the subject matter of the devise or
grant, and which would, iu truth, pass without. being
specially mentioned. Ordinarily, what is u~oessary for the
enjoyment and has been used for the purpose of the build-
ing, such as easements, alone will be appurtenant. There- F
fore, what is necessary for the enjoyment of the building is
alone covered by the expression 'appurtenance'. If some
other purpose was being fulfilled by the building and the
lands, it is not possible to contend that these lands are
covered by the expression "appurtenances". Indeed 'it is
settled by the earliest authority, repeated without contra- G
diction to· ihe latest, that land cannot be appurtenant to
land. The word 'appurtenances' inciuces all the incorporal
hereditaments attached to the land granted "' demised,
such as rights· of way, of common . . . but it does 110:
include lands in addition to that granted' (Words and
Phrases, supra). H
768 SUPREME COURT REPORTS [1988] Supp. 2 S.C.R.
In short; the touchstone of 'appurtenance' is dependence of
A
the building on what appertains to it for its use as a build-
ing. The law thus leads to the clear conclusion that even if
the buildings were used and enjoyed in the past with the
whole stretch of vacant space for a hat or mela, the land is
nor appurtenantto the principal subject granted by Section
B 9, viz., buildings".
The question, therefore, whether certain land is appurtenant or
not is one of fact. The High Court has applied its mind to the nature of
the building as well as to the terms of the lease deed. It has kept in
mind that the lease relates to a period about ~5 years ago, a time when
residential houses occupied large extents.of land. There used to be a
r
c building in the middle surrounded by a vast area covered by garden,
arbor, trees and the like. The lease also describes the building as
"Club Chambers" with a municipal door number. The buildng is itself
a substantial one occupying as many as two grounds. Having regara to
the positiOI) pertaining at the time when the lease was executed, the
first appellate court and High Court came to the conclusion that the
D
land in this case was appurtenant to the building. We see no reason to
disturb this finding. On the other hand, we agree that the use of the
land, in the circumstances of this case, was incidental to the e11joyment ·
and beneficial use of the building and, therefore, squarely fell within
the definition which has been discussed above.
It was then contended for the appellant, in the alternative, that
the lease deed in the present case should be treated as creating two
sep!lrate leases, one of the building and the <?th er of the land and that,
viewed in this light, the appellant would be entitled to exercise rights
c
under the Act atleast in respect of the portion of the demised premises
which comprised of vacant land. To substantiate this contention,
learned counsel for the appellant relied upon the following clauses in
the lease deed:
1. The divisibility of the clauses in para I of the lease deed into
two sets: clauses (b), (d), (e) and (g) as pertaining to the land and
clauses (f), (m), (n), (o) and (p) as pertaining to the building;
G 2. The stipulation <if separate rents for the land and the building;
3. The presence of clauses clearly envisagil)g and implying that
the lessee could put up buildings on the vacant portions of the land and
even providing that the lessee would be liable to pay taxes etc. in
respect of the buildings to be so erected;
H
. 4. The provision that the lessee could sublet the demised land or
LARSEN & TOUBRO LTD. v. TRUSTEES [RANGANATHAN, J.I 769
building or any part or portion thereof subject only to its being liable
A
for any extra burden of municipal tax that may fall on the landlord as a
consequence;
5. The covenant that, if during the subsistence of the lease, the
lessors got an offer for the purchase of the demised plot of land or the
buildings or both from third parties the lessee. should be given a first B
option to purchase at the price offered. Relying upon the above
features, it. was contended that the lease deed does deal with the land
and building separately. Separate rents were provided for; the lessees
were··giv.en right to put up structures and, if necessary, ·even let them
out;·· the sale or disposal of various parts of the land or the building
separately was envisaged. It was, therefore, vehemently contended
that the lease deed should be construed as consisting of two leases, one C
in respect of the vacant land and one in respect of the building rolled
into one.
We are unable to accept this contention. We agree with the
conclusion of the High Court that these clauses of the lease deed
cannot to be construed in the manner suggested by the le.ssees. There D
are clear indications in the lease deed that it is a single lease of both the
building and the vacant land. They are jointly refer>ed to in the lease
deed. There are various passages in the lease deed where it is referred
to as "the lease" i.e. a single indivisible lease. The rent payable is
specified as an aggregate of Rs.1,250 per month and a consolidated
advance of one year rent is payable under the lease deed. The lease is E.
for a period of 21 years with an option to the lessee to renew it for the
same period. The lease deed does not envisage the termination or
renewal. of the lease in respect of a part of the leased premises. The
lease of the building alone cannot be renewed without a renewal of
lease in respect of the land or vice versa. The deed contemplates the
termination of lease at one point of time whereat the lessee has to F
surrender the possession with liberty to remove any super structures it
might have put .up there. The re-entry clause also pfovides a right to
re-entry in respect of the demised premises as such in the event of any
non payment of rent or breach of the stipulations. Also, physically, it
is impossible to consider the document as comprising of two leases
because the extent of land which has to go with the building as G
appurtenance-for some part of the land atleast is clearly and neces-
sarily appurtenant-and the extent of land which can be treated as
separately demised cannot be defined. No seperate lease of land can
be read into the document without a proper specification and delinea-
tion of the extent of land that is to be comprised in such a separate
lease. H
770 SUPREME COURT REPORTS [1988] Supp. 2 S.C.R.
A The clauses on which reliance has been placed on behalf of the
appellant, in our opinion, do not lead to the inference suggested by the
appellant. The High Court has pointed out that the rent for the pro-
perty was Rs. 1,250 and that the bifurcation thereof into Rs. 900 and
Rs.350 had been introduced only with a limited purpose in view. The
landlord wanted to protect himself against the possibility of demands
a of high municipar ~axes being made against him as a result of the lessees
putting up strucfures on the land or letting out parts of the property at
high rent~. So far as the other clauses are concerned, as rightly pointed
out by the learned counsel for the respondents, they are just the usual
clauses which find a place in a lease of immovable property. They are
merely permissive in nature and enable the lessee to deal with the
land, during the period of demise, to the best advantage without
C affecting the lessor's interests. There was a substantial building exist-
ing on the land. There is no material to indicate that this was not
sufficient for the purposes for which the building was taken on lease by
the appellant. However, in case it was considered necessary to put up
further structures, the lease deed permits the lessee to do so subject to
D safeguards against higher tax and compensation and with a stipulation
that this should be removed at the time of termination of the lease. So
far as the clause pertaining to sale is concerned, again, it merely pro-
vides for a possible eventuality. The execution of a lease deed does not
prevent the lessor from disposing of the property, in whole or in part,
subject to the lessees' leasehold rights therein. The clause only pro-
f; vides that, in case the landlord decided to exercise this right, he should ,
give a right of pre-emption to the lessee. Thus all these are merely
clauses which provide against the various contingencies that may occur
during the period of the lease which may go up to 42 years. It is not
possible to infer from these clauses that the parties had entered into
two separate transactions of lease, though incorporated in a single
F document. In our opinion, this was a composite lease, as we have
already said, of a building with appurtenant land and having regard to
the definitions contained in the Act, the lessee is not entitled to the
rights conferred by section 3 or section 9 of the Act.
Before we conclude, we might refer to one more argument
G addressed on behalf of the appellant. Counsel submitted that the lease
deed itself contains a clear indication that the parties were fully con-
scious that the transaction was !fable to be hit by the provisions of the
Act. He pointed out that, when the lease deed Was' executed in 1951,
section U of the Act contained a proviso (which has been extracted by
us earlier). That proviso saved any stipulations between the parties
H regarding buildings erected after the date of the contract. Learned
LARSEN & TOUBRO LTD. v. TRUSTEES [RANGANATHAN, J.J 771
counsel for the appellant urged that the clause I(j) in the lease deed
which, by implication, disentitles the lessee to payment of any com- A
pensation in respect of structures at the time of termination of the
lease was specifically put in to exclude the applicability of the Act.
For, both parties were conscious that the Act would be applicable to
the transaction and realised that, if such a clause were not specifically
put in, the lessee would be entitled to such compensation and hence to B
the protection of the Act. Unfortunately, learned counsel urged, the
proviso was dropped with retrospective effect. The result was that,
despite the above clause in the lease deed, the lessor has become.liable
to pay the lessee compensation under section 3 thus conferring on the
latter the correlative right of exercising an option to purchase the
property under section 9. In our opinion, this argument is far-fetched.
Whether the Act applies to the lease in question or not is somethin~ c
which has to be considered on the terms of the lease deed, having
regard to the nature of the property. On this we have already expres-
sed our conclusion. The clause regarding removal of structures is the
normal clause that occurs in leases under the Transfer of Property Act.
There may have been some force in the argument at least if there· had D
been a clause specifically stating that the lessee will not be entitled to
compensation for his structures. The clause here makes no mention of
compensation and only ialks of the lessees' right to remove structures.
Even if no such clauses had been inserted, that would have been the
position in law. It is not possible to .infer from such a neutral clause
that it was put in with a view to deny compnesation to the Iessee,and E
thus get over the hurdle of the assessee putting in a claim for acquiring
the property by purchase. It is clear that the lease deed between the
parties is a simple lease deed containing the usual clauses and coven-
ants tha_t one expects in it and nothig more. If, indeed, the parties had
been conscious of the possibility of the lessee claiming any rights under
the Act, the lessors would have tried to safeguard themselves by F
making it clear that what was being let out was only a building and
appurtenant land. We, therefore, do not think that there is much·force
in this submission of the learned counsel for the appellant.
As the view we have taken is entirely based on a construction of
the lease deed before us, we do not consider it necessary to refer to the G
• various decisions discussed by the High Court in its judgment.
'
In the result, this appeal fails and is dismissed. The respondents
will be entitled to their costs.
S.L. Appeal dismissed. H
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