Holding

A finding of bona‑fide requirement for demolition and reconstruction under Section 14(1)(b) must be based on the building’s condition, age, landlord’s genuine intention, financial capacity and demand for space, and the tenant’s willingness to pay higher rent is irrelevant; accordingly, the landlord’s eviction petition was upheld.

Summary

The appellant-landlord sought eviction of six commercial tenants under Section 14(1)(b) of the Tamil Nadu Building (Lease and Rent Control) Act, 1960, claiming a bona‑fide need to demolish the existing 30‑year‑old building and erect a new double‑storeyed structure to augment his earnings. The Controller rejected the petitions, but the appellate authority allowed them; the High Court reversed, holding that the tenants' willingness to pay a higher rent negated any need for reconstruction. The Supreme Court held that, for eviction under Section 14(1)(b), the Rent Controller must examine the building’s age, structural condition, the landlord’s genuine intention, financial capacity, and demand for space; the tenants' offer to pay higher rent is irrelevant. Applying these principles, the Court found the landlord’s requirement bona‑fide and set aside the High Court’s order, restoring the appellate authority’s eviction order. The Court also directed the landlord to file approved construction plans and give an undertaking under Section 14(2)(b) before possession is handed over.

Issues considered

The landlord’s requirement for demolition and reconstruction under Section 14(1)(b) is bona‑fide.
Whether the tenants' willingness to pay a higher rent defeats the landlord’s claim of bona‑fide need.
What factors must the Rent Controller consider in determining a bona‑fide requirement for demolition and reconstruction.

Subjects

rent controlevictiondemolitionreconstructionbona fide requirementlandlord-tenantSection 14commercial localitylandlord earningstenant willingness to pay

Judgment

R.V.E. VENKATACHALA GOUNDER A
v.
VENKATESHA GUPTA AND ORS.

APRIL 9, 2002

[R.C. LAHOTI AND P. VENKATARAMA REDD!, JJ.] B

Rent Control and Eviction:

Tamil Nadu Building (Lease and Rent Control) Act, 1960--Section
14(/)(b)-Evictionfor immediate purpose of demolition and reconstruction of C
building-Locality where the building is situated, structural and physical
features of building, existing nature of construction, availability of new and
modern building with more space and landlords desire to augment of his
earnings are all relevant factors-Tenant's willingness to pay higher rent
expected by landlord on reconstruction is irrelevant-Held, on facts, case for D
eviction made out.

Aecording to the appellant-landlord, suit property was situated in a
business locality but was in a bad condition and the appellant-landlord wanted
to reconstruct the building so as to augment his earnings. He then submitted
to the Municipality the condition of the building, the plans for reconstruction E
which were approved. Appellant-landlord served notice on the respondents-
tenants. Thereafter the appellant-landlord filed petitions for evicting the
respondents-tenants under Section 14(l)(b) of the Tamil Nadu Building (Lease
and Rent Control) Act, 1960 alleging that the suit property was bona fide
required for immediate purpose of demolition to be made for erecting a new
building. Controller dismissed the petitions. Appellant-landlord filed appeals F
which were allowed. Respondent-tenants then filed revision petitions. High
Court held that as the tenants were prepared to pay rental which appellant-
landlord expected on reconstruction in respect of the existing accommodation,

- reconstructing the building for augmenting earnings of the appellant-landlord
after spending Rs. 6 Lakhs, did not arise and thus dismissed the petitions. G
In appeals before the Court respondents-tenants submitted that the real
purpose of the appellant-landlord is to get rid of the tenants and not to
reconstruct the property. Further as the condition of the building was neither
dilapidated nor was so old as to need immediate demolition, the eviction could
H
983
SUPREME COURT REPORTS [2002] 2 S.C.R.

A not have been ordered. Appellant-landlord wanted to.earn more and if such
expected earnings are secured by retaining the premises in the present
condition, in view of the offer made by the respondents-tenants, the question
of reconstruction being allowed does not arise at all.

Allowing the appeals, the Court
B
HELD: 1.1. In eviction petition under Section 14(l)(b) of Tamil Nadu
Buildin,~ (Lease and Rent Control) Act, 1960 the structural and physical
features and the nature of the construction of the building cannot be ignored.
[993-G]

C 1.2. In the instant case respondents-tenants are not in full occupation
of the entire space available. Appellant-landlord proposes to construct a new
and modern building in busy commercial locality of a rising city. He requires
a part of the newly constructed building for his own personal use and such
part of the newly constructed building as would be in excess of his own
D requirement he is willing to let out at current rate of rent to his tenants which
would obviously augment his earnings. The newly constructed double storeyed
building, would certainly provide much more total accommodation than what
is available. In such circumstances the offer of the tenant that they are
prepared to pay the rent at the current rate, the one which the landlord expects
on reconstruction, becomes irrelevant and should not have prev·ailed with the
E High Court. Thus the High Court ought not to have interfered with the
decision of the appellate authority. [994-A-C]

Prabhakaran Nair and Ors. v. State ofTamil Nadu and Ors., [1987] 4 SCC
238; P. Orr and Sons (P) Ltd v. Associated Publishers (Madras) Limited, (1991]
1 SCC 301 and Vijay Singh and Ors. v. Vijayalakshmi Ammal, [1996] 6 SCC
F 475, referred to.

S. Raju and Ors. v. K Nathamani, (1998) 3 LW 214 and A.N Srinivasa
Thevar v. Sundarambal alias Prema W/o Chandrakumar, (1995) 2 LW 14,

G
approved.

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 3345-3349
of 1998.
-
From the Judgment and Order dated 7. l .98 of the Chennai High Court
in C.R.P. Nos. 3213-3217 of 199 l.

H S. Sivasubramaniam, R. Nedumaran and G. Nageswara Rao, for M.A.
R.V.E. VENKAT ACHALA GOUNDER v. VENKA TESHA GUPTA [R.C. LAHOTI, J.J 985

Chinnasamy for the Appellant. A
V. Balachandran for the Respondents.

The Judgment of the Court was delivered by

R.C. LAHOTI, J. The suit property consists of a building situated on B
Easvarankoil Street of Tirupur city in the State of Tamil Nadu. There are six
tenants in the building and the portions in their occupation are identified
respectively as door Nos. 64, 64A, 64B, 64C, 640 and 64E. Six petitions for
evicting the tenants were filed before the Controller on the ground available
under clause (b) of sub-section (I) of Section 14 of The Tamil Nadu Building
(Lease and Rent Control) Act, 1960 (hereinafter the 'Act', for short) alleging C
that the building was bona fide required by the landlord for the immediate
purpose of demolishing it and such demolition is to be made for the purpose
of erecting a new building on the sjte of the building sought to be demolished.
The tenants resisted the proceedings for eviction. One of the pleas taken by
them was that the land, on which the building stood, belonged to Veeraragava D
Perumal and Visweswara temple and, therefore, the question of the landlord
reconstructing any building over the land did not arise. However, this plea did
not find favour with the Controller and, at the stage of appeal, the plea was
specifically given up by the tenants. Similarly the landlord had sought for
eviction of the tenants also on the ground of the tenants being wilful defaulters
but that plea was given up by the landlord. What survives for consideration E
is, therefore, solely the availability of ground for eviction under Section 14(1)
(b). The Controller negated the availability of this ground for eviction. The
landlord preferred six appeals which were allowed and, in supersession of the
order of the Controller, the petitions for eviction were allowed and the tenants
were directed to be evicted. Out of six tenants, one has ~ubmitted to the order F
of the appellate authority. Five tenants preferred civil revision petitions before
the High Court. The High Court has re-appreciated the evidence and recorded
a finding that the requirement of the landlord could not be said to be bona fide
and, by a common order, directed the eviction petitions to be dismissed. The
landlord has filed these five appeals by special leave.
G
Sub-Sections (1) and (2) of Section 14 and Sections 15 & 16 of the Act,
relevant for our purpose, read as under:-

"14. Recovery of possession by landlord for repairs or for
reconstruction.
H
986 SUPREME COURT REPORTS [2002] 2 S.C.R.

A (I) Notwithstanding anything contained in this Act, but subject to
the provisions of sections 12 and 13, on an application made by a
landlord, the Controller shall, if he is satisfied.

(a) that the building is bona fide required by the landlord for carrying
out repairs which cannot be carried out without the building being
B vacated; or

(b) · that the building is bona fide required by the landlord for the
immediate purpose of demolishing it and such demolition is to be
made for the purpose of erection a new building on the site of the
building sought to be demolished, pass an order directing the tenant
c to deliver possession of the building to the landlord before a specified
date.

· (2) No order directing the tenant to deliver possession of the
building under this section shall be passed

D (a) on the ground specified in clause (a) of sub-section (I) unless the
landlord gives an undertaking that the building shall, on completion of
the repairs, be offered to the tenant, who delivered possession in
pursuance of an order under sub-section (I) for his reoccupation before
--
the expiry of three months from the date of recovery of possession by
the landlord, or before the expiry of such further period as the Controller
E may, for reasons to be recorded in writing, allow; or

{b) on the ground specified in clause (b) of sub-section (1), unless the
landlord gives an undertaking that the work of demolishing any material
portion of the building shall be substantially commenced by him not T

later than one month and shall· be completed before the expiry of three
F months from the date he recovers possession of the entire building or
before the expiry of such further period as the Controller may, for
reasons to be recorded in writing allow.

G
xxx

xxx
xxx

xxx

15. Tenant to re-occupy after repairs.
xxx

xxx
xxx

xxx -
(1) Where the landlord recovers possession under clause (a) of
sub-section (l) of Section 14, he shall, within two months before the
H date on which the work of repairs is likely to be completed, give
R.V.E VEN KAT ACHALA GOUNDER v. VEN KA TESHA GUPTA [R.C. LAHOTI, J.] 987

notice to the tenant of the date on which the said work will be A
completed. Within fifteen days from the date of receipt of such notice,
the tenant shall intimate to the landlord his acceptance of the building
offered for his re-occupation and if the tenant gives such intimation,
the landlord shall within thirty days from the date of completion of the
work of repair put the tenant in possession of the building on the
original terms and conditions. If the tenant fails to give such intimation, B
his right to re-occupy the building shall terminate.

(2) If after the tenant has delivered possession, the landlord fails
to commence the work of repairs within one month from the date of
such delivery, or fails to complete the work before the expiry of three C
months from the date of such delivery, or before the expiry of the
• further period allowed under clause (a) of sub-section (2) of section
14 or having completed the work fails to put the tenant in possession
of the building in accordance with the provision ofsub-section(l), the
Controller may, on the application of the tenant made within thirty
days from the date of such failure, order the landlord to put the tenant D
in possession of the building on the original terms and conditions; and
on such order being made, the landlord and any person who may be
in occupation shall put the tenant in possession of the building.

16. Tenants to occupy if the building is not demolished._
E
(I) Where an order directing delivery of possession ha5 been passed
by the Controller under clause (b) of sub-section (I) of section 14 and
the work of demolishing any material portion of the building has not
been substantially commenced by the landlord within the period of
•
one month in accordance with his undertaking under clause (b) of sub-
section (2) of section 14, the tenant may give the landlord notice of F
his intention to occupy the building the possession of which he
delivered. If within fifteen days from the date of receipt of such notice,
the landlord does not put him in possession of buildings on the original
terms and conditions, the tenant may make an application to the
Controller within eight weeks of the date on which he put the landlord G
in possession of the building. "1e Controller shall order the landlord
to put the tenant in possession of the building on the original terms
and conditions.

(2) Where in a pursuance of an order passed by the Controller
under clause (b) of sub-section (I) of section 14, any building is H
988 SUPREME COURT REPORTS [2002] 2 S.C.R.

A totally demolished and a new building is erected in its place, all the
provisions of this Act shall cease to apply to such new building for a
period of five years from the date on which the construction of such
new building is completed and notified to the local authority
concerned."

B Before we may proceed to discuss the submissions on question of law
made by the learned counsel for the parties, we may briefly set out the relevant
facts to lay down the factual matrix on which the submissions, on question of
law, would stand. The building is situated in the city of Tirupur which, as the
appellate authorit'J has noted, is an industrial town and so far as the cloth
C business is concerned the city is top-city of the State. Evidence was recorded
before the Controller in the year 1989. At that time the building was 30 years
old. According to the landlord, the building was situated in a business locality
but was in a bad condition. The landlord wanted to reconstruct the building
so as to augment his earnings. The condition of the building, the plans for
reconstruction submitted to the Municipality and approved by it, are the facts
D stated in the notice, served on the tenants, prior to invitation of proceedings
for eviction. According to the landlord, the building would be demolished 1-

-
)
immediately and on godown being constructed at the site the landlord would
be able to earn rent at the rate of Rs. l .25p. per sq. feet. The landlord also
stated that a portion of the newly constructed building would be utilized for
E the personal use and occupation of the landlord and if any portion was left out
as being in excess of the personal requirement of the landlord then the landlord
was willing to let out the same to the tenants at the rate of Rs. l.50p. per sq.
feet. The building proposed to be constructed was a double-storey building on .
which an amount of Rs.6 lakhs was likely to be spent. The landlord tendered
documentary evidence showing that approximately an amount of Rs.9 lakhs
F was available with the landlord in the bank accounts. One of the tenants, r
namely Venkatesa Guptha, RWl admitted in his deposition that the suit
premises were situated in an important business locality of Tirupur. The building
was constructed with stones, bricks and mortar and was not required to be
demolished. However, during cross-examination, he admitted that the front
G portion o! the building was covered with cement sheets and back portion was
covered with tiles. There was also some i.w-constructed portion of the property
lying at the back. Subbarayan, RW3 admitted that though the building was not
dilapidated and damaged, yet, if a building on all the land was constructed,
then it would fetch more rental income. The tenants offered that even without
new construction they were prepared to pay rent at the rate of Rs.1.25p. per
H sq. feet in the present condition of the building.
R.V.E. VEN KAT AC HA LA GOUNDER'· VENKA TESHA GUPTA [R.C. LAHOTI, l.] 989

Thus, on a broad conspectus, the situation which emerges is that out of A
the total property of the landlord, part is lying unconstructed and part is
constructed. The constructed portion is covered with asbestos sheets or tiles
used as roof. The property is valuable as situated in busy business locality.
The building was about 30 years old by the year 1989. If reconstructed,
obviously the building would be double-storeyed, a modern building of cement B
concrete and would admittedly fetch more rental income apart from satisfying
some personal need of the landlord. The appellate authority considered all the
evidence and relevant circumstances of the case and arrived at a finding that
the requirement of the landlord was bona fide. These findings have been
reversed by the High Court mainly on the ground, as the judgment of the High
Court reveals, that as the tenants were prepared to pay Rs. l.25p. per sq. feet C
by way of rent in respect of the existing accommodation, the question of
reconstructing the building for the purpose of augmenting earnings of the.
landlord, and that too after spending Rs.6 lakhs, did not arise. The High Court
observed that merely because the landlord was having sufficient funds and
had got the plans of proposed reconstruction approved, the Court could not
order eviction. D
>
In this Court, it is submitted by the learned counsel for the landlord-
appellantthat a finding on the question of bona fides of the landlord is basically
a finding of fact which, having been arrived at by the appellate authority on
the consideration of all the relevant facts and circumstances of the case, was E
not liable to be interfered with in exercise of revisional jurisdiction of the
High Court. The learned counsel pointed out those relevant aspects of the case
, which were not adverted to by the High Court, rendering the judgment of the
High Court infirm, with which we will deal a little later. The learned counsel
for the respondents-tenants submitted, on the other hand, that the real purpose
of the landlord is to get rid of the tenants and not to reconstruct the property. F
The learned counsel pointed out a serious lacuna in the Act and submitted that
after securing orders of eviction if the landlord demolishes the property but
does not commence reconstruction, the tenants are left without any remedy
and therefore the Court should carefully and cautiously examine the bona
tides of the landlord and should not order eviction unless fully satisfied of the O
need for reconstruction and its bona tides. It was lastly submitted that the
condition of the building was one of the relevant - and weighty -factors and
~·
in as much as the building was neither dilapidated nor was so old as to need
immediately a demolition, the eviction could not have been ordered. The
landlord wanted to earn more and if such expected earnings are secured by
retaining the premises in the present condition, in view of the offer made by H
990 SUPREME COURT REPORTS (2002) 2 S.C.R.

A the tenants, the question ofreconstruction being allowed does nor arise at all.'
_,
In Prabhakaran Nair and Ors. v. State of Tamil Nadu and Ors., [1987]
4 SCC 238, constitutional validity of Section 14(1) (b) read with Section 14(2)
(b) was challenged on the ground that the provision is violative of Article 14
of the Constitution because it does not provide for re-entry of the tenant in the
B reconstructed premises as has been done in several other State Legislations. It
was also submitted that while the premises, having been vacated for the purpose
of repairs under Section 14(2) (a) , are available for re-occupation by the
dislodged tenants, a similar provision is not to be found for protecting the
tenants evicted for the purpose of reconstruction under Section 14(2) (b) and
c this also renders the latter provision unreasonable. The challenge was turned
down by this Court. This Court held inter alia that in the case of demolition
and reconstruction, the landlord has to substanti~lly commence the work of
demolition in material portion of the building not }ater than one month and the ~

entire demolition work to be completed before the expiry· of three months
from the date he recovers possession of the entire building. This is a reasonable
D guarantee for the bona tides of the landlord. Vide paras 12 and 13, the Court •·
;-
held as under:· ~'

"12. It has further to be borne in mind that after such demolition
the reconstruction of a new building on the same site is bound to take
time and such time depends upon the nature of the building to be
E erected and it might take years it was argued. During that period a
tenant was bound to have found some other suitable alternative
accommodation; on the other hand in the case of a building for repairs,
a tenant may arrange for temporary accommodation for a few months
and return back to the building. Therefore provision for re-induction
F in the case of repairs and absence of such a provision in the case of
demolition and reconstruction is quite understandable and rational.

13. It has to be borne in mind that it is not practicable and would
be anomalous to expect a landlord to take back a tenant after a long
lapse of time during which time the tenant must necessarily have
G found some suitable accommodation elsewhere. This is the true purpose
behind Section 14(1) (b) read with Section 14(2) (b) . In the aforesaid •·
view of the matter, we are unable to accept the submission that in
providing for re-induction of the tenant in case of repairs and not
providing for such re-induction in case of reconstruction, there is any
unreasonable and irrational classification without any basis."
H
. R.VE. VENKATACHALA GOUNDER v. VEN KA TESHA GUPTA [R.C. LAHOTI, J.) 991

During the course of its judgment the Court further observed that the A
courts are not concerned with the wisdom of the Legislature and the provision
contains sufficient inbuilt guidelines to save it from being rend.ered
unconstitutional. While protecting the tenants from unreasonable eviction, the
landlords should not be discouraged from constructing new buildings because
in the •1ltimate result it would augment the housing wealth of the nation which B
in turn would benefit the tenants and protect their larger interest by reducing
the shortage of housing.

A three-Judge Bench in the case ?f P. Orr & Sons (P) Ltd. v. Associated
Publishers (Madras) limited, [1991] I SCC 301, considered Section 14(1) (b)
of the Act and the underlying legislative scheme and held that in order to
a
make out case for eviction under Section 14(1) (b) , demolition for the <;
purpose of erection of a new building must be the direct, immediate, genuine
and real requirement of the landlord. In the opinion of the Court, the bona fide
character of the requirement is proved by t.he appropriateness of time and the
absence of any ulterior or irrelevant consideration separating the requirement
from the statutory or permitted purpose. The direct and imme.diate nexus D
between these two elements is proved by the condition of the building and
other relevant circumstances. What is the degree of urgency warranted by
what extent of damage to the building that makes the requirement directly and
immediately connected with the statutory purpose, is a question of fact which
must be decided in each case on evidence. Absence of any need fo~ urgency
by reason of the strong and sound condition of the building will negative th.e
bona fide character of the requirement and as such a building which is· sound
and safe does not qualify for demolition in terms of Section 14(1) (b) . Any
such building falls totally outside its ambit.

' Thus, in the opinion of three-Judges Bench in the above-noted case, the
determinative factor was the condition of the building th<iugh in addition, F
other factors could be taken into consideration.

The three-Judges Bench decision in P. Orr and Sons came up for the
consideration of five-Judges Bench in Vijay Singh and Ors. v. Vijayalakshmi
Amma/, [1996] 6 SCC 475. The Constitution Bench lan:iented the Legislature
having not employed clear and specific expression to make their intention G
clearly understandable. However, keeping in view the two pronged purp~se of .
the Act-to protect the tenants from ~viction at the mere wj!I and desire of ibe
landlord and at .the same time to fulfil the legislative intent of securing eviction
for the "immediate purpose for demolishing", the.Constituiion Bench held that
the said expression could not be linked only with the dilapidated and dangero~.s H
992 SUPREME COURT REPORTS (2002) 2 S.C.R.

A condition of the building. Section 16 was a pointer to the legislative intent; if
only such buildings which were dilapidated and dangerous for human habitation·
were intended to be covered then provision would not have been made in sub- .
section (1) of Section 16 for re-induction of the tenant in such a building on
original terms and conditions if the building was not demolished. On the
B contrary, there being no provision for re-induction of the tenant in the neW!y
constructed building and, further, such newly constructed building having
been exempted from the provision of the Act for a period of five years from
the date of completion of sucli new building having been notified to the local
authority concerned, it is a clear indication that the framers of the Act desired
to encourage erection of new building in place of the building which had been
C totally demolished on the basis of th'e order passed by the Controller under
Section 14( 1) (b). The Constitution Bench summed up the view of the law in
the following words:-

"For granting perm1ss1on under Section 14(1) (b) the Rent
Controller is expected to consider all relevant materials for recording
D a finding whether the requirement of the landlord for demolition of
the building and erection of a new building on the same site is bona
fide or not. For recording a finding that requirement for demolition
was bona fide, the Rent Controller has to take into account: ( 1) bona
fide intention of the landlord far from the sole object only to get rid
of the tenants; (2) the age and condition of the building; (3) the financial
E position of the landlord to demolish and erect a new building according
·to the statutory requirements of the Act. These are some of the
illustrative factors which have to be. taken into consideration before an
order is passed under Section 14(1) (b). No court can fix any limit in
respect of the age and condition of the building. That factor has to be r
F taken into consideration along with other factors and then a conclusion
one way or the other has to be arrived at by the Rent Controller."

We may refer to two decisions of Madras High Court. In S. Raju and
Ors v. K. Nathamani, (I 998) 3 L W 214, the Constitution Bench decision has
been followed and it has been held that when new buildings with modem
G amenities have come up in that locality, naturally the building in question may (
become unsuitable to the surroundings aud a liability, in its present condition,
to the landlord. Keeping the building in the same condition will amount to
asking the landlord to shoulder the burden for ever. Tenants may be satisfied
with the present state of the building since they have to pay only a nominal
H rent but the Rent Control Legislation, beneficial to the landlord and the tenant
R.V.E. VENKAT AC HA LA GOUNDER v. VENKA TESHA GUPTA [R.C. LAHOTI, J.J993

both, should be interpreted in that way. For the purpose of proving his bona A
tides the landlord need only show that he has got the capacity to raise the
necessary funds. In A.N. Srinivasa Thevar v. Sundarambal alias Prema Wlo.
Chandrakumar, (1995) 2 LW 14, even before the decision by Constitution
Bench in Vijay Singh 's case was available, it was held in the light of the
decision in P. Orr & Sons that the availability of the following factors was B
sufficient to make out a case of bona fide requirement tinder Section 14(1)
(b): "(a) Capacity of the landlord to demolish and to reconstruct is undisputed
and also proved satisfactorily; (b) The size of the existing building occupies
only one third of the site, leaving two third behind vacant and unutilized; (c)
Demand for additional space: The demised premises is situated in a busy
locality. Therefore, there is a great demand for additional space in the locality C
which could be met by demolishing the existing small building and putting up
a larger building providing for future development vertically also, by building
pucca terraced building; ( d) The economic advantage: A modern construction
of a larger building shall certainly yield better revenue and also appreciate in
value, when compared to the asbestos sheet roofed old building." In that case, D
it was observed that the existing building was an old, out-model asbestos sheet
building proposed to be replaced with better and modern building which would
provide for better quality accommodation to the needs of the present days as
the preservation of such building in a busy locality of a town shall not only
be an eyesore but also against the souring public demand for additional space.
Viewed from the angle of general interest of the public which, according to E
the decision in P. Orr & Sons is one of the considerations, it was observed
that a big site should yield to a larger modern building with an increased and
enlarged accommodation having better facilities to solve the ever increasing
demand for more space. Stalling growth and development for the sake of one
' tenant who is in occupation of an old model building constructed with mud p
and mortar and asbestos sheets occupying only one third of the site was held
to be not conducive to public interest. We approve the statement of law and
the approach adopted by the Madras High Court in both the abovesaid decisions.
The structural and physical features ana the nature of the construction of the
building cannot be ignored. Even in P. Orr & Sons, this Court was of the
opinion that various circumstances, such as the capacity of the landlord, size G
of the existing building, the demand for additional space, the condition of the
place, the economic advantage and other factors, justifying investment of
capital on reconstruction may be taken into account by the concerned authorities,
while considering the requirement for reconstruction of the building as the
essential and overriding consideration in the general interest of the public and H .
for the protection of the tenant from umeasonable eviction.
•}q
994 SUPREME COURT REPORTS [2002] 2 S~C.R.

A ·' · Reverting back:to'the case at hand, we find that the six tenants are not
ln'~full 'occupation.; of the entire space available.' The landlord proposes to
con'struct a new and modem building in busy commercial locality of a rising
city',_ The landlord requires a part of the newly constructed building for his
ow1f personal use and such part of the newly constructed building as would
' be in excess of his· own requirement he -is willing to let out at current rate of
B rerit to his tenants which would obviously augment his earnings. The newly
eonstriicted double ,storeyed building, would certainly provide much more
total accommodation than what is available. In such circumstances the offer
of the tenarit'that they are' prepared to pay the rent at the current rate, tlie one
whi~h 'th'e l~dlord dpect~ on reconstruction, becomes irrelevant and· should
d, not ·lia~e prevailed .\Vith the High Court.
"' " FOr the foregoing reasons, we are of the opinion that the High Court
ought not to have interfered with the decision of the appellate authority ..The
appeals are allowed. Judgment of the High Court. is set aside and that of the
appellate l authority .. restored: However; in view ·Of the time that has already
beeri lost in the' litigation and to protect the interest cif the tenants and certainly
tO allay.their fears, it is directed that the executing Court shall, before directing
the tenants to be evicted and possession being given to the landlord, direct the
lattdlord:to ;file"plans. of proposed ·construction, duly approved .by ,the local'.
authority;and ·give ·ari undertaking in terms of Section 14(2) (b) of the Act
' ~

E No ·order as to costs. ,
~-- J '":"-:-I~ j

N.J. ~ Appeals allowed.
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