Landlord Not Liable For Damages Caused To A Third Party By A Tenant's Business: Kerala HC
The Kerala High Court held that a landlord cannot be held liable for damages caused to a third party consequent to the conduct of his tenant's business.
The owner of a building (landlord) had let out a shop room for the storage of explosive substances to the tenants. There was a huge explosion that occurred in the building which resulted in damaging articles of the opposite building. The owner of the opposite building (plaintiff) had filed a suit seeking damages for rupees 3 lakhs from both the landlord and the tenants claiming that they were doing joint business as partners.
The trial court held the landlord liable as he was the owner of the building wherein the explosives were stored.
The High Court had to determine if the trial court was right to hold the landlord liable for the damages that resulted consequent on the explosion that occurred in the premises when it was occupied by his tenants.
A Single Bench of Justice Sathish Ninan observed, “The owner had taken all necessary precautions by insisting the second defendant to conduct business in accordance with the explosives laws and further prohibiting him from storing any articles not sanctioned by the Government or Municipality. Under such circumstances the owner of the building, who was not the occupier of the premises at the relevant time and who was not the person who had stored the articles and was doing business therein could not be held liable for the incident.”
Advocate Sumathi Dandapani represented the appellant, while Advocate G. Sreekumar appeared for the respondents.
The landlord had denied the allegation of partnership or his involvement in the business and argued that the building was leased out to the tenants for conducting their business. Similarly, the tenant contended that they were doing the business with all necessary licenses and there was no negligence on their part.
The Court examined the liability of the landlord in his capacity as the owner of the premises and held that “leasing out is not for a prohibited or illegal activity.”
The Court stated that the tenants had control over the premises demised to them by the landlord. It was the tenants who were dealing with the explosive articles based on the permission to conduct the business in explosives by strictly adhering to the Explosives Laws.
The Court held that an owner of the premises could not be made liable for any damage that occurred to a third party consequent on the conduct of the business by the occupier of the premises and explained that “the position would have been different if the entrustment was for the conduct of a business which is not permitted under law.”
Accordingly, the High Court set aside the judgment of the trial court and allowed the appeal.
Cause Title: Johny Padikala v. P.C. Hassan & Ors.
Appearance:
Appellant: Advocates Sumathi Dandapani and Millu Dandapani
Respondents: Advocate G. Sreekumar