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UPES

SCHOOL OF LAW

SEMESTER V
TRANSFER OF PROPERTY LAW

CASE ANALYSIS

Under the Supervision of: Dr. Shikha Dimri

NAME: DIGVIJAY SINGH


SAP NO: 500053198
ROLL NO: R154216040
Supreme General Films Exchange v Brijnath
Singh Deo, AIR 1975 SC 1810

FACTS:-
The plaintiff-respondent was a mortgagee in respect of a cinema theatre of which the appellant
claimed to be a lessee in occupation. A compromise decree was passed on 7th May, 1960 in the
suit filed by the plaintiff-respondent against the mortgagor be which it was agreed that the
amounts due would be released by the sale of the theatre. The Central Bank of India, another
creditor of the mortgagor, assigned its rights under the decree to the plaintiff-respondent. The
theatre was attached in the course of the execution of the decree. The original lease of 1940
which the appellant company had entered into, expired in 1946 but the company continued as a
tenant holding over until the impugned lease deed of 1956 was executed. The appellant company
filed a suit in 1954 for the specific Performance of the agreement to lease. The lease deed of
1956 purported to carry out the terms of that compromise decree. In this suit the plaintiff-
respondent was not impleaded as a party. The plaintiff-respondent claimed that the lease of 1956
was void as it was struck by ss. 52 and 65A of the Transfer of Property Act and s. 64 of the Code
of Civil Procedure. The appellant company on the other hand, claimed that a suit of the nature
filed by the plaintiff respondent did not lie as it fell outside the purview of s. 42 of the Specific
Relief Act, 1877. The trial court decreed the plaintiff-respondent’s suit. The appellant’s appeal
was dismissed by the High Court.

ISSUE:-
Whether declaratory relief can be granted outside the ambit of Section 42 of the Specific Relief
Act, 1877?

ANALYSIS:
The circumstances in which a declaratory decree under Section 42 should be awarded is a matter
of the discretion depending upon the facts of each case. No doubt a complete stranger whose
interest is not affected by another’s legal character or who has no interest in another’s property
could not get a declaration under Section 42 Specific Relief Act with reference to the legal
character or the property involved. Such, however, is not the present case. IN the present case the
plaintiff-respondent had not only the rights of a mortgagee decree-holder with regard to the
property involved, but he was also the assignee of the rights of the Bank which had got the
property in question attached in execution of its decree. From connected special leave petitions
against orders u/O. 21, Rule 95, Civil Procedure Code it is found that the plaintiff’s wife became
the auction purchaser of this property during the pendency of the litigation now before the court.
At the time when he filed the suit the plaintiff may have been looking forward to purchasing the
property. Although, the mere possibility of future rights of an intending purchaser could not, by
itself be enough to entitle him to get a declaration relating to a purported lease affecting the right
to possess and enjoy the property.1 Yet, Court was of the opinion that the plaintiff possessed
sufficient legal interest in the theatre, as a mortgagee as well as an assignee of a decree holder
who had got the property attached before he filed his suit, so as to enable him to sue for the
declarations he sought. He was not seeking a merely whimsical or eccentric or an unreasonable
declaration of a right in property with no enforceable legal claims over it which could remain
unaffected by the defendant appellant’s claims as a lessee.

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V.R Sudhakara Rao v T.N Kameshwari
(2007) 6SCC 650

FACTS:-

One Thangirala Venkata Avadhani filed O.S.No.131/82 for recovery of possession of the plaint
schedule property after evicting the defendants and for the relief of permanent injunction and
O.S.No.350/82 was filed by one Sudhakar Rao against Thangirala Venkata Avadhani and certain
others for the relief of specific performance of an oral agreement of sale relating to the plaint
schedule property. The said Thangirala Venkata Avadhani died during the pendency of the said
suits. T.A.Kameswari, the appellant in both appeals before the High Court, had been brought on
record as the legal representatives of the said Venkata Avadhani. In O.S.No.131/82 the said
Venkata Avadhani as plaintiff had pleaded that the staff of Andhra University formed a Co-
operative Society. The said Society purchased from her Highness Janaki Ratnayammajee. CBE,
Dowager Rani Saheba of Gangapur Ac.8.80 cents forming part of T.S. No.125 (part) of Waltair
Ward in Visakhapatnam Municipality. The said Society allotted a plot to the 1st plaintiff, i.e.
Plot No.30, in the said lay-out by means of a registered sale deed dated 30.11.1967 and delivered
possession. To the South of the Plot No.30 there is Plot No.31. The 1st plaintiff came to learn
that the defendants purchased this plot. In the plot purchased by the defendants they constructed
building. While constructing the said building, as their plot was having road on three sides, they
requested the 1st plaintiff for permission to stock their sand, stone and granite and bricks in the
site of the plaintiff and as the site of the 1st plaintiff was vacant he said no objection and in utter
good faith he gave the said permission. Suddenly on the evening of 10.5.1982, the 1st plaintiff
was informed that the defendants were constructing a compound wail on the East and West of
the 1st plaintiff's plot No.30. He also found that the foundations were dug and the stone was laid
in the foundation both on Eastern side and Western side. On the early morning he immediately
gave a report to the III Town Police Station. Along with the 1st plaintiff a police constable came
and the 1st plaintiff found that the Eastern compound wall was completed and in the Western
compound wall the construction with bricks was started on the basement raised on 10th May,
1982. The police informed them not to do any construction but later they began construction
even in spite of the police warnings. The plaintiff never sold the site nor agreed to sell the same
to anybodys including the defendants. He is absolute owner of the property.
ISSUE:-

1 Whether the plaintiff is entitled to possession'?

2 Whether the plaintiff is entitled to prohibitory and mandatory injunction as prayed for?

3. To what future damages, if any, and at what rate the plaintiff is entitled to?

4. Whether the suit is bad for non-joinder of necessary parties?

5. Whether the plaintiff is estopped?

6. To what relief?

ANALYSIS:

Plaintiff's grandmother Manga Tayaramma wanted to acquire two house plots at Visakhapatnam
and requested her son-in-law to arrange the purchase of the same for the construction of house at
Visakhapatnam. Consequently, plaintiff's father approached the 1st defendant on behalf of
Manga Tayararnma. The 1st defendant agreed to sell the schedule site at Rs.651/- per sq. yard
and for a total consideration of Rs.42,575/-. The said oral agreement of sale was entered into
between the 1st defendant and the plaintiff's maternal grandmother in the first week of November
1979 at the Ist defendant's residence in Visakhapatnam. At the time of oral agreement, Sri. I.B.V.
Narasimharao paid an amount of Rs.16,575/- to the 1st defendant towards portion of the sale
consideration on behalf of vendee Manga Tayaramma in the presence of Sri Rao Venkatarama
Narasimharao. After the death of Manga Tayaramma plaintiff as legatee has been in possession
of the site as per the will executed by her on 15.4.1980. After receiving the said amount of
Rs.16,575/-, the Ist defendant at the time of the said agreement of sale noted down on a piece of
paper and calculated the total sale consideration for 655 sq. yards at Rs.65/- per sq. yard and
arrived at the figure of Rs.42,275/-. He wrote the name of the vendees' agent and son-in-law as
'1.Narasimharao' on the top of the said slip of paper and he also noted the sale consideration at
the rate of Rs.40/- per sq.yard. As per the terms of the said agreement of sale, it was also agreed
that the vendee Manga Tayaramma should obtain a demand draft for the balance of sale
consideration of Rs.26,000/- in favor of the Ist defendant and the defendant should obtain the
required permission from the urban ceiling authority and execute the registered sale deed within
about a week after the said oral agreement of sale. It was further agreed that the said demand
draft should be handed over to the defendant at the time of the registration of the sale deed. In
pursuance of the said agreement of sale, Manga Tayaramma obtained a demand draft for an
amount of Rs.25,000/- in favor of the Ist defendant on 3.12.1979. The defendant stated that he
did not obtain the permission as yet that it would take some time and promised to execute and
register the sale deed as soon as the permission is obtained. Plaintiff also pleaded that on
10.12.1979, I.B.V. Narasimharao on behalf of late Manga Tayaramma purchased plot No.31
which is situate to the South of the schedule plot and the said Tayaramma took possession of the
same. The Ist defendant filed suit O.S. No. 131/82 against the plaintiff and others completely
denying the agreement of sale. Since the Ist defendant came forward with a false case denying
the agreement of sale in its entirety, the plaintiff filed this suit.

First it would be necessary to deal with the effect of Section 53(A) of the T.P. Act. It is fairly
accepted that in the case of an oral agreement of sale the defense under Section 53(A) of the TP
Act is not available to a party who alleges to be in possession of the property. 2

The High Court has rightly concluded that there is no clear proof relating to the other terms of
condition. The relief of specific performance is discretionary relief and except the oral evidence,
there is no clear evidence to prove several of the essential terms which have been taken note of
by the High Court. The High Court, on analyzing the evidence, has come to hold that except
Exhibit B-1 and the oral evidence of DW 1 and DW2, there is no other clear proof relating to the
other terms and conditions of the contract which can be termed as essential conditions like
delivery of possession and also the obtaining of permission from the Urban Land Ceiling
Authorities and therefore, it cannot be said that all the essential terms and conditions of a well
concluded contract had been established in the case at hand.

These conclusions on fact do not appear to be in any way unsustainable and on the other hand are
in line with the applicable legal principles. That being so, the appeals are sans merit, deserve
dismissal which we direct. No costs.

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Ram Nath v Baij Nath, AIR 2005 MP 229

FACTS:-

The plaintiffs filed the present suit for redemption of mortgage alleging that they are the
Bhumiswamis of an agricultural land bearing Survey No. 663/1, having an area of one bigha
and fifteen biswas situated in Village Agrauta, Tehsil Joura, District Morena. The land was
initially owned by one Angad and the present plaintiffs are his heirs. Angad died in October,
1969. The plaintiffs required a loan for performing last rites of deceased Angad, therefore,
they approached defendant No. 1 Ram Nath, for loan. On 18-12-1969 a sale-deed, Ex. P-1
was executed by plaintiff No. 1, Baijnath in favor of Ram Nath. The sale deed was executed
on his own behalf as well as on behalf of minors. In the said document it was also agreed that
if the plaintiffs repay the amount of Rs. 1750.00 within a period of two years then the
property will be reconveyed to the plaintiffs. The possession of the property was also handed
over the defendant as mortgagee and thus a usufructuary mortgage was created. It was agreed
that the mortgagee shall have no right to get his name mutated. It is also alleged that the
plaintiffs have repaid the amount of Rs. 1750.00 and, therefore, they are entitled for
redemption. However, the defendant instead of reconvening the property has filed
proceedings for mutation against the said property which was opposed. Ultimately, the
matter went up to the Board of Revenue and the objections of the plaintiffs were rejected and
the name of the defendant was mutated.

The defendant filed his written statement alleging that the transaction in question was not a
mortgage but was of a sale with a condition to reconvey the property within a period of two
years and as the plaintiffs have failed to repay the amount within a period of two years, the
plaintiffs have lost their title to the suit property. It is also alleged in the alternative that even
if the property was mortgaged it was for a period of two years and in case the amount is
repaid within two years the possession of the plaintiffs after expiry of two years has become
hostile. It is also alleged that the suit which is filed for possession on 30-7-1991 has become
barred by limitation.

ISSUE:-

(1) Whether the findings of the First Appellate Court holding that the deed in question was
in fact a mortgage against the law laid down by the Supreme Court in the case?
(2) Whether the provisions of Section 91 of the Evidence Act were not considered by the
First Appellate Court while holding the alleged deed dated 18-12-69 as mortgage ?

(3) Whether the suit filed by the plaintiff was beyond limitation and was liable to be
dismissed on that ground?

ANALYSIS:

The nature of possession of the mortgagee after automatic redemption and whether Article 64 or
65 of the Limitation Act will be applicable in the present case. Article 64 of the Limitation
Act applies where the suit is filed merely on the basis of dispossession while Article 65 is
applicable when the suit is filed for possession on the basis of title. In the present case plaintiffs
in para one of the plaint have alleged that they are the title holder of the suit property. They have
also alleged in the plaint that being the owners they are entitled to possession of the suit land. In
such circumstances, in my view of the suit will be governed by Article 65 of the Limitation
Act and, therefore, unless and until it is not held that the defendant has acquired right to the suit
property by way of adverse possession or his possession is hostile to that of plaintiffs the suit
cannot be said to be barred by limitation. It is a settled principle of law that once a mortgage is
always mortgage and the possession of the mortgagee will always remains that of a mortgagee
even though the property is redeemed in the year 1975 or in the year 1971 as alleged by the
defendant due to applicability of Section 165(2)(a) of the M.P. Land Revenue Code, still his
possession shall be of mortgagee's and, therefore, his possession cannot be said to be hostile.

14. Counsel for the appellant submits that he has claimed hostile title by filing an application for
mutation. From the perusal of the order, Ex. P-2 which was passed by Tehsildar shows that the
application for mutation was filed sometime in the year 1983-84 as the number of case itself is
273/6/83-84. The order, Ex. P-2 is passed on 7-3-86. This shows that the defendant has started
claiming title openly and in the knowledge of the plaintiffs first time in the year 1983. The
present suit is filed in the year 1991, i.e., within twelve years of the denial of the plaintiffs' title
by the defendant. Thus, it cannot be said that in the present case that the defendant has acquired
the title by way of adverse possession. The Apex Court in the case of Virendra Nath
through P.A. Holder R.R. Gupta v. Mohd. Jamil and Ors3., , has laid down that after a mortgagee
who is in possession of the property on the basis of unregistered mortgage deed which is not
admissible in evidence, his possession continues to be that of a mortgagee and not adverse
possession to the of mortgagor. In view of the aforesaid judgment I find that present appeal is

3 4007 of 1999
without any merit. The possession of the defendant still continues as that of a mortgagee and
adverse to that of a plaintiff and the suit is within limitation.4

Quality cut pieces v Laxmi & Co. AIR 1986


Bom 359

FACTS:-

A group of seven businessmen drawn from various fields like pharmaceuticals, textiles, tea,
banking and insurance got together and surveyed the Indian economic scene. They had a
vision of a possible cooperation of Indian and foreign entrepreneurs in the field of supply of
essential commodities for civilian consumption -- something which was very much relegated
to the background by the more pressing need to keep the sinews of war flowing. They
envisaged a free-flow of goods and merchandise -- once the sea routes became open; took
note of the fact that manufacturers in western countries had at their disposal large
departmental chain stores to handle goods direct from the factory to the consumer and
managed country-wide distribution system. This group regretted the absence of a similar
large scale departmental store in India and decided to remedy the defect and build up a co-
ordinated contact between the producer and consumer. With this object in view, the group
incorporated a company "Departmental Service Stores Limited" The Examiner of Capital
Issues permitted the company to issue further shares of capital of the value of Rs. 8,30,000/-.
The signatories to the Memorandum and Articles of Association, the Directors, Managing
Agents and their friends agreed to take a bulk of the new issue and remainder was offered for
public subscription. Messrs. Begman Traders Ltd. of 41, Bruce Street, Fort, Bombay, were
the Managing Agents of the company and Bagayatkar and Manjrekar of Bombay were ex-
officio Directors nominated by the Managing Agents. The Prospectus issued by the company
inviting subscription from the public, after taking a note of the possible increase in
international trade on account of the opening of free sea routes, announced that the DSS will
inaugurate a new era of "Shop as you please" under one roof and thereby obviate the
necessity of standing in long queues and hunting for different goods and shops situated in far
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flung localities. The ambitious prospectus projected a picture of a store where a person can
buy all his needs "from a pin to a piano" and that too with home delivery facilities. Twelve
Departments were enumerated as being the ones which would be immediately opened in the
stores and it was indicated that the DSS would further diversify their activities into thirty
more Departments ranging from motor-cars, engineering goods, type writers, jewelry to
flower.

ISSUE:-

1) Whether they are entitled to a commission over and above the minimum agreed upon.

2) Whether the plaintiff is estopped?

ANALYSIS:

A feeble attempt has been made by the defendants-stall-holders to challenge the title of
Laxmi to the suit premises and this has been countered by Laxmi pleading that the stall-
holders are estopped from doing so. As, neither Ashar, nor DSS, nor Shah Brothers, nor
Ramniklal are parties to the present proceedings, and as the suits are simple money suits it is
obvious that no final adjudication can be made regarding the question of title of Laxmi to the
suit premises in these proceedings. That belongs to this Court on its Original Side where a
title suit is pending.

Under the first lease Exh. "1", dt. 5th July, 1948, DSS, the Lessees, had acquired an interest
in the premises for a term of 10 years computed from 1st June 1946 to 31st May 1956 with
an option of one renewal. This option was exercised both by DSS and by Ramniklal. This
position was accepted by Ashar in Exhibits "Z-173' and "Z-58". In Exhibit "Z-186" dt. 6th
Sept. 1955 Mulla have referred to the letters dt. 1st and 2nd Aug. 1955 by which Ramniklal
had purported to exercise option for the renewal of the lease. It is another matter that Mulla
pointed out that rent has not been paid regularly at the rate of Rs. 100/-per month. On 6th
Sept. 1960 that is much after the first period of 10 years was over, the Solicitors of Ashar
accused DSS of having committed breaches of certain covenants of the lease and purported
to terminate the same.

On 31st May 1956 the 20 year period under the original Lease Deed expired. Admittedly, a
registered Conveyance for the second 10 year period was not executed, but the exchange of
letters, as respects the renewal, would be admissible under the Proviso to Section 49 of the
Registration Act for a collateral purpose of showing the nature and character of possession of
Laxmi. Satish Chand Nakhan v. Govardhan Das Byas5, . As Laxmi held over and continued
in possession by paying rent, the holding over must be held as a tenancy from month to
month. The rent was being received from Ramniklal but the receipts were being given in the
name of DSS. The possession of Ramniklal and Laxmi was a juridical one and Ramniklal
and Laxmi being persons in juridical possession of the premises, had entered into a contract
of licence permitting the stall-owners to use the premises for display and sale of their goods
in return for a commission computed on the basis of an agreed percentage of the gross sales.
Even before coming into force of the Indian Evidence Act, 1872, this High Court has been
following the principle of tenant estoppel. In Vasudev Daji v. Babaji Ranu, (1871) 8 Bom
HCR 175, the Court held that a tenant cannot ordinarily dispute the title of his landlord in a
suit brought against him for recovery of possession if the existence of a tenancy is
established by the fact of the tenant's payment of rent to his landlord or otherwise.

Equitable Estate. Though Laxmi had exercised its right of renewal and the paramount
landlord Ashar had agreed to grant the request, the conveyance was not registered as was
contemplated by the original lease deed. Counsel for the Appellants argued that in the
absence of a registered deed, the purported renewal for a fresh period of 10 years is
ineffective and neither Ramniklal nor Laxmi could act as landlords and induct the appellants
into the premises either as tenants or as licensees. As observed earlier, the principle of tenant
estoppel is wider than that governed by the ambit of Section 116 of the Evidence Act and the
absence of a registered lease deed for the renewed period would make no difference as
regards the bar of estoppel against the appellants. In Industrial Properties (Barton Hill) Ltd.
v. Associated Electrical Industries Ltd., (1977) 1 QB 580 (CA) though the purchase price
was paid pursuant to an agreement to sell the freehold of an industrial estate, no conveyance
of the property was made in order to save stamp duty and the premises were leased out to
A.E.I. The landlord filed a suit claiming damages against A.E.I. for breach of covenant to
repair the premises and the lessees who by then had discovered the defect in the title of the
landlord, challenged the maintainability of the suit for damages. Holding that the landlords
have become equitable owners of the premises, the Court found that the tenants are estopped
from challenging the landlords' equitable title, and that this rule of estoppel continued to
operate after the expiry of the lease unless, after the termination of the lessee's possession a
claim was made against him by a title paramount in respect of some part of the period of the
lease.

When a valid contract of tenancy had been created between the parties, the tenant would be
estopped under the contract even though it might be that some other person, for example, the
reminder man or a mortgagee might be able to assert some title paramount against the tenant
5
AIR 1984 SC 143, 1998 (6) SCALE 49, (1984) 1 SCC 369
who had been given, as between himself and his landlord, a perfectly valid tenancy. Stratford
v. Syrett,.6

Consequently it is obvious that the stallholders having been inducted into the premises by
Laxmi the equitable owners - are estopped from challenging its title.7

Associated Hotels of India v R.N.Kapoor AIR


1959 SC 1262

FACTS:-

The appellants, the Associated Hotels of India Ltd., are the proprietors of Hotel Imperial, New
Delhi. The respondent, R. N. Kapoor, since deceased, was in occupation of two rooms described
as ladies’ and gentlemen’s cloak GL rooms, and carried on his business as a hairdresser. He
secured possession of the said rooms under a deed dated 1-5-1949, executed by him and the
appellants. He got into possession of the said rooms, agreeing to pay a sum of Rs. 9,600 a year,
i.e. Rs. 800 per month, but later on, by mutual consent, the annual payment was reduced to Rs.
8,400, i.e. Rs. 700 per month. On 269-1950, the respondent made an application to the Rent
Controller, Delhi, alleging that the rent demanded was excessive and therefore a fair rent might
be fixed under the Delhi and Ajmer-Merwara Rent Control Act, 1947. The appellants appeared
before the Rent Controller and contended that the Act had no application to the premises in
question as they were premises in a hotel exempted under S. 2 of the Act from its operation, and
also on the ground that under the aforesaid document the respondent was not a tenant but only a
licensee. By order dated 24-10-1950, the Rent Controller held that the exemption under S. 2 of
the Act related only to residential rooms in a hotel and therefore the Act applied to the premises
in question. On appeal the District Judge, Delhi, came to a contrary conclusion; he was of the
view that the rooms in question were rooms in a hotel within the meaning of S. 2 of the Act and

6
(1958) 1 QB 107
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therefore the Act had no application to the present case. Further on a construction of the said
document, he held that the appellants only permitted the respondent to use the said two rooms in
the hotel, and, therefore, the transaction between the parties was not a lease but a licence. On the
basis of the aforesaid two findings, he came to the conclusion that the Rent Controller had no
jurisdiction to fix a fair rent for the premises. The respondent preferred a revision against the said
order of the District Judge to the High Court of Punjab at Shimla, and Khosla, J., held that the
said premises were not rooms in a hotel within the meaning of S. 2 of the Act and that the
document executed between the parties created a lease and not a licence. On those findings, he
set aside the decree of the learned District Judge and restored the order of the Rent Controller.
The present appeal was filed in this Court by special leave granted to the appellants on 18-1-
1954.

FACTS:

1) To ascertain whether a document creates a licence or lease, the substance of the


document must be preferred to the form;
2) The real test is the intention of the parties - whether they intended to create a lease or
a licence;
3) If the document creates an interest in the property, it is a lease; but, if it only permits
another to make use of the property, of which the legal possession continues with the
owner, it is a licence;
4) If under the document a party gets exclusive possession of the property, prima facie,
he is considered to be a tenant; but circumstances may be established which negative
the intention to create a lease.8

ANALYSIS:

The solitary circumstance that the rooms let out in the present case are situated in a building
wherein a hotel is run cannot make any difference in the character of the holding. The intention
of the parties is clearly manifest, and the clever phraseology used or the ingenuity of the
document writer hardly conceals the real intent. I, therefore, hold that under the document there
was transfer of a right to enjoy the two rooms, and, therefore, it created a tenancy in favor of the
respondent. What is the construction of the words “a room in a hotel”? The object of the Act as
disclosed in the preamble is “to provide for the control of rents and evictions and for the lease to
Government of premises upon their becoming vacant, in certain areas in the Provinces of Delhi
and Ajmer-Merwara”. The Act was, therefore, passed to control exorbitant rents of buildings
prevailing in the said States. But S. 2 exempts a room in a hotel from the operation of the Act.
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A.M.
The reason for the exemption may be to encourage running of hotels in the cities, or it may be for
other reasons. Whatever may be the object of the Act, the scope of the exemption cannot be
enlarged so as to limit the operation of the Act. The exemption from the Act is only in respect of
a room in a hotel. The collocation of the words brings out the characteristics of the exempted
room. The room is part of a hotel. It partakes its character and does not cease to be one after it is
let out. It is, therefore, necessary to ascertain the meaning of the word “hotel”. The word “hotel”
is not defined in the Act. A hotel in common parlance means a place where a proprietor makes it
his business to furnish food or lodging or both to travellers or other persons. A building cannot
be run as a hotel unless services necessary for the comfortable stay of lodgers and boarders are
maintained. Services so maintained vary with the standard of the hotel and the class of persons to
which it caters; but the amenities must have relation to the hotel business. Provisions for heating
or lighting, supply of hot water, sanitary arrangements, sleeping facilities and such others are
some of the amenities a hotel offers to its constituents. But every amenity however remote and
unconnected with the business of a hotel cannot be described as service in a hotel. The idea of a
hotel can be better clarified by illustration than by definition and by giving examples of what is a
room in a hotel and also what is not a room in a hotel: (1) A owns a building in a part whereof he
runs a hotel but leases out a room to B in the part of the building not used as hotel; (2) A runs a
hotel in the entire building but lets out a room to B for a purpose unconnected with the hotel
business; (3) A runs a hotel in the entire building and lets out a room to B for carrying on his
business different from that of a hotel, though incidentally the inmates of the hotel take
advantage of it because of its proximity; (4) A lets out a room in such a building to another with
an express condition that he should cater only to the needs of the inmates of the hotel; and (5) A
lets out a room in a hotel to a lodger, who can command all the services and amenities of a hotel.
In the first illustration, the room has never been a part of a hotel though it is part of a building
where a hotel is run. In the second, though a room was once part of a hotel, it ceased to be one,
for it has been let out for a non-hotel purpose. In the fifth, it is let out as part of a hotel, and,
therefore, it is definitely a room in a hotel. In the fourth, the room may still continue as part of
the hotel as it is let out to provide an amenity or service connected with the hotel. But to extend
the scope of the words to the third illustration is to obliterate the distinction between a room in a
hotel and a room in any other building. If a room in a building, which is not a hotel but situated
near a hotel, is let out to a tenant to carry on his business of a hairdresser, it is not exempted from
the operation of the Act. But if the argument of the appellants be accepted, if a similar room in a
building, wherein a hotel is situated is let out for a similar purpose, it would be exempted. In
either case, the tenant is put in exclusive possession of the room and he is entitled to carry on his
business without any reference to the activities of the hotel. Can it be said that there is any
reasonable nexus between the business of the tenant and that of the hotel. The only thing that can
be said is that a lodger in a hotel building can step into the saloon to have a shave or haircut. So
too, he can do so in the case of a saloon in the neighbouring house. The tenant is not bound by
the contract to give any preferential treatment to the lodger. He may take his turn along with
others, and when he is served, he is served not in his capacity as a lodger but as one of the
general customers. What is more, under the document the tenant is not even bound to carry on
the business of a hairdresser. His only liability is to pay the stipulated amount to the landlord.
The room, therefore, for the purpose of the Act, ceases to be a part of the hotel and becomes a
place of business of the respondent. As the rooms in question were not let out as part of a hotel
or for hotel purposes, I must hold that they are not rooms in a hotel within the meaning of S. 2 of
the Act.9

9
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visit- 05/ 11/2018, 01:50 A.M.