Rent-Free Accommodation By Employer To Employee Creates Jural Relationship Of Landlord & Tenant: Karnataka HC
The Karnataka High Court held that providing rent-free accommodation as a term of employment created a jural relationship of landlord and tenant, even between an employer and an employee.
The Bench dismissed a petition filed by an 82-year-old former watchman (petitioner) challenging an eviction order from a property provided as rent-free accommodation by his employer.
A Single Bench of Justice N S Sanjay Gowda observed, “It must be noticed here that providing of a rent-free accommodation, as a term of employment, would create a jural relationship of a ‘landlord and tenant’ even between an employer and an employee. This is because, the component of rent is a part of his emolument which results in an employee getting a reduced salary. The Trial Court was thus justified in coming to the conclusion that there did exist a jural relationship and the suit filed for eviction was perfectly maintainable and the plea of adverse possession sought to be raised was a false and specious plea.”
Advocate M.N.Sathya Raj represented the petitioner, while Advocate Ajay Kadkol.T. appeared for the respondents.
The petitioner had been residing in the rent-free quarters as a term of his employment with the respondent company. Despite attaining the age of superannuation, the petitioner refused to vacate the premises. Consequently, the company filed a suit for eviction, which was decreed in their favour.
It was argued that the company was non-existent and that the petitioner and his family had acquired the property through adverse possession.
The High Court observed that providing rent-free accommodation as a term of employment created a jural relationship of landlord and tenant, even between an employer and an employee. The Court pointed out that the plea of adverse possession by Chinnaswamy was unfounded and that the eviction suit was maintainable.
“It is manifestly clear that the petitioner was an employee of the respondent—Company and he was also provided a rentfree accommodation. This memorandum also contains the signature of the petitioner, signifying his assent to the terms of the employment. This document, coupled with the salary register and the bank statement which establishes regular payment of salary to the petitioner, proves without any doubt that he was an employee of the respondent— Company and had been provided with the suit property as rent-free accommodation as a perquisite of his employment,” the Court remarked.
Consequently, the Court noted that the petitioner chose to take up a false plea regarding adverse possession and questioned the title of his employer, who had provided him with rent-free accommodation, a regular salary, a recurring deposit account, and an LIC policy in his name.
Accordingly, the High Court dismissed the petition and imposed costs of Rs. 50,000 on the petitioner.
Cause Title: Chinnaswamy.K v. Theosophy Company (Mysore) Pvt Ltd. (Neutral Citation: 2024:KHC:17140)
Appearance:
Petitioner: Advocate M.N.Sathya Raj
Respondent: Advocate Ajay Kadkol.T.
