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TMI Blog1979 (4) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... he said premises at the rate of ₹ 1,000/- per month. The plaintiff purchased the suit property in the year 1961. The defendant executed an agreement of lease on 1-6-1961. Admittedly , the house property was built before 26th August, 1957 and is, therefore, not exempt from the provisions of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, hereinafter referred to as 'the Act'. It is also not disputed that the notice of vacancy as required by section 3 (1) of vacancy as required by section 3 (1) of vacancy as required by Section 3 (1) (a) of the Act has not been issued by the landlord and the letting to the tenant is in contravention of section 3 (5) of the Act. 3. One of the issues framed was, "Whether the Civil Court has jurisdiction to entertain the suit and grant the relief claimed"? The trial court decreed the suit answering the aforesaid issue in the affirmative. Hence the appeal, C. C. C. A. NO. 161 of 1974?" 4. It is needless to refer in detail to the facts in the connected appeal, C. C. C. A. No. 169 of 1974 filed against the judgment in O. S. No. 94 of 1972 which is filed by the defendant in O. S. No. 88 of 1971 for pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant further submits that up to 1960, all eviction petitions under the Rent Control Act were being entertained by the Rent Controllers only in spite of contravention of Section 3 of the Hyderabad Rent control Act or Section 3 of the Andhra Pradesh Rent Control Act. But, in Eswarajah's case (supra) a Division Bench of this Court observed that a tenancy created contrary to the provisions of Sections 3 of the Hyderabad Rent Control Act is illegal and void and as such, the Rent Controller has no jurisdiction. Subsequent to the said decision the parties in cases of similar nature, resorted to common law and filed suits against the tenants for possession on the ground of their title. This position continued up to 1974 when the supreme Court, while deciding a matter under the U. P. Rent Control Act, held in Murlidhar's case (supra) that the tenancies created in contravention of Section 7 of the U. P. Rent Control act which is similar to section 3 of the Hyderabad Rent Control Act or the A. P. Rent control Act are valid as between the parties and that there is a relationship of landlord and tenant. The supreme Court, in the said decision, agreed with the view expressed by a Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aiah v. Ahmed Khan (1960) 2 Andh WR 496, with reference to Section 3(3) of the Hyderabad Rent Control Act and Section 3 (5) of the A. P. Rent Control Act. Therefore, the Bench in Eswaraiah's case held that a contract entered into between a landlord and a tenant in violation of the provisions of Sec. 3(3) of the Hyderabad Rent Control Act is void for all purposes and, therefore no rights accrued to the tenant. It was further held that a suit for possession by the landlord would lie against the tenant in the civil court on the strength of his title. Therefore, the decision in Eswaraiah's case is not an obiter dictum. 9. We are inclined to agree with the contention of the learned counsel for the respondent. In fact, by a common judgment, the Division Bench disposed of the Second Appeal and two Civil Revision Petitions which had earlier come up before a single judge and were referred to a Bench a view of the Conflicting views in Fathima Bai v. State of Madras (supra) and Balaiah v. Ahmed Khan (1960) 2 AWR 496. The very question that was framed to be answered was: The short but important question is whether a tenancy created in contravention of the provisions of Section 3 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government and not inter se. even under Section 23 of the Indian Contract Act although the statute may in terms separately prohibit the act or omission and affix the penalty in a case of disobedience it does not necessarily follow that all transactions to which the penalty attaches are illegal. Some of the contracts, such as wagering contracts are void and unenforceable but still they have not been forbidden by law and it is only the enforcement of a wagering contract or a void contract that is barred, and the Court will not come to the assistance of the parties for enforcement of such a contract. But all collateral contracts have been treated to be valid. The learned Counsel places reliance on the following decisions :- St. John Shipping Corporation v. Joseph Bank Ltd. (1957) I QB 267, Gherulal v. Mahadeo Das AIR1959SC781 Dorairaj v. N. G. Rajan AIR1977Mad243 , Bhikanbhai v. Hiralal (1900) ILR 24 Bom 622, Abdulla v. Mammod (1903) ILR 26 Mad 156 and Nazaralli v. Babamiya AIR 1915 Bom 244 and submits that the aforesaid decisions and also the observations of the Supreme Court in Muralidhar's case (supra) make it abundantly clear that though the contract is contrary to the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation of any contract without any permission of the controller. The imposition of penalty for contravention of Section 3 is clear indication that a contract in contravention of Section 23 is forbidden. Section 23 of the Contract Act, therefore gets attracted." Further, from the preamble of the Hyderabad Rent Control Act, it is clear that it is passed in the interest of the public and therefore, the consideration or object of an agreement, if it is opposed to public policy, will be unlawful and void under Section 4 of the Hyderabad Rent Control Act the controller can give a vacant building to such person as he thinks fit, whether intimation of the vacancy is given or not under Section 3(1) and (2). This he can do for a public purpose as defined in Section 2 (1) of the Act. Therefore, the object or consideration of any agreement, if opposed to this public purposes, will render the agreement illegal and invalid and unenforceable. For this, he relies on Eswaraiah's case and other decisions in Mahmoud & Ispahani In re (1921) 2 KB 716, Bostel Bros. Ltd. v. Hurlock (1948) 2 All ER 312 Dennis & Co. Ltd. v. Munn (1949) 1 All ER 616 B. and B. Viennes Fashions v. Losane (1952) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n vacant or is about to fall vacant. Section 7-A District Magistrate's power to take action against unauthorised occupants: (1) Where in pursuance of an order of the District Magistrate under sub-section (2) of Section 7, the vacancy of any accommodation is required to be reported and is not reported, or where an order requiring any accommodation to be let or not to be let has been duly passed under sub-section (2) of Section 7 and the District Magistrate believes or has reason to believe that any person has in contravention of the said order occupied the accommodation or any part thereof, he may call upon the person in occupation to show cause, within a time to be fixed by him, why he should not be evicted therefrom provided that no order under this Section shall be passed if the District Magistrate is satisfied that there has been undue delay or it is otherwise inexpedient to do so." 15. It is true that the concerned provisions of the U. P. Rent Control Act are rather at variance with the provisions of either the Hyderabad Rent Control Act or the A. P. Rent Control Act. But, the principal question to be posed and answered is, what would be the effect, in the ultimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, on the basis of the decision of the Supreme Court in Muralidhar's case (supra) that notwithstanding the fact that the provisions of the U. P. Rent Control Act, in juxtaposition to those of the Hyderabad and A. P. Rent Control Acts, are not in some respects in pari materia, yet, because of the statutory obligation case under Section 7 (1) of the U. P. Rent Control Act, it was necessary for the landlord to have notified the vacancy and therefore, any formation of agreement of lease contravening the said provision would be illegal and void against the District Magistrate though not inter se between the parties; similarly without any hesitation, we conclude that contravention of Section 3 (3) or Section 3 (5) of the Hyderabad and A. P. Rent Control Acts respectively notwithstanding the agreement of lease would be null and void as against the Controller and not inter se between the landlord and the tenant, and the landlord herein would be estopped from denying that the appellant is a tenant. Further, the Act makes a distinction between a tenant otherwise than by virtue of an allotment order. Either way, therefore, he is a tenant though the tenant occupying the accommodation witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. It was held that the order is a clear and unequivocal declaration by the Legislature in the public interest that this particular kind of contract shall not be entered into. Likewise, in Bostle Bros. Ltd. v. Hurlock (supra) Dennis & Co. Ltd. v. Munn (supra) B. & B. Viennese Fashions v. Losane (supra) and Waman Shriniwas v. R. B. & Co. (supra) it is held that even an equal participant in the illegality is allowed relief by way of restitution though not on the contract. In none of these cases, the court has addressed itself to the question as to what would be the effect of contract inter se between the parties. 19. The following decisions cited by the learned counsel for the appellant provide guidance to a great extent. In St. John Shipping Corporation v. Joseph Bank Ltd. (supra) for the unilateral acts of the plaintiff in overloading the ship contrary to the Merchant Shipping Act, 1932, the Master was prosecuted and fined for the offence, and when the defendants tried to avoid the payment of freight due, on that ground, they were not allowed to do so and the Court granted a decree for the sum due. This shows that the Act did not render unlawful the contract of carriage but mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the agreement is opposed to public policy and is, therefore, hit by the provisions of Section 23 of the Contract Act, and consequently it should be held illegal and void cannot be acceded to either. 22. The predominant purpose of the public policy, as is stated earlier, is quite evident from the preamble of the statute itself. It is to prevent unreasonable eviction of tenants to regulate the leasing of buildings and the control of rent. 'Public Policy' has been defined by Winfield as 'a principle of judicial legislation or interpretation founded, on the current needs of the community.' Now, this would show that the interests of whole public must be taken into account but it leads in practice to the paradox that in many cases what seems to be in contemplation is the interest of one section only of the public, and a small section at that. The explanation of the paradox is that the courts must certainly weigh the interests of the whole community as well as the interests of a considerable section of it, such as tenants, for instance, as a class, as in this case. If the decision is in their favour it means no more than that there is nothing in their conduct which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of U. P. [1975]1SCR575 and that although there is no express provision in the A. P. Act corresponding to sub-section (3) of Section 3 of the Hyderabad Rent Control Act ( and sub-section (5) of Section 3 of the Andhra Pradesh Act) such a prohibition is implicit in its very scheme. Even otherwise I am of the opinion that the ratio of the decision in Eswaraiah's case cannot be supported in principle and is a negation of the very spirit and scheme of the Rent Control enactments, Mr. N. Rajeswara Rao, the learned Counsel for the respondent specifically agreed with us that the correctness of G. Eswariah's case is open to scrutiny by us, notwithstanding the rather narrow wording of the reference. 29. The relevant provisions of Hyderabad and Andhra Pradesh Acts have been set out in the judgment of Seetharam Reddy, J. and need not be repeated here. Both the acts oblige the landlords to intimate the vacancy as and when it arises. No such obligation is cast on the tenant. The landlord is enjoined not to let out the premises or to occupy it himself without giving such intimation and/or within fifteen days of giving such intimation unless, of course, he receives an intimation from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e landlord though it is he who is guilty of violation of law. The real sufferer would be the tenant who has in no way violated the law. As already stated, the law casts the obligation to give intimation on the landlord alone, and it is the landlord who is prohibited from occupying or leasing out the building No. obligation is created on the tenant to make an enquiry before entering into the lease agreement, whether the landlord has complied with the provisions of Section 3. 31. Now, on the other hand, by treating the lease as valid as between the landlord and tenant, in such cases, the object and scheme of Section 3 is in no way defeated or obstructed. It does not prevent the Controller/Authorised Officer from allotting the building for the purposes specified by the Act or from giving effect to such an order by evicting the person in occupation. Agreed that the landlord has not given the intimation or has otherwise violated the law, but how is that going to be remedied or cured by ignoring the validity of the tenancy as between the landlord and tenant? The landlord can always be dealt with and punished under Section 33 of the Hyderabad Act or Section 29 of the Andhra Pradesh Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute one, like say Section 7 of the Andhra Pradesh Act prohibiting any agreement or stipulation to receive any premium or other like sum in addition to the fair rent. The court should, therefore, give effect to it within those limits and for achieving its intended purpose, and not extend its sweep beyond its conceptual confines. Within its field, it should undoubtedly be given full play, but its field of operation should be unmistakably delineated. Viewed in this light, there is no warrant for holding that the contract of tenancy is illegal as between the landlord and tenant. Vis-`-vis the Controller/Authorised Officer, it undoubtedly is. 36. The above reasoning holds good even while examining whether the contract is opposed to public policy. In other words, the Court has to see the public policy sought to be served or furthered by the provisions in question and see whether by giving effect to the contract the public policy would suffer in any manner. While the public policy demands that the contract should be ignored vis-`-vis the Controller/Authorised Officer, the same public policy under lying the enactments as such demands that it should not be ignored as between the landlord a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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