TMI Blog2009 (8) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the Court of Small Causes on June 30, 2003 in RAE R Suit No. 1233/3730 of 1986 on grounds of (i) default in payment of taxes and water charges as stipulated under Section 13(3)(a) and (ii) reasonable and bona fide need of the landlords, respondents 1 to 3 for their own use and occupation in terms of Section 13(1)(g) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (`the Bombay Rent Act' or `the Act' hereinafter). Its appeal (No. 752/2003) against the decree was dismissed by the Division Bench of the Small Causes Court by judgment and order dated April 28, 2005. 4. The appellant initially filed a writ petition [W.P. (C) No. 7361 of 2005] seeking to challenge the orders of ejectment. The Bombay High Court declined to entertain it on the ground that the appellant had a remedy available to it under the Act itself. It, accordingly, disposed of the writ petition by order dated March 15, 2007 leaving it open to the appellant to file a civil revision application as provided under Section 35F(2) of the Act. The appellant then moved the High Court in Civil Revision Application No. 78 of 2007 challenging the orders of its ejectment. The High Court admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In Atma Ram Properties the tenant, having lost before the Rent Controller preferred an appeal before the Rent Control Tribunal. The Tribunal stayed the tenant's eviction but subject to the condition that he would deposit in Court Rs. 15,000/- per month, in addition to the contractual rent that might be paid directly to the landlord. The deposits made in the Court were not permitted to be withdrawn by any of the parties until the appeal was finally decided. The tenant challenged the condition attached to the stay order before the High Court in a petition filed under Article 227 of the Constitution of India. The High Court allowed the writ petition and set aside the condition imposed by the Tribunal. The effect of the order of the High Court was that during the pendency of the appeal before the Tribunal the tenant would continue to remain in occupation of the suit premises on payment of an amount equivalent to the contractual rate of rent . Against the High Court order the landlord came to this Court in appeal. This Court allowed the appeal, set aside the High Court order and restored the order passed by the Tribunal. 7. In Niyas Ahmed Khan, the position was quite different. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en made, except where such decree or order for eviction is liable to be reopened under the proviso to Section 3 of the Delhi Rent Control (Amendment) Act, 1976 (18 of 1976). 10. Mr. Lalit submitted that under the Delhi Rent Control Act a tenant suffering a decree or order of eviction lost the status of `tenant' and was consequently stripped of all the protection (including, against increase in rent) provided by the Rent Control Act and in such a case it would be open to the appellate or the revisional authority to enhance the monthly rent payable by him as a condition for granting stay of execution of the decree or order as held in Atma Ram Properties. This exclusionary clause in the definition of tenant was a special feature of the Delhi Rent Act and the Rent Acts of some other States, e.g. Madhya Pradesh, Rajasthan, etc. But the position under the Bombay Rent Act was materially different. In the definition of tenant in the Bombay Act there was no exclusionary clause. Moreover, in the Bombay Rent Act there were a number of provisions creating an express bar against any enhancement of rent. 11. Learned Counsel then took us through various provisions of the Bombay Rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eding tenant. 12. He then referred to the definition of standard rent as contained in Section 5(10) of the Act. The provision is as under: 5(10). standard rent in relation to any premises means,- (a) where the standard rent is fixed by the Court and the Controller respectively under the Bombay Rent Restriction Act, 1939, or the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944, such standard rent; or (b) when the standard rent is not so fixed,- subject to the provisions of Section 11, (i) the rent at which the premises were let on the first day of September 1940, or (ii) where they were not let on the first day of September 1940, the rent at which they were last let before that day, or (iii) where they were first let after the first day of September 1940, the rent at which they were first let, or (iii-a) notwithstanding anything contained in paragraph (iii), the rent of the premises referred to in Sub-section (1-A) of Section 4 shall, on expiry of the period of five years mentioned in that Sub-section, not exceed the amount equivalent to the amount of net return of fifteen percent, on the investment in the land and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act was indeed replaced by the Maharashtra Rent Control Act, 1999 that came into force with effect from March 31, 2000. But Mr. Rohatgi, learned Senior counsel appearing for the respondents, strongly contended that the Maharashtra Rent Control Act completely belied the hopes expressed by the Court under which it had refrained from striking down the offending provisions in the Bombay Rent Act. Mr. Rohatgi submitted that the Maharashtra Rent Control Act merely brought about some cosmetic changes but retained the substance of the earlier Bombay Rent Act. Referring to the definition of standard rent in Section 7(14) of the Maharashtra Rent Control Act, Mr. Rohatgi submitted that it merely shifted the date from September 1, 1940 to October 1, 1987 for pegging the standard rent which continued to be attached to the premises and was not amenable to any revision on change of tenancy. 16. The issue of reasonableness of the provisions of the Maharashtra Rent Control Act, 1999 or the Bombay Rent Act do not arise in this case and, therefore, we refrain from making any observations in that regard but we do feel that the reasonableness or otherwise of the provisions of the Maharashtra Rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually allowed the second appeal, setting aside the eviction decrees passed by the courts below. The High Court judgment was challenged before this Court in appeal. One of the grounds on which the High Court judgment was assailed by the appellants-landlords was that after their contractual tenancy was determined the two original tenants were reduced to the status of statutory tenants having no heritable interest in the demised premises and on their death the right to prosecute their appeal did not survive for their heirs and legal representatives. In support of the contention reliance was placed on two earlier decisions of the Court in Anand Nivas (Private) Ltd. v. Anandji Kalyanji Pedhi (1964) 4 SCR 892 (arising under Bombay Rents, Hotel and Lodging House Rates Control Act, 1947) and Jagdish Chander Chatterjee v. Sri Kishan (1973) 1 SCR 850 arising under the Rajasthan Premises (Control of Rent and Eviction) Act, 1950. A three-Judge Bench of this Court rejected the contention raised on behalf of the appellants. The decision in Damadilal pointed out that the term `statutory tenancy' was borrowed from the English Rent Acts and along with the expression certain legal notions, pecul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a contractual tenant. 21. The case of Ganpat Ladha arose under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and the premises from which the tenant was sought to be evicted was a shop let out to him for business purpose. The trial court and the appellate court decreed the suit on the findings that the tenant had failed to make payment of the arrears of rent even after a valid notice of demand was given to him by the landlord and further that he was not entitled to the protection of Section 12(3)(b) of the Act. The tenant challenged the decrees passed by the courts below before the High Court in an application under Article 227 of the Constitution. During the pendency of the writ petition before the High Court the tenant died and her son was impleaded in her place to pursue the reliefs prayed for in the writ petition. The High Court eventually allowed the writ petition on the ground that despite the default in payment of arrears of rent, the trial court could exercise its discretion in favour of the tenant and decline to pass a decree of eviction. The matter finally came to this Court in appeal preferred by landlord. A three-Judge Bench of the Court allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Section 5(11)(c) of the Bombay Rent Act. It needs to be stated here that in Ganpat Ladha the earlier decision in Damadilal was not brought to the notice of the Court and the Court did not go into the question whether a tenant on his death left behind any heritable estate or interest in the tenanted premises. 24. Gian Devi is a decision by a Constitution Bench of five Judges. The case arose under the Delhi Rent Control Act, 1958 and the tenanted premises was once again a shop. The question that the Court framed for its consideration was as under: To state it more precisely, the question is whether the heirs of a deceased tenant whose contractual tenancy in respect of commercial premises has been determined, are entitled to the same protection against eviction afforded by the Act of the tenant 25. In this case, the Constitution Bench considered both the earlier decisions in Damadilal and in Ganpat Ladha. It also considered the earlier seven-Judge Bench decision in V. Dhanapal Chettiar v. Yesodai Ammal (1980) 1 SCR 334 besides several other decision of the Court. In Gian Devi, as in Damadilal, the Court observed that the expression statutory tenant was used in English Ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court in the decision of the seven-Judge Bench in the case of V. Dhanapal Chettiar v. Yesodai Ammal which we have earlier quoted appear to conclude the question. In paragraph 33 of the decision the Court expressed its inability to agree with the observations made by the three-Judge bench in Ganpat Ladha and in paragraph 35 it stated more explicitly that the view expressed by the Court in Ganpat Ladha and the observations made therein do not lay down the correct law. 26. In conclusion the Constitution Bench, in paragraph 36 of the decision, held and observed as follows: Accordingly, we hold that the Rent Act in question defines a tenant in substance to mean `a tenant who continues to remain in possession even after the termination of the contractual tenancy till a decree for eviction against him is passed', the tenant even after the determination of the tenancy continues to have an estate or interest in the tenanted premises and the tenancy rights both in respect of residential premises and commercial premises are heritable. The heirs of the deceased tenant in the absence of any provision in the Rent Act to the contrary will step into the position of the deceased t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffering a decree of eviction would himself lose the statutory protection against increase in rent. The submission is indeed attractive but a little scrutiny would show that it is quite misconceived. It may be recalled that the decision in Damidilal was under the Madhya Pradesh Accommodation Control Act, 1961 and Gian Devi Anand under the Delhi Rent Control Act, 1958. In both the Acts the definition of tenant had the qualification that Mr. Lalit termed as the exclusionary clause: tenant means...but does not include, --- (A) any person against whom an order or decree for eviction has been made In both the decisions, the definition of tenant as appearing in the Madhya Pradesh and the Delhi Acts respectively were reproduced. But for some reason, in those two decisions, the Court did not take any notice of that part of the definition. In the Constitution Bench decision in Gian Devi Anand, after reproducing in full the definition of tenant as contained in Section 2(l) of the Delhi Rent Control Act, the Court observed (at the end of paragraph 25): It is therefore, clear from the definition of tenant, whether in the original Act or in the amended Act, that the tena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of the person who happens to be the tenant of the commercial premises and who was running the business out of the income of which the family used to be maintained, is itself a great loss to the members of the family to whom the death, naturally, comes as a great blow. Usually, on the death of the person who runs the business and maintains his family out of the income of the business, the other members of the family who suffer the bereavement have necessarily to carry on the business for the maintenance and support of the family. A running business is indeed a very valuable asset and often a great source of comfort to the family as the business keeps the family going.... The Legislature could never have possibly intended that with the death of a tenant of the commercial premises, the business carried on by the tenant, however flourishing it may be and even if the same constituted the source of livelihood of the members of the family, must necessarily come to an end on the death of the tenant, only because the tenant died after the contractual tenancy had been terminated. It could never have been the intention of the Legislature that the entire family of a tenant depending upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 13 (laying down the grounds on which alone a tenant could be evicted) and reproduced the two provisions as follows: 2 (i) `tenant' means any person by whom or on whose account rent is payable for a building or rented land and includes a tenant continuing in possession after the termination of the tenancy in his favour, but does not include a person placed in occupation of a building or rented land by its tenant, unless with the consent in writing of the landlord, or a person to whom the collection of rent or fees in a public market, cart-stand or slaughter house or of rents for shops has been framed out or leased by a municipal, town or notified area committee. 13. Eviction of tenants- (1) A tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of this Act or otherwise and whether before or after the termination of the tenancy, except in accordance with the provisions of this section, or in pursuance of an order made under Section 13 of the Punjab Urban Rent Restriction Act, 1947, as subsequently amended. 33. Having thus taken note of the two provisions, the Court arrived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Mani Subrat Jain (except that in this case the decree of eviction was passed on contest and not on the basis of any agreement between the parties). Following the earlier decision in Mani Subrat Jain this Court allowed the tenant's appeal and held that he could not be evicted in execution of the decree since after the decree was made the rented premises came under the Karnataka Rent Control Act as a result of the territorial extension in regard to the application of the Act. In H. Shiva Rao too the Court's strong sympathy for the tenant is evident from paragraphs 5 and 7 of the judgment. 36. Dilip v. Mohd. Azizul Haq is the third and the last decision in the second set of decisions cited by Mr. Lalit. In this case the High Court had taken the view that an appeal preferred by the tenant against a decree of eviction passed by the trial court was not covered by the expression in a suit or proceeding filed and pending against the tenant in any court or before any authority as occurring in Clause 13-A of the C.P. and Berar Letting of Houses Rent Control order, 1949. Clause 13-A of the order was as follows: No decree for eviction shall be passed in a suit or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mercy of the landlord. The legislature intervened and brought in the Rent Act, severely restricting the grounds for enhancement of rent and for eviction of the tenant from the rented premises, thus regulating the relationship between the landlord and the tenant beyond the general law under the Transfer of Property Act, 1882. In this regard the Court responded in equal, if not greater measures. But after about three quarters of a century and three generations later when things are no longer the same and the urban centres are faced with newer problems, some of those having their origin in the Rent Act itself, there is the need to take a re-look on the Court's attitude towards the relationship between the landlord and the tenant and to provide for a more level ground in the judicial arena. 39. The way this Court has been looking at the relationship between the Landlord and the Tenant in the past and the shift in the Court's approach in recent times have been examined in some detail in the decision in Satyawati Sharma v. Union of India and Anr. (2008) 5 SCC 287. In that decision one of us (Singhvi, J.) speaking for the Court referred to a number of earlier decisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d whether the tenants of premises let for non-residential purposes should continue to avail the benefit of implicit exemption from eviction in the case of bona fide requirement of the landlord despite see-saw change in the housing scenario in Delhi and substantial increase in the availability of buildings and premises which could be let for non -residential or commercial purposes . 42. The decision in Satyawati Sharma then referred to the doctrine of temporal reasonableness and in paragraph 32 observed as follows: It is trite to say that legislation which may be quite reasonable and rational at the time of its enactment may with the lapse of time and/or due to change of circumstances become arbitrary, unreasonable and violative of the doctrine of equality and even if the validity of such legislation may have been upheld at a given point of time, the Court may, in subsequent litigation, strike down the same if it is found that the rationale of classification has become non-existent . 43. We reaffirm the views expressed in Satyawati Sharma and emphasise the need for a more balanced and objective approach to the relationship between the landlord and tenant. This is not to sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te; and (ii) up to what point of time is the tenant liable to pay rent at the contractual rate and when does he become liable to pay compensation for use and occupation of the tenancy premises unbound by the contractual rate of rent to the landlord? The Court answered the first issue as follows: We are, therefore, of the opinion that the tenant having suffered a decree or order for eviction may continue his fight before the superior forum but, on the termination of the proceedings and the decree or order of eviction first passed having been maintained, the tenancy would stand terminated with effect from the date of the decree passed by the lower forum. In the case of premises governed by rent control legislation, the decree of eviction on being affirmed, would be determinative of the date of termination of tenancy and the decree of affirmation passed by the superior forum at any subsequent stage or date, would not, by reference to the doctrine of merger have the effect of postponing the date of termination of tenancy. The second issue was answered as follows: With effect from that date (the passing of the decree of eviction), the tenant is liable to pay mesne profit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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