Statutory tenant cannot seek repossession after demolition of building under Transfer of Property Act

In Abdul Khuddus v. H.m. Chandiramani (dead) Thr Lrs. & Ors, the appellant herein filed an ejectment petition seeking ejectment of the plaintiff under Section 21(1)(j) of the Rent Act on the ground that the premises were required for bonafide use by the landlord for the immediate purpose of demolishing them and erecting a new building in place of the premises sought to be demolished.

The ejection was challenged by the tenant and after various rounds of litigation, the Municipal Corporation demolished the building as they found it to be dilapidated and dangerous and subsequently handed over the vacant land to the owners.

The tenant filed appeal before the High Court against the demolition and the High Court allowed the appeal holding 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. The Corporation and the appellant were therefore directed to restore the possession within two months of a shop comparable in size and form in the built portion of the suit property.

On appeal the Supreme Court held that the judgment and decree of the High Court cannot be sustained. The argument of the plaintiff was 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. Thus, the plaintiff was entitled to equivalent size of shop in the building which has been constructed on the land of which the Plaintiff was a tenant on the first floor. Reliance has been placed on judgment of this Court in Shaha Ratansi Khimji wherein the godown in possession of the tenant was demolished.

A perusal of the judgment in Vannattankandy Ibrayi v. Kunhabdulla Hajee (2001) 1 SCC 564, shows that this Court noticed that there are two categories of tenants namely, a tenant under the TP Act and the other under the State Rent Laws. There is no assertion that the property in question in the said case was governed by State Rent Laws. It was a case where the owner started digging a ditch towards the northern side wall of the suit property. During the rainy season, the water used to get accumulated in the said ditch and that the owner closed the access road to the said property. It was also alleged that the owner went ahead with destruction of the godown and demolished the western wall of the godown. The judgment does not deal with statutory tenant protected by a particular statute but with the principles of a contractual tenancy in terms of Section 108(B) (e) of the TP Act.  ......there is no doubt that if a building is governed by the State Rent Act the tenant cannot claim benefit of the provisions of Sections 106, 108 and 114 of the Act.

A Seven Judge Bench in the judgment reported as V. Dhanpal Chettiar v. Yesodai Ammal (1979) 4 SCC 214 was examining a question as to whether a statutory tenant is entitled to notice of termination of tenancy contemplated by Section 106 of the TP Act or not. It was held that since statutory tenant is entitled to protection under the Rent Act, therefore, the procedure prescribed under the TP Act would not be applicable.

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.