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Demolition of building does not end tenancy - Supreme Court

The Supreme Court has held that destruction of a rented building does not end the lease as long as the land on which the building stood continues to exist. There was conflict of views in its earlier judgments about the continuation of the lease when the building itself was destroyed, for instance by natural calamities. One leading judgement stated that the tenancy ended with the destruction of the building. Another held that the lease of a building included the land on which it stood. Even if the building is destroyed or demolished, the lease does not end as long as the land beneath continued to exist. This latter view was upheld by the larger bench of the Supreme Court in the case, M/s. Shaha Ratansi Khimji & Sons Vs. Proposed Kumbhar Sons Hotel Pvt. Ltd. & Ors. In this case, the tenant of a godown in a plot of land was affected by the digging of basement for a hotel, which bought the land. He moved the civil court which held that his tenancy right had lapsed with the sale of the land to the hotel. The appellate court and the Bombay High Court dismissed his appeals. However, the Supreme Court set aside those judgments and ruled that the lease continued even after the sale of land because the interest of the tenant was not purchased by the hotel. In the facts of the case, the hotel was asked to pay Rs 20 lakh as compensation to the lessee of the godown.

Article referred: http://www.business-standard.com/article/opinion/demolition-of-building-does-not-end-tenancy-114080300735_1.html

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