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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5435 OF  2016 ( ARISING OUT OF S.L.P. (C) NO. 17214 OF 2013 )

SUDHAKARAN                                  … APPELLANT

VERSUS

CORP. OF TRIVANDRUM & ANR.                    ... RESPONDENTS

J U D G M E N T

ADARSH  KUMAR  GOEL,  J.

1.  This  appeal  has  been  preferred  against  the  judgment  and  order

passed by the High Court of Kerala at Ernakulam in W.A. No.356 of 2013

in C.W.P. No.9843 of 2011 dated 06.03.2013 whereby the High Court has

held  that  the  consent  of  the  owner  of  the  premises  is  necessary  for

renewal of tenant’s licence for running a hardware shop.

2.   Short question involved in this appeal is the interpretation of Section

492 (3) of the Kerala Municipality Act, 1994, which reads as under :  

“(3)  Where any person intending to obtain a licence or permission for the first time and where the applicant is a person other than the owner of the premises in question, he shall, along with the application produce the written consent of the owner of the premises and the period of the licence shall not exceed the period, if any, specified in the consent.”

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3.  Facts of the case are not in dispute.  Appellant is the tenant of suit

premises in Trivandrum District of Kerala since 01.06.2001.  He was

issued  a  licence  with  the  consent  of  the  landlord  to  run  hardware

business  on  22.10.2001  by  the  village  panchayat  in  question.   His

application for  renewal  was  rejected  on the  ground that  he  did  not

produce  consent  of  the  landlord.   But  the  Tribunal  for  Local  Self

Government  Institutions,  Thiruvananthapuram vide  order  dated  21st

March, 2011 upheld the plea of the appellant that the consent of the

landlord was required when applying for the first time.  Renewal cannot

be refused only on the ground that the fresh consent was not produced

by the statutory tenant.  A person once inducted as tenant continued

as statutory tenant by virtue of statutory provisions of Kerala Buildings

(Lease and Rent Control)  Act,  1965 till  the tenancy is  terminated in

accordance with law.  The operative order of the Tribunal is as follows :  

“15.  It  is to be noted in this context that the Revision Petitioner has not applied for a licence for the first time, I already said that the petitioner has been running the trade on the basis of a valid licence at least up to 31.3.2008. Under  Section  492(3)  of  the  Kerala  Municipality  Act,  a consent of the owner is needed only for obtaining licence for the first time.  Since the petitioner has not applied for licence for the first time the Corporation cannot impose a condition for obtaining a consent from the landlord.  The ground for rejection does not appeal to me.  

16.  It is to be noted that on expiry of the original lease period  the  petitioner  continues  as  a  statutory  tenant  or tenant holding over.  The Corporation cannot insist upon such a tenant for production of a written consent from the landlord  for  the  purpose  of  issuing  of  the  licence.   A statutory tenant can be evicted from the leased premises only in accordance with the various provisions contained in the Kerala Buildings (Lease and Rent Control) Act 1965. It appears that the Corporation is dancing to the tunes of

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the landlord or has become a puppet in the hands of the landlord in insisting for a consent.  It is quite evident and clear that landlord will never give consent.  The idea of the landlord is to see that the trade being conducted by the petitioner is stopped forever and he vacates the premises. With such a wicked idea the landlord is attempting to evict the petitioner not in accordance with the provisions of law but through indirect illegal means and unfortunately the Corporation has acted in a way actively aiding the said attempt.”   

4.   The above view was upheld by the learned Single Judge of the High

Court as follows :  

“2. It seems that a Rent Control Petition is pending before the  Rent  Controller  at  Trivandrum  for  evicting  the  2nd respondent and therefore the finding of the Tribunal is justified.   Apart  from that  there  is  no  provision  which requires an existing tenant,  to  obtain consent  from the landlord  every  time  renewal  application  is  filed.   This position is covered by the Division Bench judgment of this Court in Marimuthu v. Director General of Police (1999 (3) KLT 662).  That being the situation, I do not think that there  is  any  illegality  in  the  order  passed  by  the Tribunal.”   

5.  On  further  appeal  by  Respondent  No.2  –  Landlord,  the  Division

Bench took a contrary view and held that on expiry of the existing licence,

the  tenant  has to  seek a  fresh licence  for  which fresh consent  of  the

landlord was required.  It was observed :

“4. Validity  of  the  earlier  licence  undisputedly  was  till 31.3.2008.   Later,  renewal  was  sought  only  on 25.5.2009,  that  too  to  the President  of  the Panchayat. This  cannot  be  treated  as  a  proper  application  for renewal.   Subsequently,  on 10.8.2010 he filed a fresh application  for  licence,  therefore,  neither  letter  dated 25.5.2009 nor application dated 10.8.2010 was a proper application  for  renewal  of  the  earlier  licence  as contemplated under sub-section (5) of Section 492 of the Kerala Municipalities Act.  If the earlier licence comes to an  end  on  31.3.2008,  in  the  absence  of  making  a renewal  application  within  30  days  before  expiry  of

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validity of the existing licence, the tenant cannot get the benefit of renewal of licence and it has to be only a fresh licence.  Once it is a fresh licence, permission or consent of the landlord is required as indicated in sub-section (3) of Section 492 of the Kerala Municipalities Act.”   

6.   We have heard learned counsel for the parties.  Learned counsel for

the appellant submits that the view taken by the Division Bench of the

High  Court  is  patently  erroneous  and  is  contrary  to  the  statutory

provision referred to above.  The learned Single Judge has followed the

judgment  of  the earlier  Division Bench in  Marimuthu & Ors.  versus

D.G.P. & others  (1999 3 KLT 662).  The Division Bench failed to advert

to the earlier said judgment.  It is also pointed out that reference to clause

(5) of Section 492 in the judgment of the Division Bench appears to be

mistaken.

7. Learned counsel for the contesting respondent has supported the

view taken in the impugned judgment.

8. After due consideration of the issues involved, we find merit in the

submission made on  behalf  of  the  appellant.   The  statutory  provision

already quoted above shows that the requirement of consent of landlord is

applicable only when a person intends to obtain a licence for the first

time.  Renewal or subsequent application for obtaining licence on expiry of

the period of the existing licence, during the currency of the tenancy, is

not applicable for obtaining licence.  Even in the case of application for

obtaining  licence  for  the  first  time,  the  tenant  cannot  be  deprived  of

running  lawful  business  merely  because  the  landlord  withheld  the

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consent.   Valid tenancy itself  has implied authority of  the landlord for

legitimate use of the premises by the tenant.

9.  In  Marimuthu & Ors. (supra),   the Division Bench of  the High

Court observed :

“16. A statutory tenant under the Kerala Buildings (Lease and Rent Control) Act can be evicted only as per the  provisions  of  the  said  Act,  on  the  grounds enumerated therein. Since the possession of the tenant is lawful,  the  landlord  is  not  entitled  to  withhold  his consent  for  the  conduct  of  the  business  for  which  the premises were given on rent. In the instant case, we are satisfied  that  the  landlord  is  purposefully  and  with malafide  intention  withholding  consent  inspite  of  the directions from this court. Under such circumstances, the Corporation also cannot insist upon production of written consent from the landlord for the purpose of issuance of licence  for  the  conduct  of  business  in  the  premises  in question. For carrying on business in readymade dresses a licence issued under Sec.492 of the Kerala Municipality Act is necessary. As on date, the petitioner is not having any  licence  to  carry  on  such  business.  A  person  in occupation  can  be  allowed  to  carry  on  a  trade  or business which requires a licence,  only after  obtaining such licence. In view of the facts and circumstances of the  case  as  above,  we  direct  the  Corporation  of Thiruvananthapuram to  consider  Ext.P7  application  for licence without insisting upon the production of a written consent  of  the  owner  of  the  premises  and  pass appropriate  orders  after  giving  an  opportunity  to  the petitioners  or  their  representative  or  their  advocate, within  two  weeks  from  today.  The  petitioners  are  at liberty to file any further documents, if need be, before the Corporation authorities. The Corporation shall pass a reasoned order after hearing the necessary parties and communicate  the  same  to  the  petitioners  within  two weeks from today. We make it clear that till such time the petitioners shall  not conduct the textile business in the premises in question. Ext.P8 order of the Corporation of Thiruvananthapuram is set aside and Ext.P7 is restored to file for fresh consideration as directed above.”

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10. Thus, the view taken by the Tribunal and the learned Single Judge

is the correct understanding of the import of Section 492 (3) of the Kerala

Municipalities Act, 1994 (supra).  The Division Bench erred in interfering

with the said view.  

11. Accordingly, we allow this appeal, set aside the order of the Division

Bench and restore the order of the Tribunal as affirmed by the learned

Single Judge.     

………………………………………………J. ( V.  GOPALA GOWDA )

………………………………………………J. ( ADARSH KUMAR GOEL )

NEW DELHI;  JULY 05, 2016.