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Rajinder Kumar Bansal & Ors. v. Municipal Committee & Ors.

Civil Appeal · 2021 INSC 405Decided 17 Aug 2021
Civil Appeal No. 8238 of 2013
Justice Hemant Gupta · Justice A.S. Bopanna

Background

In 1909, land in Ambala was leased to a social club (Louis Club) to build and run a clubhouse; the club later sub-let part of the land, and the Municipal Committee eventually took over part of it, including sinking a tube-well for public water use. The landlords sought the club's eviction under the Haryana Urban (Control of Rent and Eviction) Act, 1973, which applies to land rented for "business" purposes. The club argued its recreational activities were not "business" at all, so the rent control law did not even apply. The Rent Controller and Appellate Authority sided with the landlords, but the High Court reversed this, holding that running a club is not a "business."

Decision Breakdown

The Supreme Court held that the word "business" under the Act is not limited to commercial, profit-making activity: it has a wide meaning covering any activity that occupies a person's or institution's time and purpose, including charitable or public-interest activities. Relying on an earlier Full Bench ruling it approved (Model Town Welfare Council), the Court held that operating a club with a constructed pavilion for the benefit of its members qualifies as "business" under the Act, making the eviction law applicable. The Court found the High Court had wrongly distinguished this precedent and wrongly relied on unrelated tax-law cases to define "business" narrowly. The appeals were allowed, the High Court's order was set aside, and the eviction order was restored, with three months given to vacate.

Lesson Learnt

Under rent control laws, "business" is interpreted broadly: it is not restricted to profit-making commercial activity, and even non-profit or club/recreational use of rented land can count as "business," making it subject to ordinary landlord-tenant eviction rules.

Official source (sci.gov.in)View Judgment (PDF)

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