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1988 (9) TMI 354 - SUPREME COURT

1988 (9) TMI 354 - SUPREME COURT - 1989 AIR 458, 1988 SCR Suppl. (3) 241, 1988 SCC (4) 709, JT 1988 (4) 65, 1988 SCALE (2)790 - Civil Appeal Nos. 1594- 1595 0f 1986 - Dated:- 23-9-1988 - NATRAJAN, S. AND PATHAK, R.S. JJ. Avadh Behari Rohtagi, M.S. Maan and B.S. Maan for the Appellant. Harish N. Salve, S.K. Mehta, Vijay Makhija, R. Jaganath Goulay, S.A. Sarin and Aman Vachhar, for the Respondents. JUDGMENT: The Judgment of the Court was delivered by NATARAJAN, J. Both the appeals by special leave .....

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of the applications was directed to surrender possession in a month's time. The High Court, however, reversed the order of the Rent Control Tribunal in the Second Appeals preferred by the respondents a dismissed the Execution Applications. The aggrieved appellant has preferred these appeals. It was the appellant's case that she had obtained the sanction of the Additional Rent Controller, New Delhi on 26/27.2.76 and there-after leased out specified portions in her property bearing no. N-5 .....

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ndent in CA 1595 of 1986) and each of the tenants was to pay a sum of ₹ 50 per month for the respective portion PG NO 245 leased out to them. On the ground the two respondents failed to vacate the portions leased out to them at the end of the two years period, the appellant filed Execution Applications under Section 21 of the Act to seek an order from- the Rent Controller for delivery of possession of the leased portions: The common defence put forth by the two respondents was that there w .....

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975 towards advance payment of rent for three months. They alleged that inspite of their having been inducted into possession in December 1975 itself, the respondent mislead them by saying that the oral tenancy required formal sanction by the Rent Controller and hence they should appear before the Rent Controller and have their statements recorded by him. It ws only after giving their statements before the Rent Controller they suspected the motives of the appellant and hence they refused to exec .....

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by fraud in that it was obtained by suppressing the true facts from the notice of the Rent Controller. It was further held that the order of sanction of the Rent Controller suffered from an infirmity due to the appellant failing to glove the reasons for her wanting to let out the property for a limited period. We need not however concern ourselves about that aspect of the matter. The Rent Control Tribunal, in the appeals preferred to it, however differed from the Rent Controller and held that e .....

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ctised by the appellant and since they had failed to act promptly they were not entitled to seek nullification of the sanction of the Rent Controller on the ground of fraud. In accordance with its conclusions, the Tribunal allowed the appeals preferred by the appellant and held that the Execution Applications were maintainable and directed the respondents to deliver possession to the appellant of the leased portions in a month's time. It was then the turn of the respondents file second appea .....

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ancy rights being given to the respondents in as much as the purported new lease was void in law and incapable of affording scope for any surrender of a pre-existing lease. Consequently the High Court allowed the second appeals and restored the order of the Rent Controller dismissing the Execution Applications. Mr. Rohtagi, learned counsel for the appellant formulated his propositions as under to contend that the High Court had erred in allowing the appeals and dismissing the Execution Applicati .....

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and solemnly declared before him that they were willing to take the premises on lease for a limited period of two years commencing from 1.3.1976. (3) In any event the respondents are dis-entitled under law to set up a plea of fraud to seek nullification of the PG NO 247 sanction granted by the Rent Controller because the respondents had not only failed to bring forthwith to the notice of the Rent Controller the fraud committed by the appellant but on the other hand they had availed of the benefi .....

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he binding nature of the sanction granted by the Rent Controller for creation of limited tenancy rights in their favour. (5) Even if it were to be held that the respondents had already been inducted into possession of the leased premises on an oral tenancy in the month of December 1975 itself, they must be deemed to have impliedly surrendered their tenancy rights under the oral lease when they agreed to accept the limited tenancy rights given to them in pursuance of the sanction of the Rent Cont .....

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remains that a sum of ₹ 1,700 had been paid by them towards security deposit on 10.12.1975. The appellant has no doubt acknowledged the payment under two receipts but both the receipts have been typed on the same paper. The receipts would read as if a sum of ₹ 850 had been received separately from each one of them but the recital is of no consequence because the respondents have paid the appellant a sum of ₹ 5,100 by means of a single cheque towards advance rent for a period of .....

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bed room and one bathroom, the first and second floors consisted of four bed rooms together with bathrooms etc. It is inconceivable that irrespective of the difference in the size and nature of the two portions the respondents would have consented to pay the same rate of rent to the appellant for the portions alleged to have been leased out to them. It is also worthy of note that the tenancies said to have been granted to the two respondents are for the same period, i.e. from 1.3.76 to 28.2.78. .....

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as well as the respondents appeared before the Rent Controller on 26/27.2.76 and gave statements to the effect that the appellant did not require the use of the leased premises for a period of two years commencing from 1.3.76 and that the respondents were willing to take the respective portions marked in the plan Ex. A- I produced by the appellant for a limited period but even so the question would arise whether the order passed by the Rent Controller can be deemed a valid and legal sanction giv .....

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t be that the landlord must not require the premises either in whole or part of any premises for a particular period. Secondly, the landlord must obtain the permission of the Controller in the prescribed manner. Thirdly, letting of the whole or part of the premises must be for residence. Fourthly, such letting out must be for such period as may be agreed in writing." PG NO 249 Applying the above tests, it may be seen that in this case the very first condition has not been fulfilled. When th .....

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Section 2 I has been provided in the Act to offer a pragmatic compromise formula to satisfy the ever increasing demand of rental accommodation by non- owners of houses on the one hand and the reluctance of the owners of houses due to genuine apprehension entertained by them on the other in letting out their houses in whole or in part even when they were not in need of the house or portion of it lest the tenants should set up statutory tenancy rights and refuse to vacate the premises at the end o .....

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nfer limited tenancy rights in favour of the existing tenant himself or in favour of .I new tenant. Section ' I was not intended to obtain post-facto sanction of a tenancy that had already been created by suppressing relevant information from the Rent Controller so as to enable the landlord to straightaway recover possession of the leased property by filling an application under Section 2l of the Act after the expiry of the period for which permission to lease had been granted by the Rent Co .....

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because a statement made in contravention of facts. whether made by one or both the contracting parties, cannot alter the truth of the situation or cure the lacuna of withholding of relevant information from the Rent PG NO 250 Controller. We cannot therefore accept the contention of the appellant's counsel that the order passed by the Rent Controller on 26/27.2.76 granting sanction to the appellant to confer limited tenancy rights on the respondents did not suffer from any defect or infirmi .....

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evance is not whether the appellant had committed any fraud upon the respondents but whether the appellant had fraudulently suppressed relevant materials from the notice of the Rent Controller and had thereby obtained an order of sanction from the Rent Controller to lease out the property for a period of two years from 1.3.1976. There is no denying the fact that the appellant had failed to disclose to the Rent Controller that she had already inducted the respondents into possession and inspite o .....

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ver rule out the possibility of a Rent Controller granting sanction under Section 21 to a landlord to let out his premises in whole or in part for a limited period to a tenant even if the tenant had already been inducted into possession but such sanction has to be obtained after a full an-i frank disclosure of all factors including the circumstances under which the tenant had been put in possession even before the Rent Controller's sanction was obtained and before an agreement in writing was .....

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l the materials before the Rent Controller while PG NO 251 seeking his sanction under Section 21. The fact that the respondents had also appeared before the Rent Controller and agreed to take the property on lease for a limited period of two years without demur cannot obliterate or nullify the fraud committed on the statute. This position has been succinctly pointed out in S.B. Noronah v. Prema Kumari, (supra) at page 287 in the following words: The fact that a landlord and a potential tenant to .....

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ghts of the parties to the tenancy that is to follow in terms of the sanction. This is the proper perspective from which the matter should be viewed. Forgetting this position, Mr. Rohtagi based his arguments on the footing that what has been held against the appellant was her perpetration of a fraud on the respondents and the respondents being the sufferers thereby. It was proceeding on those lines Mr. Rohtagi argued that the respondents were not illiterate but highly educated persons, that they .....

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ent were victims of a fraud but whether the appellant by herself or in collusion with the respondents had fraudulently suppressed the truth from the Rent Controller and induced him to give his sanction under Section 21 so as to restrict the tenancy rights already conferred upon the respondents to a period of two years and to enable the appellant to initiate execution proceedings straightaway against the respondents at the expiry of the lease period and have them evicted through process of court .....

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der Mohan Lal's,case (supra) para 28 page 17 and Joginder Kumar Butani v. R.P. Oberai, [ 1987] IV SCC 20 at 29 which are all to the effect that the delay on the part of the tenant to impugn the permission granted under Section 21 by the Rent Controller on the ground of fraud is a relevant factor to be taken into consideration by the Court while determining the question whether a tenant should not be summarily evicted under Section 21. The observations in those cases cannot be of any assistan .....

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