M/S SHAHA RATANSI KHIMJI & SONSversusPROPOSED KUMBHAR SONS HOTEL P. LTD. & ORS.

                 [2014) 6 S.C.R. 1101


          M/S SHAHA RATANSI KHIMJI & SONS                        A
                              v.
 PROPOSED KUMBHAR SONS HOTEL P. LTD. & ORS.
        (CIVIL APPEAL N0.127 OF 2007)
                       JULY 10, 2014.                             B
         [R.M.LODHA, CJI, SUDHANSU JYOTI
       MUKHOPADHAYA AND DIPAK MISRA, JJ.]

     Transfer of Property Act, 1882: ss.105, 108, 111 - Held:
A lease of immovable .property is a transfer of right to enjoy C
such property in -consideration of price paid as per s. 105 of
the T.P. Act - By way of lease, a right and interest is creat~d
which stands transferred in favour of the lessee - The
immovable property, thereafter, only can be reverted back on
detennination of such right and interest in accordance with the D
provisions of the T.R. Act - Therefore, once the right of lease
is transferred in favour of the lessee, the des~ruction of a
house/building constructed on the lease property does not
detennine the tenancy rights of occupant which is incidental
to the contract of the lease which continues to exist between E
the parties - In the instant case, respondent purchased the
lessor's interest - Lease continued even thereafter and did not
extinguish - The lease was subsisting when the shares of the
land were purchased by the respondent - But the interest of
the lessee was not purchased by the respondent - Demolition F
and destruction of the tenanted premises - Tenancy of the
appellant cannot be said. to have been determined
consequent upon demolition of the tenanted premises - High
Court wrongly held that tenancy rights of appellant had lapsed
- However, taking into considef"{ltion the fact that the appellant G
has not been in possession of the suit property since long,
restoration of possession of suit property to the appellant is
not directed - Instead respondent is directed to pay a sum of
Rs. 20,00,0001- in favour of the appellant towards
                           1101                                   H
    1102    SUPREME COURT REPORTS                 (2014] 6 S.C.R.


A compensation for depriving him from erjoying the suit
  property - Lease.        ·

       Lease: Destruction of leased building - Status of lessee
  - Held: When there is a lease of a house or a shop it cannot
8 be treated as a. lease of structure but also a lease of .site -
  Once a tenancy is created in respect of a building standing
  on the land it is the building and the land which are both
  components of the subject-matter of demise and the
  destruction of the building alone does not determine the
  tenancy when the land which is the site of the building
C continues to exist - This interpretation, is in accord with s. 1OB
  of the TP Act - Transfer of Property Act, 1882        ·

        The appellant had taken a godown over the southern
    portion of the suit property on rent and was using the
D   access on eastern side of ·the godown for approaching
    the municipal road and in bringing its goods to the
    godown. The owner of the northern portion of the suit
    property sold his portion to the respondent. The
    respondent demolishea the construction existing over
E   his portion and started digging for basement. Later on,
    the respondent purchased the southern portion of the
    suit property also. The case of the appellant that the
    digging work exposed the base of the godown to the
    vagaries of nature.During the rainy season, water got
F   aceumulated in the said .ditch and entire structure of
    godown was threatened. When the appellant inquired the
    respondent about the same, the respondent asked the
    appellant to vacate the godown. The respondent also
    threatened the workers of the appellant. Therefore,
G   according to the appellant, the excavation made by the
    respondent was intentional and directed towards
    terminating the tenancy of the appellant by adopting
    dubious methods. It was also alleged that the respondent
    also closed the access road to the suit property. Thus,
H   the appellant was unable to keep its goods in or take out
  SHAHA RATANSI KHIMJI & SONS v. PROPOSED KUMBHAR    1103
                 SONS HOTEL P. LTD.

its goods from the suit property, causing irreparable loss   A
to the appellant.

    The appellant filed a suit with a prayer that the
respondent be restrained from closing the access of the
appellant to the suit property from the municipal road and   e.
digging in a manner which would cause damage to the
godown. The civil court dismissed the suit. The first
appellate court upheld the decision of the civil court. By
impugned judgment, the High Court dismissed the
second appeal on the ground that the tenancy right of the    C
appellant had lapsed. The instant appeal was filed
challenging the order of the High Court.

    On 5th January, 2007, the matter on reference came
up before the Bench of Three Judges in view of
inconsistency in the view taken in *Vannattankendy lbrayi    D
case and **T. Lakshmipathl case.

     In the case of *Vannattankandy lbrayi, this Court
formulated two questions for consideration: (a) Whether ·,
the tenancy in respect of the premises governed by the E
Kerala Buildings (Lease and Rent Control) Act is
extinguished by destruction of the subject-matter of
tenancy i.e. the premises by natural calamities, and (b) On
the destruction of property whether the civil court has
jurisdiction to entertain and try the suit for recovery of F
possession of land brought by the landlord. Both
questions were answered in the affirmative.

     In Lakshmipathi, this Court held that lease of a
building includes, the land on which the building stands.
So even if the building is destroyed or demolished, the      G
lea:;e is not determined as long as the land beneath it
continues to exist. Doctrine of frustration cannot be
invoked on destruction or demolition of a building under
lease where not only privity of contract but privily of
estate is also created.                                      H
    1104   SUPREME COURT REPORTS              [2014] 6 S.C.R.


A      Allowing the appeal, the Court

       HELD: 1. Immovable property means landed property
  and may include structures embedded in the earth such
  as walls or buildings for the permanent beneficial
  enjoyment. A lease of immovable property is a transfer
8
  of right to enjoy such property in consideration of price
  paid as per Section 105 of the T.P. Act. By way of lease,
  a right and interest is created which stands transferred
  in favour of the lessee. The immovable property,
  thereafter, only can be reverted back on determination of
C such right and interest in accordance with the provisions
  of the T.P. Act. Therefore, once the right of lease is
  transferred in favour of the lessee, the destruction of a
  house/building constructed on the lease property does
  not determine the tenancy rights of occupant which is
D incidental to the contract of the lease which continues to
  exist between the parties. [Para 22] [1114-C-F]

       2. Section 108 postulates the rights and liabilities of
  lessor and lessee. If a right is not conferred by the Statute
E on the lessor for determination, except one exception
  which is clearly stipulated there in Section 108 (B) (e) by
  the Legislature; it would not be permissible for the Court
  to add another ground of the base or fulcrum of ethicality,
  difficulty or assumed supposition. The singular exception
F that has been carved out is the wrongful act or default
  on the part of the lessee which results in the injury to the
  property that denies the benefit. In all other circumstances
  which find mention under Section 111 of the Act, are the
  grounds for determination of the lease. This is the
  plainest construction of the provision and there is no
G other room for adding to or subtracting anything from it.
  [Para 29] [1124-H; 1125-A-C]

       3. When there is a lease of a house or a shop it
    cannot be treated as a lease of structure but also a lease
H
  SHAHA RATANSI KHIMJI & SONS v. PROPOSED KUMBHAR 1105
                 SONS HOTEL P. LTD.

of site. Once a tenancy is created in respect of a building     A
standing on the land it is the building and the land which
are both components of the subject-matter of demise and
the destruction of the building alone does not determine
the tenancy when the land which is the site of the building
continues to exist. This interpretation, is In accord with      B
Section 108 of the Act. It is reflectible that in
*Vannattankandy lbrayi's case, the two-Judge Bench
observed that the rights stand extinguished as on the
distinction of the demise, for there is destruction of the
superstructure and in its non-existence there is no             c
subject matter. Thus, the land has been kept out of the
concept of subject matter. The Court in the said case
failed to appreciate that there are two categories of
subject-matters, combined in a singular capsule, which
is the essence of provision under the Transfer of               0
Property Act and not restricted to a singular one, that is,
the superstructure. In ·~ Lakshmipathi the Court took
note of the fact that the land and superstructure standing
on it as a singular component for the purpose of tenancy.
It is in tune with the statutory provision. Th~refore, in the   E .
event of the tenancy having been created in respect of a
building standing on the land, it is the building and the
land which are both components of the subject-matter of
demise and the destruction of the building alone does not
determine the tenancy when the land which was the site
of the building continues to exist. [Paras 31 and 32] [1125-    F
G-H; 1126-A-G]

   *Vannattankandy lbrayi Vs. Kunhabdu//a Hajee (2001) 1
sec 564: 2000 (5) Suppl. SCR 630 • overruled ·
                                                                G
    **Lakshmipathi & Ors. Vs. R.Nithyananda Reddy & Ors.
(2003) 5 sec 150: 2003 (3) SCR 173 • relied on.

       V. Kalpakam Amma vs. Muthurama Iyer Muthurkrishna
. Iyer AIR 1995 Kerala 99 - referred to.
                                                                H
     1106   SUPREME COURT REPORTS              [2014] 6 S.C.R.


A      4. In the instant case, it is not in dispute that the
  respondent purchased the lessor's interest. "The lease
  continued even thereafter and. did not extinguish. The
  lease was subsisting when the shares of the land were
  purchased by the respondent. But the interest of the
B lessee was not purchased by the respondent. What was
  purchased by the respondent was the right and interest
  of ownership of the property. The interest of the appellant
  as lessee did not vest with the respondent. Therefore, the
  tenancy of the appellant cannot be said to have been
c determined consequent upon demolition and destruction
  of the tenanted premises. The impugned judgment is set
  aside. However, taking into consideration the fact that the
  appellant is not in possession of the suit property since
  long, restoration of possession of suit property to the
  appellant is not directed. Instead the respondent is
0
  directed .to pay a sum of Rs. 20,00,0001- in favour of the
  appellant towards compensation for depriving the
  appellant from enjoying the suit property, within two
  months, failing which it shall be liable to pay interest @
E 6% per annum from the date of the judgment. [Paras 33
  and 34] [1126-H; 1127-A-F]

        Hind Rubber Industries (P) Ltd. vs. Tayebhai
   Mohammedbhai Bagasarwalla, AIR 1996 Born. ~89; Raja
   Dhruv Dev Chand v. Harmohinder Singh and Anr. AIR 1968
 F SC 1024: 1968 SCR-539; D.G. Gose & Co. (Agents) (P) Ltd.
   v. State of Kera/a (1980) 2 SCC 410: 1980 (1) SCR 804 ;
   Corpn. of the city of Victoria v. Bishop of Vancouver Island
   AIR 1921 ·PC 240 - referred to.
                        Case Law Reference:
 G
        2000 (5) Suppl. SCR 630 Overruled            Para 3
        2003 (3) SCR 173           Relied on         Para 4
        AIR 1995 Kerala 99         Referred to       Para 23
·H
 SHAHA RATANSI KHIMJI & SONS v. PROPOSED KUMBHAR            1107
                SONS HOTEL P. LTD.

    AIR 1996 Bom. 389              Referred to        Para 24        A
    1968 SCR 339                   Referred to        Para 30
    1980 (1) SCR 804               Referred to        Para 31
    AIR 1921 PC 240                Referred to        Para 31
                                                                     B
    CIVIL APPELLATE JURISDICTION: Civil Appeal No.127
of 2007

     From the Judgment and Order dated 18.07.2006 of the
High Court of Judicature at Bombay in Second Appeal No.109           c
of 2006.

    V.A. Mohta, Braj K. Mishra, Aparna Jha, Nilkantha Nayak,
Vishwajit Singh for the Appellants.

    Gaurav Agarwal for the Respondent.                               D

    The Judgment of the Court was delivered by

      SUDHANSU JYOTI MUKHOPADHAYA, J. 1.' This
appeal is directed against the judgment and decree dated·18th
July, 2006 passed by the High Court of Judicature at Bombay          E
in Second Appeal No. 109 of 2006. By the impugned judgment,
the High Court affirmed the concurrent finding of the lower courts
that the appellant's tenancy right had lapsed and dismissed the
second appeal.
                                                                     F
    2. When the matter came before this Court, vide order
dated 5th January, 2007, this Court referred the matter to a
Bench of three Judges. The said order reads as under:

     ''Apparently there seems to be inconsistency in the wew G
     taken by this Court in Vannattankandy lbrayi Vs.
     Kunhabdulla Hajee {(2001) 1 SCC 564] and~
     T.Lakshmipathi & Ors. Vs. R.Nitbyananda Reddy & Ors;
     {(2003J 5 sec 150].

     Leave granted.                                                  H
    1108    SUPREME COURT REPORTS                  [2014) 6 S.C.R.

A       The matter shall be placed before a three Judge Bench.

        Status quo shall be maintained in the meanwhile."

       3. In the case of Vannattankandy lbrayi Vs. Kunhabdulla
  Hajee, (2001) 1 SCC 564, this Court formulated two questions
B for consideration:

         "(a) Whether the tenancy in respect of the premises
        governed by the Kera/a Buildings (Lease and Rent
        Control) Act (hereinafter refeffed to as "the State Rent
c       Act'? is extinguished by destruction of the subject-matter
        of tenancy i.e. the premises by natural calamities, and

        (b) On the destruction of property whether the civil court
        has jurisdiction to entertain and try the suit for recovery of
        possession of land brought by the landlord."
D
        Both questions were answered in the affirmative.

        4. In Lakshmipathi & Ors. Vs. R.Nithyananda Reddy &
  Ors. (2003) 5 SCC 150, this Court held that lease of a building
E includes, the land on which the building stands. So even if the
  building is destroyed or demolished, the lease is not determined
  as long as the land beneath it continues to exist. Doctrine of
  frustration cannot be invoked on destruction or demolition of a
  building under lease where not only privity of contract but privity
F of estate is also created.

       5. In the present case, the suit property comprises of Plot
  No. 525, Shaniwar Peth, Karad in District Satara, Maharashtra.
  There was a god own on the southern side of the suit property.
  The eastern portion of the suit property was open and there was
G a road admeasuring 10 to 12 ft. from which the municipal road
  could be accessed. On the horthern portion of the suit property,
  there was one RCC building. The northern 11/16th portion of
  the suit property belonged to one Vinayak Patwardhan whereas
  the southern 5/16th share, on which the godown was
H constructed belonged to one Ujjwal Lahoti.
   SHAHA RATANSI KHIMJI & SONS v. PROPOSED KUMBHAR 1109
  SONS HOTEL P. LTD. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

      6. In or about 1961-62, the appellant firm took the godown       A
 over the suit property on rent from Ujjwal Lahoti; Since then the
 appellant has been continuously paying rent to Ullwal Lahoti and
 storing its goods in the godown. The appellant was using the
 access on the eastern side of the godown for approaching the
 municipal road and in bringing its goods to the godown.               B

      7. The case of the appellant is that the respondent had
 purchased 11/16th share of Vinayak Pa.twardhan in Plot No.
 525 by two sale deeds dated 9th September, 1971 and 21st
 January, 1978, After purchasing the plot, the respondent              C
 demolished the RCC building existing over the property and
~started digging for basement for construction of a hotel. Later,
 on 4th May, 1990, the respondent purchased the remaining 5/
 16th share from Ujjwal Lahoti.

       8. Further case of the appellant is that the respondent(s)      D
. without obtaining any requisite permission from the municipality
  started digging a ditch towards the northern side wall of the suit
  property, thereby exposing the northern base of the godown to
  the vagaries of nature. The said ditch was nearly 13.6 ft. deep
  and exposed the entire base of the godown. During the rainy          E
  season, water got accumulated in the said ditch and the entire
  structure of godown was threatened. It weakened the foundation
  of godown and subjected the entire structure of godown to the
  danger of collapsing. When the appellant inquired the
  respondent about the same, the respondent asked the                  F
  appellant to vacate the godown. The respondent also
  threatened the workers of the appellant. Therefore, according
  to the appellant, the excavation made by the respondent was
  intentional and directed towards terminating the tenancy of the
  appellant by adopting dubious methods. It is also alleged that       G
  the respondent also closed the access road to the suit property.
  Thus, the appellant was unable to keep its goods in or take out
  its goods from the suit property, causing irreparable loss to the
  appellant.

      9. The appellant filed a Regular Civil Suit No. 211 of 1990      H
    1110    SUPREME COURT REPORTS                 [2014) 6 S.C.R.


A in the Court of llnd Jt.Civil Judge, J.D. Karad, at Karad. In the
  said civil suit, the appellant prayed that the respondent be
  restrained from closing the access of the appellant to the suit
  property from the municipal road. The appellant further prayed
  that the respondent be restrained from digging in a manner
B which would cause damage to the godown.

       10. In the said suit, initially ad interim injunction was
  granted restraining the respondent from further digging the suit
  property. Finally, on 28th May, 1990, ex-parte interim injunction
  was vacated. Aggrieved by the same, the appellant filed a
C Misc. Civil Appeal No. 123 of 1990 before the lllrd Additional
  District Judge, Satara against the order passed in RCS No.
  211 of 1990.

        11. The said appeal was also dismissed on 16th April,
D 1996. It was alleged that the respondent thereafter went ahead
  with further destruction of the godown and demolished the
  western wall of the godown on 21st October, 1996, Aggrieved
  by the same, the appellant moved an application for
  amendment of the plaint bringing on record that on 21st
E October, 1996, the respondent again pulled down some portion
  of the western wall of the godown and dUe to the damage
  caused to base of the property, during the rainy season the
  remaining walls also had collapsed. The appellant sought
  amendment of the plaint and inclusion of prayer to the effect
F that the respondent be directed to reconstruct the walls by order
  of mandatory injunction. The appellant further prayed that it may
  be allowed to reconstruct the walls of the godown and the
  respondent should ·not be allowed to destroy or disturb the
  appellant from construction of the godown.
G        12. The amendment sought for by the appellant was initially
    not allowed by the learned Civil Judge. The High Court by order
    dated ~5th March, 2002 in Civil Revision No. 447 of 2002
    allowed the amendment.

H        13. The respondent filed written st~tement and additional
 SHAHA RATANSI KHIMJI & SONS v. PROPOSED KUMBHAR · 1111
SONS HOTEL P. LTD. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

Nritten statement in which one of the grounds was taken was          A
that godown got demolished due to natural cause and not due
to the acts of th~ respondent.

    14. By the Judgement and decree dated 30th August,
2002, learned Civil Judge dismissed the suit filed by the
                                                                     B
appellant.

      15. Being aggrieved by the judgement and decree passed
by the Trial Court, the appellant filed a Regular Civil Appeal No.
86 of 2002 before the learned Addi. District Judge, Karad. By
its judgement and order dated 30th November, 2005, the               C
learned Addi. District Judge, Karad dismissed the appeal of
the appellant.

     16. Against the judgement and decree of the Learned
Additional District Judge, Karad, the appellant filed Second         D
Appeal No. 109 of 2006 before the High Court of Judicature
at Bombay. By its impugned judgement and decree dated 18th
July, 2006, the High Court dismissed the second appeal on the
ground that the tenancy right of the appellant had lapsed and
no substantial question of law was involved in the appeal.
                                                                     E
     17. Learned counsel appearing for the appellant submitted
that even after the destruction of the tenanted premises, the
tenancy is not determined, and hence the appellant is entitled
to the benefit of Section 108(B)(e) of the Transfer of Property
Act, 1882 (hereinafter referred to as 'the TP Act'). It was          F
contended that even if the tenanted premises is completely
destroyed and renders the tenanted premises substantially or
permanently unfit for the purpose for which it was let out, the
lease subsists till the tenant terminates the lease.
                                                                     G
     18. In order to fully and appropriately appreciate the issue
involved in the present case, it is desirable to refer to the
relevant provisions of the Transfer of Property Act, 1882-(T.P.
Act for short).                               ·
                                                                     H
    1112     SUPREME COURT REPORTS                  [2014] 6 S.C:R.


A        19. Chapter V of the T.P. Act, 1882 deals with the lease
    of immovable property. Section 105 of the T.P. Act defines
    'lease' and the said definition is as under:

        "105. Lease defined.-        A lease of immoveable
        property is a transfer of a right to enjoy such property,
B
        made for a certain time, express or implied, or in
        perpetuity, in consideration of a price paid or promised,
        or of money, a share of crops, service or any other thing
        of value, to be rendered periodically or on specified
        occasions to the transferor-by the transferee, who accepts
c       the transfer on such terms.

        Lessor, lessee, premium and rent defined. -The transferor
        is called the lessor, the transferee is called the lessee, the
        price is called the premium, and the money, share, service
D       or other thing to be so rendered is called the rent."

         20. Section 108 of the T.P. Act explains the rights &
    liabilities of lessor and lessee and provisions of the said
    section relevant to the present case i.e. Section 108(B)(e)
E   reads as under:

        "108. Rights and liabilities of lessor or lessee. _, In the
        absence of a contract or local usage to the contrary, the
        lessor and the lessee of immovable property, as against
        one another, respectively, possess the rights and are
F       subject to the liabilities mentioned in the rules next
        following, or such of them as are applicable to the
        property leased:-

         (A) Rights and Liabilities of the Lessor
G       xxxxx

         (BJ Rights and'/iabilities of the Lessee

         (e) If 16y fire, tempest or flood, or violence of any army or
H
         of a mob, or other irresistible force, any material part of
   SHAHA RATANSI KHIMJI & SONS v. PROPOSED KUMBHAR 1113
· SONS HOTEL P. LTD. [SUDHANSU JYOTI MUKHOPADHAYA, J]

    the property be wholly destroyed or rendered                        A
    substantially and permanently unfit for the purposes for
    which it was let, the lease shall, at the option or the
    lessee, be void:

    Provided that, if the injury be occasioned by the wrongful          8
    act or default of the lessee, he shall not be entitled to
    avail himself of the benefit of this provision;"

    21. The lease of immovable property is determined by
modes stipulated under Sections 106 and 111 of the T.P. Act.
Section 111 of the T.P. Act reads as under:                             C

     "111. Determination of lease

    A lease of immovable property determines-

     (a) by efflux of the time limited thereby,                         D

     (b) where such time is limited conditionally on the
     happening of some event-by the happening of such event,

     (c) where the interest of the lessor in the property
                                                                        E
     terminates on, or his power to dispose of the same
     extends only to, the happening of any event-by the
     happening of such event,

     (d) in case the interests of the lessee and the lessor in the
     whole of the property become vested at the same time in            F
     one person in the same right,

     (e) by express surrender, that is to say, in case the lessee
     yields up his interest under the lease to the lessor, by
     mutual agreement between them,
                                                                        G
     (f) by implied surrender,

     (g) by forfeiture; that is to say, (1) in case the lessee breaks
     an express condition which provides that, on breach
     thereof, the lessor may re-enter; or (2) in case the lessee        H
    1114    SUPREME COURT REPORTS                    [2014] 6 S.C.R.


A       renounces his character as such by setting up a title in a
        third person or by claiming title in himself; or (3) the lessee
        is adjudicated an insolvent and the lease provides.that the
        lessor may re-enter on the happening of such event; and
        in any of these cases the lessor or his transferee gives
B       notice in writing to the lessee of his intention to determine
        the lease,

        (h) on the expiration of a notice to determine the lease, or
        to quit, or of intention to quit, the property leased, duly given
        by one party to the other."
c
      · 22. Immovable property means landed property and may
  include· structures embedded in the earth such as walls or
  buildings for the permanent beneficial enjoy111ent. A lease of
  immovable property is a transfer of right to enjoy such property
D in consideration of price paid as per Section 105 of the T.P.
  Act. By way of lease, a right and interest is created which
  stands transferred in f~vour of ttie lessee. The immovable
  property, thereafter, only can be reverted back on determination
  of such right and interest in accordance with the provisions of
E the T.P. Act. Therefore, once the right of lease is transferred in
  favour of the lessee, the destruction of a house/building
  constructed on the lease property does not determine the
  tenancy rights of occupant which is incidental to the contract of
  the lease which continues to exist between the parties.
F      23. The Kerala High Court in V. Kalpakam Amma vs.
  Muthurama Iyer Muthurkrishria Iyer, AIR 1995 Kerala 99, held
  that there cannot be a building withoufa. site and once a
  structure is put up in the land the site becomes the part of the
  structure and, thereafter the site becomes part of the building.
G T.he Court further held:

        "14. The Supreme Court had also occasion to consider
        the meaning of the word 'building' in D. G. Gouse and Co:
        v. State of Kera/a (1980) 2 SCC 410: (AIR 1980 SC 271).
H       lt was a case challenging the constitutionality of the
 SHAHA RATANSI KHIMJI & SONS v. PROPOSED KUMBHAR 1115
SONS HOTEL P. LTD. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

   Kera/a Building Tax Act, 1975. Paragraph 21 of the               A
   judgment deals with the definition of the word 'building'.
    It read thus:-

   "The word "building" has been defined in the oxford
   Dictionary as follows:                                           B

   That which is tJui/t; a structure, edifice; now a structure of
   the nature of a house built where it is to stand.

   Entry 49 of Schedule VII of the Constitution of India
   therefore includes the site of the building as its               C
   component part. That, if we may say so, inheres in the
   concept or the ordinary meaning of the expression
   "building".

    15. A somewhat similar point arose for consideration in
   Corporation of the City of Victoria v. Bishop of Vancouver       D
   Island, AIR 1921 PC 240 with reference to the meaning
   of the word "building" occurring in Section 197 (1) of the
   Statutes of British Columbia 1914. It was held that the
   word must receive its natural and ordinary meaning as
   "including the fabric or which it is composed, the ground        E
   upon which its walls stand and the ground embraced
   within those walls". That appears to us to be the correct
   meaning of the word 'building'.

   15A. In Stroud's Judicial Dictionary (Vol.I. 5th Edn.), the      F
   word 'building' is defined thus: "What is a building must
   always be a question of degree and circumstances". In
   Black's Law Dictionary (5th Edn.), the meaning of the
   word building is given as follows: ''.A structure or edifice
   enclosing a space within its walls, and usually, but not         G
   necessarily, covered with a roof". In Bourvier's Law
   Dictionary (A Concise Encyclopedia of the Law Vol. I. 3rd
   Revision) the meaning of building is given as "an edifice,
   erected by art, and fixed upon or over the soil, composed
   of brick, marble, wood, or other proper substance,
                                                                    H
    1116   SUPREME COURT REPORTS                   [2014) 6 S.C.R.

A      connected together, and designed for use in the position
       in which it is so fixed. "

       16. The above are some of the natural meanings that are
       given to the word 'building'. Adopting the·above meaning,
       the word 'building' must take in the site also, as part of it.
B
       If that is so, without site, there cannot be a structure and
       the site becomes an integral part of the building. Without
       a site, the super structure of the building on the land
       cannot normally exist. Thus, when there is a lease of a
       building, such lease would normally take in the site
c      unless it specifically excluded from the land. "

      24. Similar issue was considered by the Bombay High
  Court in Hind Rubber Industries (P) Ltd. vs. Tayebhai
  Mohammedbhai Bagasarwalla, AIR 1996 Born. 389. In the said
D case, the High Court obseryed as under:

       "16. In my view, the correct legal position in this country
       appears to be that the destruction of the tenanted
       structure does not extinguish the tenancy and the right
       of occupation of the tenant under the contract of tenancy
E
       continues to exist between the parties. Merely because
       the tenanted structure has been destroyed or
       demolished, the right transferred under the lease cannot
       be said to have come to an end, and the relationship of
       lessor and lessee continues to exist. The destruction of
F
       the tenanted premises does not destroy the tenancy
       rights nor does it bring to an end the relationship of lessor
       and lessee or for that matter landlord and tenant. The
       lessee continues to be lessee in the property leased
       even after its destruction by fire or such like event unless
G      the lessee exercises his option of treating such lease as
       void. It may be observed that Section 108 of the T. P. Act
       deals with the rights and liabilities of lessor and lessee
       and Part-Band clause (e) of Section 108 provides that if
       the property leased in wholly destroyed or rendered
H      substantially and permanently unfit for the purposes for
 SHAHA RATANSI KHIMJI & SONS v. PROPOSED KUMBHAR 1117
SONS HOTEL P. LTD. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

    which it was leased by fire, tempest or flood or violence A
    of any army or of a mob or other irresistible force, such
    lease may be rendered -void at the option of the lessee
    provided of course that such injury to the lease property
    has not been occasioned by the wrongful act or default
    of the lessee. That means that right of the lessee in the B
    leased property subsists even if the leased properly has
    been destroyed by fire, tempest or floocf or violence of
    an army or of a mob or other irresistible force unless the
    lessee exercises his option that on happening of such
    events the iease has been rendered void. By necessary c
    corollary, therefore, if the leased property is destroyed
    wholly by fire, the lease cannot be said to be
    extingui§hed, nor can it be said that lessee's right in the
    leased property has come to an end unless the lessee
    exercises such option. The express provision in clause 0
    (e) of Section 108 leaves no manner of doubt that on
    destruction of leased property by fire, the lease cannot
    be said to be extinguished, automatically and in this view
    of the matter the statement of law made in Article 592 of
    American Jurisprudence and para 2066 of Woodfall on·. E
    landlord and tenant and relied upon by the learned
    counsel for the Plaintiff/Respondent cannot be applicable
    in our country. The view of the Kera/a High Court in Dr.
    V. Siddharthan's case: (supra) is a/so not acceptable
    because of no proper construction given to Section
     108(e) of the T.P. Act."                                   F

     25. Adverting to one of the situations similar to that, now
before us, the two Judge-Bench of this Court in Vannattankandy
lbrayi (supra) observed as under:
                                                                   G
    "20. From the aforesaid decisions 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. Let us test the arguments of
    learned counsel for the appellant that on the destruction      H
    1118   SUPREME COURT REPORTS                 [2014} 6 S.C.R.

A      of the shop the tenant can resist his dispossession on
       the strength of Section 108(B)(e). In this case what was
       let out to the tenant was a shop for occupation to carry
       on business. On the destruction of the shop the tenant
       has ceased to occupy the shop and he was no longer
B      carrying bn business therein. A perusal of Section
        108(B)(e) shows that where a premises has fallen down
       under the circumstances mentioned therein, the
       destruction of the shop itself does not amount to
       determination of tenancy under Section 111 of the Act.
c      In other words there is no automatic determination of
       tenancy and it continues to exist. If the tenancy
       continues, the tenant can only squat on the vacant land
       but cannot use the shop for carrying on business as it is
       destroyed and further he cannot construct any shop on
       the vacant land. Under such circumstances it is the
D
?      tenant who is to suffer as he is unable to enjoy the fruits
       of the tenancy but he is saddled with the liability to pay
       monthly rent to the landlord. It is for such a situation the
       tenant has been given an option under Section 108(B)(e)
        of the Transfer of Property Act to render the lease of the
E      premises as void and avoid the liability to pay monthly
       rent to the landlord. Section 108(B)(e) cannot be
        interpreted to mean that the tenant is entitled to squat on
        the open land in the hope that in future if any shop is
        constructed on the site where the old shop existed he
F       would have right to occupy the newly-constructed
       premises on the strength of original contract of tenancy.
        The lease of a shop is the transfer of the property for its
        enjoyment. On destruction of the shop the tenancy
        cannot be said to be continuing since the tenancy of a
G       shop presupposes a property in existence and there
        cannot be subsisting tenancy where the property is not
        in existence. Thus when the tenanted shop has been
       completely destroyed, the tenancy right staf]dS
        extinguished as the demise must have a subject-matter
H       and if the same is no longer in existence, there is an end
 SHAHA RATANSI KHIMJI & SONS v. PROPOSED KUMBHAR 1119
SONS HOTEL P. LTD. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

   of the tenancy and therefore Section 10B(B}(e} of the Act   A
   has no application in case of premises governed by the
   State Rent Act when it is completely destroyed by natural
   calamities."

   23. In V. Kalpakam Amma(supra) the Kera/a High Court B
   relying upon the definition of "building" in the State Rent
   Act held that there cannot be a building without a site and
   once a structure is put up in the land the site becomes
   part of the structure and thereafter the site becomes part
   of the building and on that basis the High Court held that C
   once the premises covered by the State Rent Act is
   raised to the ground the tenancy continues to survive in
   respect of the vacant land. In our view this is not the
   correct interpretation of Section 2(1) of the State Rent Act.
   Section 2(1) uses the words ''part of a building or hut".
                                                                 0
   The words ''part of the building" do not refer to the land
   on which the building is constructed but refer to any other
   superstructure which is part of that main building e.g. in
   addition to the main building if there is any other
   superstructure in the said premises i.e. motor garage or
   servant quarters then the same would be part of the E
   building and not the land on which the building has been
   so constructed. So far the appurtenant land which is
   beneficial for the purpose of use of the building is a/so a
   part of the building. Thus according to the definition of
    "building" in the State Rent Act the building would include F
   any other additional superstructure in the same premises
   and appurtenant land. We are, therefore, of the view that
   the interpretation put by the Kera/a High Court on Section
   2(1) for holding that the words ''part of a building" mean
   the land on which the building has been constructed is G
   not correct. The provisions of the State Rent Act clearly
   show that the State Rent Act is a self-contained Act and
   the rights and liabilities of landlord and tenant are
   determined by the provisions contained therein and not
   by the provisions of the Transfer of Property Act or any H
    1120   SUPREME COURT REPORTS                 [2014] 6 S.C.R.


A      other law. The rights of a landlord under the general law
       are substantially curtailed by the provisions of the State
       Rent Act as the Act is designed to confer benefit on
       tenants by providing accommodation and to protect them
       from unreasonable eviction. In the present case.what we
B      find is that the subject-matter of tenancy was the shop
       room which was completely destroyed on account of
       accidental fire and it was not possible for the tenant to
        use the shop for which he took the shop on rent. After the
        shop was destroyed the tenant, without consent or
c      permission of the landlord, cannot put up a new
        construction on the site where the old structure stood. If
        it is held that despite the destruction of the sh9p, tenancy
        over the vacant land continued unless the tenant
        exercises his option under Section 108(B)(e) of the Act
        the situation that emerges is that the tenant would
D
        continue as a tenant of a non-existing building and liable
        to pay rent to the landlord when he is unable to use the
      · shop. The tenancy of the shop; which was let out, was a
        superstructure and what is protected by the State Rent
        Act is the occupation of the tenant in the superstructure.
E       If the argument of the appellant's counsel is accepted
        then it would mean that although the tenant on the
        destruction of the shop cannot put up a new structure on
        the old site still he would continue to squat on the vacant
        land. Under such situation it is difficult to hold that the
F       tenancy is not extinguished on the total destruction of the
        premises governed by the State Rent Act. Under English.
        law, in a contractual tenancy in respect of building and
        land the liability to pay the rent by the tenant to the
        landlord continues even on the destruction of the building
G        whereas there is no liability of th_e tenant to pay rent to
        the landlord on the destruction of the premises governed
        by the State Rent Act. Therefore, the view taken by the
        Bombay High Court in Hind Rubber Industries (P)
        Ltd.(supra) does not lay down the correct view of law. This
H        Court a number of times has held that any special leave
 SHAHA RATANSI KHIMJI & SONS v. PROPOSED KUMBHAR . 112'1
SONS HOTEL P. LTD. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

    petition dismissed by this Court without giving a reason      A
    has no binding force on its subsequent decisions.
    Therefore, the two aforesaid cases relied on by counsel
    for the appellant are of no assistance to the argument
    advanced by him.
                                                                   B
    24. However, the situation would be different where a
    landlord himself pulls down a building governed by the
    State Rent Act. In such a situation the provisions
    contained in Section 11 of the State Rent Act would be
    immediately attracted and the Rent Control Court would        C
    be free to pass an appropriate order.

    25. Coming to the next question whether the civil court
    was competent to entertain and try the suit filed by the
    respondent for recovery of possession of the vacant land.
    As already stated above, the tenancy in the present case 0
    was of a shop room which was let out to the tenant. What
    is protected by the ·State Rent Act is the occupation of
    the tenant in the superstructure. The subject-matter of
    tenancy having been completely destroyed the tenant .
    can no longer use the said shop and in fact he has E
    ceased to occupy the said shop. Section 11 of the State
    Rent Act c/Qes not provide for eviction of the tenant on
    the ground of destruction of the building or the
    superstructure. Thus when there is no superstructure. in.
    existence the landlord cannot claim recovery of F
    possession of vacant site under the State Rent Act. The
    only remedy available to him is to file a suit in a civil couit
    for recovery of possession of land. In view of the matter
    the civil court was competent to entertain and try the suit
    filed by the respondent landlord. H                             G
     26. Subsequently, another two-Judge Bench of this Court
considered the same question in T. Laxmipathi(Supra). In the
said case this Court noticed the decision of Bombay High Court
in Hind Rubber Industries (supra) and other High Courts and
observed as under:                                                 H
    1122   SUPREME COURT Rf PORTS                  [2014} 6 S.C.R.

A      "20. The tenancy canno, be said to have been
       determined by attracting applicability of the doctrine of
       frustration consequent upon demolishing of the tenancy
       premises. Doctrine of frustration belongs to the realm of
       /al'/ cf contracts; it does not apply to a transaction where
8      not only a privity of contract but a privity of estate has a/so
       been created inasmuch as /ease is the transfer of an
       interest in immovable property within the meaning of
       Section 5 of the Transfer of Property Act (wherein the
       phrase "the transfer of property" has been defined), read
c      with Section 105, which defines a /ease of immovable
       property as a transfer of a right to enjoy such property.
       (See observations of this Court in this regard in Raja
       Dhruv Dev Chand v. Raja Harmohinder Singh6.) It is
       neither the case of the appellants nor of Respondents 2
       and 1 that the subject-matter of lease was the building
D
       and the building alone, excluding land whereon the
       building forming the subject-matter of tenancy stood at
       the time of creation of /ease.

       22. A lease of<: nouse or of a shop is a lease not only of
E      the superstructure but also of its site. It would be different
       if not only rhe site but also the land beneath ceases to
       exist by a.-: act of nature. In the present case the
       appellants who are :the successors of th,e tenancy right
       have demolished th9: superstructure but the land beneath
F      continues to exist. The entire tenancy premises have not
       been lost. Moreover, the appellants cannot be permitted
       to tak~ shelter behind, their own act prejudicial to the
       interest. of Respondent 1 under whol1) RespondentS 2
       and 3 were holding as tsnfJnfs and then inducted the
G      appellants.

       24. ~..Ye are, therefore, of the opinion that in the event of
       the ttmancy having been created in respect of a building
       standing on the land, it is the building and the land which,
       are both components 'of the subject-matter of demise and
H
 SHAHA RATANSI KHIMJI & SONS v. PROPOSED K!JMBHAR 1123
SONS HOTEL P. LTD. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

    the destruction of the building alone does not determine         A
    the tenancy when the land which was the site of the
    building continues to exist; more so when the building has
    been destroyed or demolished neither by the landlord nor
    by an act of nature but solely by the act of the tenant or
    the person claiming under him. Ample judicial authority          B
    is available in support of this proposition and illustratively
    we refer to George J. Ovunga/ v. Peter [AIR 1991 Ker 55],
    Rahim Bux v. Mohd. Shafi [AIR 1971 All 16], Hind
    Rubber Industries (P) Ltd. (supra) and Jiwanla/ & Co.. v
    Manot & Co. Ltd.[(1960)64 CWN 932]. The Division                 c
    Bench decision of the Kera/a High Court in V. Sidharthan
    (Dr) v. Pattiori Ramadasan appears to take a view to the
    contrary. But that was a case where the building was
    totally destroyed by fire by negligence of the tenant. It is
    a case which proceeds on very peculiar facts of its own          0
    and was rightly dissented from by the Bombay High Court
    in Hind Rubber Industries (P) Ltd. v. Tayebhai
    Mohammedbhai Bagasarwalla. "

   . 27. After referring to the aforesaid two authorities, we are
required to scrutinize which view is in consonance with the          E
statutory provisions enshrined under the Transfer of Property
Act. We have already referred to the statutory provisions that
control the relationship between th~ lessor and the lessee, the
definition of lease as engrafted under Section 105, the rights
and liabilities of lessor and lessee enshrined under Section 108     F
and the conceptual circumstances and the procedure which find
mention for determination of lease under Section 111 of the Act.

     28. In Vannattankandy lbrayi (supra) the learned Judges-
referred to the decision on common law, the principles in G
American jurisprudence, and various decisions of the High
Courts and adverted to two categories of tenants, namely, a
tenant under the Transfer of Property Act and the other under
the State Rent Laws and proceeded to interpret Section 108
(B) (e) to hold that where a premises has fallen down under the M
    1124     SUPREME COURT REPORTS                  [2014] 6 S.C.R.


A  circumstances mentioned therein, the destruction of the shop
    itself does not amount to determination of tenancy under
    Section 111 of the Act and there is no· automatic determination
   of tenancy and it continues to exist. If.the tenancy continues, the
   tenant can only squat on the vacant land but cannot use the shop
s for carrying on business as it is destroyed and further he cannot
    construct any shop on the vacant land. Under such
    circumstances it is the tenant .who is to s,uffer as he is unable
   to enjoy the fruits of the tenancy but he is saddled with the
    liability to pay monthly rent to the landlord. It is for such a
c situation the tenant has been given an option under Section
    108(8)(e) of the Transfer of Property Act to render the lease of
    the premises as void and avoid the liability to pay monthly rent
    to the landlord. Taking note of this facet, the Court proceeded
  ·to rule that Section 108(8)(e) cannot be interpreted to mean
    that the tenant is entitled to squat on .the open land in the hope
0
    that in future if any shop is constructed on the site where the
    old shop existed he would have right to occupy the newly-
    constructed premises on the strength of original contract of
    tenancy because lease of a shop is the transfer of the property
    for its enjoyment and ~:>n destruction of the shop the tenancy
E cannot be said to be continuing since the tenancy of a shop
    presupposes a property in existence and there cannot be
    subsisting tenancy where the property is not in existence. It was
    further laid down that when the tenanted shop has been
    completely destroyed, the tenancy right stands extinguished as
F the demise must have a subject-matter and if the same is no
    longer in existence, there is an end of the tenancy.

       29. As we notice from the aforesaid analysis it is founded
  on an interpretation of Section 108 (B) (e) by assuming when
G a building or structure is leased out, it is the superstructure that
  is leased out in exclusivity. As we perceive, the language
  employed in Section 108 (B) (e) does not allow such a
  construction. The singular exception that has been carved out
  is the wrongful act or default on the part of the lessee which
H results in the injury to the property that denies the benefit. In all
 SHAHA RATANSI KHIMJI & SONS v. PROPOSED KUMBHAR 1125
SONS HOTEL P LTD. [SUDHANSU JYOTI MUKHOPADHAYA, J]

other circumstances which find mention under Section 111 of               A
the Act, are the grour.ids for determination of the lease. This is
the plainest construction o,f the provision and there is no other
room for adding to or subtr~cting anything from it. Be it stated,
Section 108 postulates
                 I
                           the rights and liabilities of lessor and
lessee. If a righ~ is not conferred by the Statute on the lessor          B
for determination, except one exception which is clearly
stipulated there in Section 108 (B) (e) by the Legislature, it
would not be permissible for the Court to add another ground
of the base or fulcrum of ethicality, difficulty or assumed
supposition.                                                              c_
      30. In T. Lakshmipathi's case, the Court referred to the
observations made by a three-Judge Bench in Raja Dhruv Dev
Chand v. Harmohinder Singh and another, AIR 1968 SC 1024
wherein it has been held that doctrine of frustration belongs to
the realm of law of contr-acts1 it doe~ not apply to a transaction        D
where not only a privity of contract but a privity of estate has
also been created inasmuch as lease is the transfer of an
interest in immovable property within the meaning of Section
5 of the Transfer of Property Act. In the said case, it has been
further opined that under a lease of land there is a transfer of          E
right to enjoy that land. If any material part of the property be
wholly destroyed or rendered substantially and permanently unfit
for the purpose for which it was let out, because of fire, tempest,
flood, violence of an army or a mob, or other irresistible force,
the lease may at the option of the lessee, be avoided and that            F
is the rule incorporated in Section 108 (e) of the. Transfer of
Property Act and applies to leases of land, to which the Tran.sf~r
of Property Act applies.

     31. It is apt to note here that when there is a lease of a       1


house or a shop it cannot be treated as a lease of structure'· G
but also a lease of site. The Court referred to the decision in;
D.G. Gose & Co. (Agents) (P) Ltd. v. State of Kerala (19.80) 2
SCC 410 wherein this Court held that the site of the building is
a component part of the building and, therefore, inheres in it
                                                                          H
    1126    SUPREME COURT REPORTS                  [2014] 6 S.C.R.
                                     /




A the concept or ordin~ry meaning of.the expression "building".
  The Court also placed reliance on Corpn. of the city of Victoria
  v. Bishop of Vancouver Island AIR 1921 PC 240.

         32. It has been further opined that once a tenancy is
B created in respect of a building standing on the land it is the
   building and the land which are both components of the subject-
   matter of demise and the destruction of the building alone does
   not determine- the tenancy when the land which is the site of·
   the building continues to exist. This interpretation, as we find,.
   is in accord with Section 108 of the Act. It is reflectible that In
c  Vannattankandy lbrayi's case, the two-Judge Bench observed
   that the rights stand extinguis~ed as on the distinction of .the
   demise, for there is destruction of the superstructure and in fts ·
 . non-existence there is no sub.feet matter. Thus, the land has
   been kept out of the concept of subject matter. In our considered
D opinion, the Court in the said case failed to appreciate that
   there are two categories of subject-matters, combined in a
   singular capsule, which is the essence of provision under the
   Transfer of Property Act and not restricted to a singular one,
   that is, the superstructure. In T, Lakshmipathi (supra) the Court
E took note of the fact that the land and superstructure standing
   on it as a singular component for the purpose of tenancy. It is
   in tune with the statutory provision. Therefore, we agree with
   the proposition stated therein to the affect that "in the event of
   the tenancy having been created in respect ofa building
F standing on the Ian~. it is the building and the land which are
   both components of the subject-matter of demise and the
   destruction of the building alone does not determine the tenancy
   when the land which was the site of the building continues to
   exist". On the touchstone of this analysis, we respectfully opine
G that the decision rendered in Vannattankandy lbrayi (supra)
   does not correctly lay down the law and it is, accordingly,
   overruled.

      33. In the present case, it is not in dispute that the
H respondent purchased the lessor's interest. The lease continued
 SHAHA RATANSI KHIMJI & SONS v. PROPOSED KUMBHAR 1127
SONS HOTEL P. LTD. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

even thereafter and did not extinguish. The lease was subsisting     A
when the shares of the land were purchased by the respondent.
But the interest of the lessee was not purchased by the
respondent. What has been purchased by the respondent is the
right and interest of ownership of the property. The interest of
the appellant as lessee has not been vested with the                 8
respondent. Therefore, we are of the view that the tenancy of
the appellant cannot be said to have been determined
consequent upon demolition and destruction of the tenanted
premises.

      34. In view of the fact and circumstances of the case, we      C
have no other option but to set aside the impugned judgment
and decree dated 18th July, 2006 passed by the High Court
of Judicature at Bombay in Second Appeal No. 109 of 2006
and Judgment and decree dated 30th November, 2005 passed
by the Addi. District Judge, Karad in RCA No. 86 of 2002.            D
However, taking into consideration the fact that the appellant
is not in possession of the suit property since long, we are not
inclined to direct restoration of possession of suit property to
the appellant. Instead we direct the respondent to pay a sum
of Rs. 20,00,000/- (Rupees Twenty Lakhs only) in favour of the       E
appellant towards compensation for depriving the appellant
from enjoying the suit property, within two months, failing which
it shall be liable to pay interest @ 6% per annum from the date
of the judgment.
                                                                     F
    35. The appeal is allowed with the aforesaid observation
and direction. No costs.

Devika Gujral                                      Appeal allowed.