Lachoo Mal Vs. Radhey Shyam  INSC
48 (10 February 1971)
CITATION: 1971 AIR 2213 1971 SCR (3) 693
U.P. Temporary Control of Rent and Eviction
Act, 1947, ss.
1(A) and 3-Construction after 1951-Agreement
that Act should apply-If binding upon landlord-Indian Contract Act (9 of 1872),
s. 23-Scope of.
The appellant was the tenant of the
respondents shop. As the latter wanted to make some constructions they entered
into ail agreement in 1962, according to which, the appellant was to vacate the
shop but reoccupy it on the same rent as soon as the construction was
completed. It was also agreed that all the sections of the U.P. (Temporary)
Control of Rent and Eviction Act, 1947, shall be fully applicable to the new
tenancy. After the construction was completed the appellant resumed possession
and offered rent. The respondent refused the rent and filed a suit for
In appeal, the High Court held that the
appellant was not entitled to the protection of the Act, because, the res-
pondent was entitled to rely on s. IA according to which nothing in the Act
shall apply to a building constructed on or after 1st January, 1951, and that
the agreement was unlawful within the meaning of s. 23 of the Indian Contract Act,
In appeal to this Court,
HELD : The general principle is that everyone
has a right to waive the advantage of a law, made for his benefit in his
private capacity, when a public right or public policy is not infringed
thereby. Section 1A was meant for the benefit of owners of buildings
constructed after January 1, 1951.
But there is no prohibition in the section
against a land- lord and his tenant entering into an agreement, that they would
not be governed by that section. If a particular owner did not want to avail
himself of the benefit of the section, there was no bar created by it to his
waiving or giving up or abandoning the advantage and no question of policy, or
public policy is involved. Therefore, the performance of the agreement in the
present case would not entail the transgression of any law and the agreement
was not void under s. 23 of the Indian Contract Act. [696 C; 69- 7 D-E; 698
A-C] Neminath Appayya Hanumannavar v.Jamboorao Sateppa Kochteri, A.I.R. (1966)
Mys. 154, approved.
Vita Food Products Incorporated v. Unus Co.
Ltd. (in Liquidation), (1939) AC. 277 at 291, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 18 of 1968.
Appeal by Special leave from the judgment and
order dated April 14,,1967 of the Allahabad High Court in Second Appeal No. 307
694 V.M. Tarkunde, Urmila Kapoor and R. K.
Khanna, for the appellant.
S. V. Gupte and M. V. Goswami, for the
The Judgment of the Court was delivered by
Grover, J This is an appeal by special leave from a judgment of the Allahabad
High Court and involves the question whether the appellant, who was the tenant,
was entitled to the benefit of s. 3 of U.P. (Temporary) Control of Rent and
Eviction Act, 1947, hereinafter called the "Act".
The facts are not in dispute. The appellant
had been occupying a shop in Mathura belonging to the respondent from a very
long time, at a monthly rental of Rs. 18.37. In 1962 the respondent wanted to
construct rooms on the upper Storey of the shop for his own residence. This
construction could possibly be made only if the appellant vacated the shop for
some period. On June 4, 1962, the appellant and the respondent entered into an
agreement . After reciting the above facts it was agreed that the shop would
be. vacated by the appellant on the condition that as soon as the required
construction had been completed he would resume possession of the shop. At this
stage the following clauses of the agreement may be set out.
"1. On this day the second party has
withdrawn his possession from the shop bearing No. 1/2C, situate at Tilakdwar,
and has given the same to the first party.
2. The first party shall get the shop
constructed within thirty days and would then hand over the possession of the
same to the second party.
3. At present a sum of Rs. 18-6-0 per mensem,
which includes house tax and water tax, is being paid by the second Party to
the first party as rent. After the construction of the shop, the first party
shall be entitled to get the same, amount as rent from the second party. All
the sections of the U.P.
Rent Control and Eviction Act shall be fully
applicable to this house. The first party shall in no case be entitled to
derive benefits from it as the property built after 1-1-51." After the
construction had been made and the appellant had resumed his possession of the
shop the appellant offered rent to the respondent but the latter did not accept
the same. Ultimately lie deposited the rent from April 1, 1962 to July 31, 1963
in court under s. 7 C of the Act. The respondent served a notice April 20, 1963
apparently under the provisions of the 695 Transfer of Property Act purporting
to terminate the tenancy of the appellant. This was followed by a suit which
the respondent filed for ejectment of the appellant and for arrears of rent,
damages etc. The Munsif dismissed the suit holding that the appellant was
entitled to the protection conferred by s. 3 of the Act which was applicable.
The District Judge, on appeal, took the contrary view and decreed the suit.
The' High Court affirmed the judgment of the District Judge. It was held, inter-alia,
that the, respondent was, entitled to rely on s. 1 A of the Act and the
appellant could not be given the benefit of s. 3.
Now there can be no manner of doubt that the
tenancy between the appellant and the respondent was governed by the provisions
of the Act prior to the reconstruction of the premises. It appears to have been
accepted that when the respondent made the re-construction after the agreement
mentioned above in 1962 the buildings came to be constructed within the terms
of s. 1-A of the Act: That section says that nothing in the Act shall apply to
any building or part of a building which was under erection or was constructed
on or after January 1, 1951. It will have to be decided whether it was open to
the respondent to give up the benefit of this provision or waive it by means of
an agreement of the nature which was entered into between the appellant and the
respondent in June 1962.
According to the preamble on the cessation of
the applicability of sub-rule 2 of rule 81 of the Defence of India Rules after
September 30, 1946 it was considered expedient owing to the shortage of
accommodation in the State of Uttar Pradesh to provide for the continuance
during admitted period of powers to control the letting and "the rent of
accommodation and to prevent the eviction of tenants therefrom. Section 3
imposed restrictions on eviction. No suit could be filed in any civil court
against the tenant for his eviction from any accommodation except on one or
more of the grounds mentioned in sub-s. (1) 'of that section without the
permission of the District Magistrate or of the Commissioner to whom a revision
lay against the order of the District Magistrate. Section 5 contained
provisions relating to control of rent. The ether provisions of the Act need
not be noticed. It has never been disputed that the Act was enacted for
affording protection to the tenants against eviction except in the manner
provided by the Act.
It was also meant to regulate the letting of
accommodation, fixing of rent etc., the provisions relating to which were all
intended to confer benefits on the tenants against unreasonable and capricious
demands of the landlords. At the same time' it appears that the legislature was
conscious of the fact that the Act might retard and slacken the pace of
construction of new buildings because the landlords would naturally be
reluctant to invest 696 money in properties the letting of which would be
governed by the stringent provisions of the Act. It was for that purpose that
the saving provision in s. 1-A seems to have been inserted. The essential
question that has to be resolved is whether S. 1-A was merely in the nature of
an exemption in favour of the landlords, with regard to the buildings
constructed after January 1, 1951 and conferred a benefit on them which they
could give up or waive by agreement or contractual arrangement and whether the
consideration or object of such an agreement would not be lawful within the
meaning of s. 23 of the Indian Contract Act.
The general principle is that every one has a
right to waive and to agree to waive the advantage of a law or rule made solely
for the benefit and protection of the individual in his private capacity which
may be dispensed with without infringing any public right or public policy.
Thus the maxim which sanction the nonobservance of the statutory provision is
cuilibet licat renuntiare juri pro se introducto. (See Maxwell on
Interpretation of Statutes, Eleventh Edition, pages 375 & 376.) If there is
any express prohibition against contracting out of a statute in it then no
question can arise of anyone entering into a contract which is so prohibited
but where there is no such prohibition it win have to be seen whether an Act is
intended to have a more extensive operation 'as a matter of public policy. In
Halsbury's Laws of England, Volume 8, Third Edition, it is stated in paragraph,
248 at page 143 :
"As a general rule, any person can enter
into a binding contract to waive the benefits conferred upon him by an Act of
Parliament, or, as it is said, can contract himself out of the Act, unless it
can be shown that such an agreement is in the circumstances of the particular
case contrary to public policy.
Statutory conditions may, however, be imposed
in such terms that they cannot be waived by agreement, and, in certain
circumstances, the legislature has expressly provided that any such agreement
shall be void." In the footnote it is pointed out that there are many
statutory provisions expressed to apply "notwithstanding any agreement to
the contrary", and also a stipulation by which a lessee is deprived of his
right to apply for relief against forfeiture for breach of covenant (Law of
Property Act, 1925). Section 23 of the Indian Contract Act provides "The
consideration or object of an agreement is lawful, unless- it is forbidden by
law; or 69 7 is of such a nature that, if permitted, it would defeat the
provisions of any law or is fraudulent; or involves or implies injury to the
person or property of another; or the Court regards it as immoral, or opposed
to public policy.
In each of these cases, the consideration or
object of an agreement is said to be unlawful. Every agreement of which the
object or consideration is unlawful is void." It has never been the case
of the respondent that the consideration or object of the agreement which was
entered, into in June 1963 was forbidden by law. Reliance has been placed
mainly on the next part of the section, namely, that it is of such a nature
that it would defeat the provision of any law and in the present case it would
be s. 1-A of the Act.
Now s. 1-A does not employ language
containing a prohibition against or impose any restriction on a landlord and a
tenant entering into an agreement that they would not be governed by that
section. We concur with the view expressed in Neminath Appayya Hanumannavar v.
Jamboorao Satappa Kocheri(1) that the words "if permitted it would defeat
the provisions of any law" in s. 23 of the Contract Act defer to
performance of an agreement which necessarily entails the transgression of the
Provisions of any law. What makes an agreement, which is other-wise legal, void
is that its performance is impossible except by disobedience of law.
Clearly no question of illegality can arise
unless the performance of the unlawful act was necessarily the effect of an
agreement. The following observations of Lord Wright in Vita Food Products
Incorporated v. Unus Company Ltd.(1) (in Liquidation) are noteworthy in this
connection "Nor must it be forgotten that the rule by which contracts not
expressly forbidden by statute or declared to be void are in proper cases
nullified for disobedience to a statute is a rule of public policy only, and
public policy understood in a wider sense may at times be better served by
refusing to nullify a bargain save on serious and sufficient grounds." We
are unable to hold that the performance of the agreement which was entered into
between the parties in the present case would involve an illegal or unlawful
act. In our judgment s. 1-A.
(1) A. I.R.  Mysore 154.
(2)  A.C. 277, 293.
698 was meant for the benefit of owners of
buildings which were under erection or were constructed after January 1, 1951.
If a particular owner did not wish to avail
of the benefit of that section there was no bar created by it in the way of his
waiving, or giving up or abandoning the advantage or the benefit contemplated
by the section. No question of policy, much less public, policy, was involved
and such a benefit or advantage could always be waived. That is what was done
in the present case and we are unable to agree with the High Court that the
consideration or object of the agreement entered into between the parties in
June 1962 was unlawful in view of s. 23 of the Contract Act.
In the result the appeal is allowed, the
judgment of the High Court is set aside and that of the trial court restored.
The appellant will be entitled to his costs in this, court.
V.P.S. Appeal allowed.