Raval & Co. Vs. K. C. Ramachandran
& Ors [1973] INSC 238 (11 December 1973)
ALAGIRISWAMI, A.
ALAGIRISWAMI, A.
RAY, A.N. (CJ) KHANNA, HANS RAJ MATHEW,
KUTTYIL KURIEN BHAGWATI, P.N.
CITATION: 1974 AIR 818 1974 SCR (2) 629 1974
SCC (1) 424
CITATOR INFO:
F 1974 SC2331 (4) RF 1975 SC1750 (8) APR 1976
SC 869 (5) RF 1978 SC1518 (9,11) E 1979 SC1745 (7,15,17) D 1986 SC1444 (4) R
1987 SC2117 (21) D 1988 SC 458 (8) D 1989 SC1110 (15) E&D 1991 SC 884 (14)
ACT:
Tamil Nadu Buildings (Lease and Rent Control)
Act (18 of 1960). S. 4(1), 7-Definition of "landlord" and
"tenant" under Applicability to contractual tenancies and statutory
tenancies-Fixation of fair rent-Landlord whether entitled to apply for fixation
of fair rent during subsistence of contractual tenancy-Interpretation of
statutes.
Constitution of India, Art. 141 And
precedents-General observations in Supreme Court decision-Binding nature of
Evidence Act, 1972, Sec. 92-Variation in permission of registered lease deed
Oral evidence regarding variation barred.
HEADNOTE:
On the tenants' appeal, the Full Bench of the
Madras High Court held that the Act controls both contractual and statutory
tenancies and it enables both landlords and tenants to seek the benefit of
fixation of fair rent.
Thereafter, the matter came up before a
Single Judge of the High Court who applying the provisions of the' Act to the
facts of the-case, held that the Act did not apply to the premises in question.
The Division Bench reversed this decision, In the appeal by special leave the
tenants mainly contended that a landlord has no right to apply for the fixation
of a fair rent at a figure higher than the contractual rent, where there was a
subsisting contract of tenancy.
Dismissing the appeal,
HELD : (per majority and Bhagwati, JJ.
Contra) The present Act which replaces the 1949 Act adopts a completely new
scheme of its own and provides for every contingency, i.e. in 'the relationship
of landlord and tenant. The provisions of the Act show that the Madras
Legislature deliberately proceeded on, the basis that fair rent was to be fixed
which was to be fair both to the landlords as 'well as to the tenants, and that
only the poorer class of tenants needed protection. 'the assumption that the
Act like ill rent acts, is intended only for the to on of tenants is not
warranted by the provisions of the Act. It is clear therefore, that the fair
rent under the present Act is payable during the contract period as well as
after the expiry of the contract period. [636C-F] The analysis. of the Act
shows that it has a scheme of its own and it is intended to provide a complete
code in respect of. both contractual tanancees. the definitions of the term
"landlord" and "tenant" show that the Act applies to
contractual tenancies,as well as to. cases of statutory tenants and their
landlords. On some supposed general principles governing all Rent Acts it
cannot be argued that such fixation can only be for the benefit of the tenants
when the Act clearly lays down that both landlords and tenants can apply for
fixation of fair. rent. A close reading of the Act shows that the fair rent is
fixed for the building and it is payable by whoever is the-tenant whether a
contractual tenant or statutory tenant. What is fixed is not the fair rent
payable by the tenant or to, the landlord who applies for fixation of fair rent
but fair rent for thebuilding somethings like an incident of the tenure,
regarding; the building. [637F] 630 The general observations to the contrary in
Bhaiya Punjalal Bhagwanddin v. Dave Bhagwat Prabhuprasad [1963] 3 S.C.R. 312
and Manujendra v. Purendu Prasad [1967] 1 S.C.R. 475, held obiter.
Sri Brij Raj Krishna v. S. K. Shaw and Bros.
[1951] S.C.R.
145, Hem Chand V. Sham Devi, I.L.R. [1955]
Punj, 36, R.
Krishnamurthy v. Parthasarathy A.I.R. 1949
Mad. 780, distinguished.
Abbashails case [1964] 5 S.C.R. 157 and
Mangilal v.Sugarchand Rathi [1964] 5 S.C.R. 239, referred to.
Per Mathew and Bhagwati, JJ : Two basic
considerations must guide our approach to the question whether a landlord can,
during the subsistence of the contractual tenancy, apply for fixation of fair
rent under section 4(1) of the Act. The first is that the rent which is the
result of contract between the parties must continue to bind them so long as
the contract subsists, unless there is anything in the statute which expressly
or by necessary implication overrides the contract. It is to counter act the in
justice resulting from in equality in bargaining power and to bring about
social or distributive justice that social legislation interferes with sanity
of contract. Ordinarily, we do not find and indeed it would be a strange and
rather incomprehensible phenomenon, that legislation intervenes to disturb the
sanctity of contract for the benefit of a stronger party who does not need the
protective bind of the legislature. Secondly the Act has been enacted inter
alia, with the object of controlling rents of residential and nonresidential
buildings and preventing unreasonable diction of tenants. Tamil Nadu Act 18 of
1960 is in its essential character as also in its object and purpose similar to
what may conveniently be described rent control legislation, in other States,
such as Maharashtra, Gujarat, West Bengal and Madhya Pradesh. The general
purpose and intendment of rent control legislation and its positive thrust and
emphasis on the protection of the tenant cannot be lost sight of when we are
construing a similar legislation like the Tamil Nadu Act 18 of 1960 [642C]
Bhaiya Punjalal Bhagwanddin v. Dave Bhagwat prasad Prabhuprasad [1963] 3 S.C.R.
312, Mangi Lal v. sugarchand Rathi [1964] 5 S.C.R. and Manujendra v. Pwendu
prasad [1967] 1 S.C.R. 475 referred to.
Having regard to the basic character of the
statute as a rent control legislation and the scheme of its provisions and
reading sec. 4(1) in its contextual setting and in the light of the other
provisions of the statute, the conclusion is inescapable that the ward
"landlord" in sec. 4(1) is used in a limited sense and it does not
include contractual landlord. The landlord does not have the right to apply for
fixation of fair rent during the subsistence of the contractual tenancy. It is
only when the contract of tenancy is lawfully determined that he becomes
entitled to apply for fixation of fair rent, for it is only then that he can
recover fair rent higher than the agreed rent from the statutory tenant, there
being no contract of tenancy to bind him down to the agreed rent. [646G] (2)
Per majority : General observations in earlier decisions of this Court should
be confined to the facts of those case. Any general observation cannot apply in
interpreting the provisions of an Act unless this Court has applied its mind to
and analysed the provisions of that particular Act. Therefore, the observations
in (1967) 1 S.C.R. 475, that rent acts are not ordinarily intended to interfere
with contractual leases and are Acts for the protection of tenants and are
consequently restrictive and not enabling conferring no now right but
restricting the existing rights either under the contract or under the general law,
should not be held to apply to all rent Acts irrespective of the scheme of
those acts and their provisions. The present Act did not proceed on the basis
that the legislation regarding rent control was only for the benefit of the
tenants. It wanted the legislation to be fair both to the landlord and the
tenant. [834B] (per Mathew and Bhagwati,JJ). The meaning of the term landlord'
must not be confined to that given in the definition or to its ordinary
etymological meaning but must be understood in the context of the setting in
which it occurs, and the scheme and object of the Act. The Provisions of the
Act, particularly of sec. 7, are clearly restrictive in character and not
enabling provisions empowering the landlord to recover the fairrent where it is
higher than the agreed rent. This is the only rational 631 construction which
can be placed on the relevant provisions of the Act relating to control of rent
and such a construction is not only compelled by grammar and language but also
accords with the broad general considerations in interpreting the rent control
legislation.[646B] Cog v.Hakes(1890) A.C. 15, and Whethered v. Calcutta(842)5
Scctt. N.R. 409,referred to.
(3)Any variation of rent reserved by
registered lease deed must be made by another registered instrument. The
agreement between the landlord and the tenant by which the rent was increased
being in variation of a written contract, evidence of that was barred under
section 92 of the Evidence Act.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 50 of 1968 and 1201 of 1970.
From the judgment and Order dated the 20th
January 1966, and' 26th November 1968 of the Madras High Court in Writ Appeals
Nos. 1124 of 1963 and 153 of 1966.
K.S. Ramamurthy and S. Gopalakrishnan, for
the appellant (in both the appeals).
S.V. Gupte and A.S. Nambiar, for respondent
Nos. 1-3 (in both-., the appeals).
S. Govindaswaminathan, A.V..Rangam, N.S.
Sivam and A. Subshashini, for respondent No. 5 (in both the appeals).
B.R. Agrawala, for intervener (in C.A.
50/68).
The Judgment of A.N. Ray, C.J., H.R. Khanna
and A. Alagiri-swami, JJ. was delivered by Alagiriswami, J. The dissenting
Opinion of' K.K. Mathew and P.N. Bhagwati JJ. was delivered by Bhagwati, J.
ALAGIRISWAMI, J. The appellants are the
tenants of a property bearing door Nos. 16 and 17 on the Poonamallee High Road
in the city of Madras. They became tenants of this building in May 1929, when
the property was with one of the predecessors in title of the present
landlords, who are the respondents in these appeals. Though, the appellants
became tenants in 1929 a registered lease deed came into existence only in 1935
under which the lease was to run upto 1-5-1969.
The lessee was entitled to renewal on the
same terms, and conditions for another period of fifteen years. The monthly
rent agreed upon was Rs. 225/and a sum of Rs. 225/was payable as an annual
contribution towards repairs and Rs. 220/towards public charges and taxes. In
1949 the parties mutually agreed that the tenants were to pay a 25 per cent
increase in rent and also certain other amounts, The present landlords
purchased the property in 1962 and soon after filed an application under
Section 4 of the Madras (now Tamil Nadu) Buildings (Lease and Rent Control)
Act, 1960 for fixation of fair rent. Thereupon the tenants filed writ Petition
No. 1124 of 1963 seeking, to restrain the landlords from proceeding with that
petition. The learned Single Judge who heard the petition felt that in view of
a long, series of decisions of Madras High Court under the various Rent Control
Acts in force in Madras that they applied also to contractual 632 tenancies in
the matter of payment of rent as well as eviction, the matter should be
considered by a Full Bench in view of the decisions of this Court in Rent
Control cases from certain other States.
The Full Bench after an elaborate
consideration came to the conclusion that the Act controls both contractual as
well as statutory tenancies that it is a complete Code, and enables both
landlords and tenants to seek the benefit of fixation of fair rent, whether a
contractual tenancy prevails or it has been determined. Thereafter the matter
again came up before the same learned Single Judge who, applying the provisions
of the Act to the facts of the case held that the Act did not apply to the
premises in question. On appeal by the landlords a Division Bench of the High
Court held that the premises were not exempted from the provisions of the Act
and the Rent Controller has therefore jurisdiction to entertain and dispose of
on merits the application for fixation of fair rent filed by the landlords.
These two appeals are against the judgments of the Full Bench (reported in 1966
2 MLJ 68) and the Division Bench respectively.
Before we go further into a discussion of the
questions that arise :it is necessary to look into certain relevant provisions
of the Act.
Clause (6) of section 2 of the Act defines
landlord thus :
"Landlord" includes the person who
is receiving or is entitled to receive the rent of a building, whether on his
own account .or on behalf of another or on behalf of himself and others or as
an agent, trustee, executor, administrator, receiver or' .,guardian or who
would so receive the rent or be entitled to receive the rent, if the building
were let to a tenant;" Clause 8, in so far as it is relevant, defines
tenant as follows "tenant" means any person by whom or on whose
account rent is payable for a building and includes the surviving spouse, or
any son, or daughter, or the legal representative of a deceased tenant who had
been living with the tenant in the building as a member of the tenant's family
up to the death of the tenant and a person continuing in possession after the
termination of the tenancy in his favour......
Section 4 provides for an application for
fixation of a fair rent by the tenant as well as the landlord. The fair rent
for any residential building is to be six per cent gross return per annum on
the total cost of the building if it is residential and nine percent if it is
nonresidential. The total cost has to be calculated by taking the cost of const
ruction at prescribed rates less depreciation at prescribed rates as well as
the market value of the site on which the building stands. It is to include
allowances for such considerations as locality, features of architectural
interest, accessibility to market, dispensary or hospital, nearness to the
railway station or educational institution and such ,other amenities as may be
prescribed.
633 Section 5 provides that when the fair
rent of a building has been fixed no further increase shall be permissible
except in cases where some addition, improvement or alteration has been carried
out at the landlord's expense and at the tenant's request. Similarly,. if there
is a decrease or diminution in the accommodation or amenities provided,, the
tenant may claim a reduction in the fair rent.
Section 6 provides for payment of additional
sums in cases where the taxes and cesses payable to local authorities are
increased.
Section 7 prohibits the landlord from
claiming or receiving or stipulating for the payment of any premium or anything
in excess of' fair rent. It also provides that where a fair rent has not been
fixed the landlord shall not claim anything in excess of the agreed rent.
Section 10 deals with the eviction of tenants
and lays down the conditions under which an eviction could be asked for.
One of those conditions mentioned in
sub-section (3) is when the Landlord requires. a residential building for his
own occupation or a non-residential building for the purpose of his business.
Clause (d) of sub-section (3) provides that where the tenancy is for a
specified period agreed upon between the landlord and the tenant, the landlord
shall not be entitled to apply under that sub-section before the expiry of such
period.
Sections 12 and 14 provide for recovery of
possession by landlord for repairs or for reconstruction.
Section 17 provides that the landlord is not
to interfere with the amenities enjoyed by the tenant.
Section 30 exempts from the provisions of the
Act (1) any building the construction of which was completed after the
commencement of the Act, and (2) any residential building in respect of which
the monthly rent payable exceeds two hundred and, fifty rupees. We shall refer
to other details as and when they become relevant.
The above short analysis of the Act would
show that the Act provides for every contingency that is likely to arise in the
relationship of landlord and tenant.
On behalf of the appellants reliance is
placed upon two decisions of this Court, Bhaiya Punjalal Bhagwanddin v. Dave
Bhagwat prasad Prabhuprasad (1963 3 SCR 312) and Manujendra v. Purendu Prasad
(1967 1 SCR 475). They are cases dealing with eviction. In those two cases it
was held, broadly speaking, that the provisions of the Acts there under consideration
were in addition to and not in derogation of the provisions of the Transfer of
Property Act. There are certain general observations in those two decisions
upon which reliance was placed to contend that they apply to cases of fixation
of rent also. The argument was that as it was held in those cases that the Acts
did not provide the landlord with additional rights which he did not possess
under his contract of tenancy, similarly where there was a subsisting 634
contract of tenancy it is not open . to the landlord to take advantage of the
provisions of the Act to apply for fixation of a fair rent at a figure higher
than the contract rent.
We are not called upon in this case to
consider whether those two cases were correctly decided. But we must point out
that the general observations therein should be confined to the facts of those
cases. Any general observation ,cannot apply in interpreting the provisions of
an Act unless this Court has applied its mind to and analysed the provisions of
that particular Act. We may also point out that in both those cases the
contract of 'tenancy was not subsisting. In a sense, therefore, the
observations therein were not really necessary for deciding those cases. We may
also point out that in Rai Brii Raj Krishna v. S.K. Shaw Bros. (1951 SCR 145)
dealing with the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947
and interpreting section 11 of that Act this Court observed as follows :
'.'Section 11 begins with the words
'Notwithstanding anything contained in any agreement or law to the,contrary',
and hence any attempt to import the provisions relating to the law of transfer
of property for the interpretation of the section would seem to be out of
place. Section II is a self-contained section, and it is wholly unnecessary to
go outside the Act for determining whether a tenant is liable to be evicted or
not, and under what conditions he can be evicted. It clearly provides that a
tenant is not liable to be evicted except on certain conditions, and one of the
conditions laid down for the eviction of a month to month tenant is nonpayment
of rent." 'Similarly in Shri Hem Chand v. Shrimati Sham Devi (ILR 1955
Punj 36) which dealt with the Delhi and Ajmer Merwara Rent Control Act, section
13(i) of which provided that no decree or order for the recovery of possession
of any premises shall be passed by any court in favour of the landlord against
a tenant, notwithstanding anything to the contrary contained in any other law
or any contract, it was h.-Id that the Act provided the procedure for obtaining
the relief of ejectment and that being so the provisions of s. 106 of the
Transfer or Property Act had no relevance. Both these cases were referred to in
the decision in Bhaiya Punjalal Bhagwanddin v. Dave Bhagwatprasad Prabhuprasad.
Therefore, the following observations in Manujendra ,v. Purendu Prosad that
"Rent Acts are not ordinarily intended to interfere with contractual
leases and are Acts for the protection of tenants and are consequently
restrictive and not enabling, conferring no new rights of action but
restricting the existing rights either under the contract or under the general
law." should not be held to apply to all Rent Acts irrespective of the
scheme of those Acts and their provisions. The decision of the Madras High
'Court in R. Krishnamurthy v.Parthasarathy (AIR 1949 Mad. 780-1 949 1 MLJ 412)
where it was held that section 7 of the Madras Buildings (Lease and Rent
Control) Act of 1946 had its own scheme 635 of procedure and therefore there
was no question of an attempt to reconcile that Act with the Transfer of
Property Act and that an application for eviction could be made to the Rent
Controller even before the contractual tenancy was terminated by a notice to
quit, should not have been summarily dismissed on the grounds that it was
contrary to the decisions of this Court in Abbasbhai's Case (1964 5 SCR 157)
and Mangilal's Case (1964 5 SCR 239) and therefore was not a correct law,
without examining the provisions of that Act.
Be that as it may, we are now concerned with
the question of fixation of a fair rent. The legislation regarding control of
rents started during the Second World War. In Madras first two orders under the
Defence of India Rules were issued as the Madras House Rent Control Orders,
1941 and the Madras Godown Rent Control Order, 1942. In1945 these orders were
reissued with slight changes, as the Madras House Rent Control Order, 1945 and
the Madras Non-Residential Buildings Rent Control Order, 1945. These were
replaced by the Madras Buildings (Lease and Rent Control) Act, 1946.
Under that Act for the first time both the
tenant as well as the landlord were given the right to apply for fixation of a
fair rent. This Act was later replaced by the Madras Buildings (Lease and Rent
Control) Act, 1949, which again had a similar provision. But the important
thing to note about the fixation of a fair rent under both these Acts is that
the fair rent was related to the rents prevailing in April 1940 and only a
fixed percentage of increase from 8 11/3 to 50 per cent depending upon the rent
payable was allowed. The 1960 Act which replaced the 1949 Act adopted a
completely new scheme of its own. It provided for the fixation of a fair rent
on the basis of the cost of construction and the cost of land and after allowing
for depreciation provided for a return of 6 per cent in the case of residential
buildings and 9 per cent in the case of nonresidential buildings. It also
provided for increase in rent for such factors as locality, nearness to railway
station, market, hospital, school etc. Another significant fact is that all new
buildings constructed after 1960 were exempt from the scope of the Act. Still
another departure was that the Act applies, in the case of residential
buildings, only if the monthly rent does not exceed Rs. 250.
The Act also provides for fixation of fair
rent under the new provisions even though fair rent for the building might have
been fixed under the earlier repealed enactments. All these show that the
Madras Legislature had applied its mind to the problem of housing and control
of rents and provided a scheme of its own. It did not proceed on the basis that
the legislation regarding rent control was only for the benefit of the tenants.
It wanted it to be fair both to the landlord as well as the tenant. Apparently
it realised that the pegging of the rents at the 1940 rates had discouraged
building construction activity which ultimately is likely to affect every body
and therefore in order to encourage new constructions exempted them altogether from
the provisions of the Act. It did not proceed on the basis that all tenants
belonged to the weaker section of the community and needed protection and that
all landlords 636 belonged to the better off classes. It confined the
protection of the Act to the weaker section paying rents below Rs. 250. It is.
clear, therefore, that the Madras Legislature deliberately proceeded on the
basis that fair rent was to be fixed which was to be fair both to the landlords
as well as to the tenants and that only the poorer classes of tenants needed
protection. The facile assumption on the basis of which an argument was
advanced before this Court that all Rent Acts are intended for the protection
of tenants and, therefore, this Act also should be held to be intended only for
the protection of tenants breaks down when the provisions of the Act are
examined in detail. The provision that both the tenant as well as the landlord
can apply for fixation of a fair rent would become meaningless if fixation of
fair rent can only be downwards from the contracted rent and the contract rent
was not to be increased. Of course, it has happened over the last few years
that rents have increased enormously and that is why it is argued on behalf of
the tenants that the contract rents should not be changed. If we could
contemplate a situation where rents and prices are coming down this argument
will break down. It is a realisation of the fact that prices and rents have
enormously increased and therefore if the rents are pegged at 1940 rates there
would be no new construction and the community as a whole would suffer that led
the Madras Legislature to exempt new buildings from the scope of the Act, it
realised apparently how dangerous was the feeling that only "fools build
houses for wise men to live in". At the time the 1960 Act was passed the
Madras Legislature had before it the precedent of the Madras Cultivating
Tenants (Payment of Fair Rent) Act, 1956. That Act provides for fixation of
fair rent. It also provides that the contract rent, if lower, will be payable
during the contract period. Even if the contract rent is higher only the fair
rent will be payable. After the contract period is over only the fair rent is
payable. The Madras Legislature having this Act in mind still made only the fair
rent payable and not the contract rent if it happens to be lower.
It is clear, therefore, that the fair rent
under the present Act is payable during the contract period as well as after
the expiry of the contract period.
It was argued that the basis of the decisions
in Rai Brij Raj Krishan's Case and Shri Hem Chand's Case was the nonobstante
clause in those two Acts. But it is well settled that the intention that a
legislation should, take effect notwithstanding any earlier legislation on the
subject can be both explicit and implicit and that is the Position in the
present case. We do not also feel called upon to refer to the decisions in
Glossop v. Ashley (1921 2 KB 450), a Newell v. Crayford Cottage Society (1922 1
KB 656), and Kerr v. Bryde (1923 Act 16), nor to the various statements
regarding the law in Megarry's work on the Rent Acts relied upon by Sri K. S.
Ramamurthy on behalf of the appellants.
They are based on the relevant provisions of
the Act, in force in England particularly section 3(1) of the Increase of Rent
& Mortgage Interest (Restrictions) Act, 1920 whichreads.
637 "Nothing in this Act shall be taken
to authorise any increase of rent except in respect of a period during which
but for this Act the landlord would be entitled to obtain possession." The
provisions of the Act under considerations show that the are to take effect
notwithstanding any contract even during the subsistence of the contract. We
have already referred to the definition of the terms 'landlord' and 'tenant' which
applies both to subsisting tenancies as well as tenancies which might have come
to an end. We may also refer to the provision in section 7(2) which lays down
that where the fair rent of a building has not been fixed the landlord shall
not claim anything in addition to the agreed rent, thus showing that the fair
rent can be fixed even where there is an agreed rent. That is why we have
earlier pointed out that the various English decisions which provide for
fixation of rent only where the contractual tenancy has come to an end do not
apply here. We may also refer to subsection (3) of section 16 which deals with
cases where a landlord requires a residential or non-residential building for
his own use. Clause (d) of that sub-section provides that where the tenancy is
for a term the landlord cannot get possession before the expiry of the term,
thus showing that in other cases of eviction covered by section 10 eviction is
permissible even during the continuance of the contractual tenancy if the
conditions laid down in section 10 are satisfied.
The Madras High Court reviewed all the
decisions of this Court' except the latest one in Manujendra v. Purendu Prosad.
We have already pointed out that the criticism made in that decision regarding
Krishnamurthy's Case was not justified. We are in agreement with the view of
the Full Bench of the Madras High Court that the various decisions of this
Court were based upon particular provisions of the Acts. which were under
consideration, mainly the Bombay Act which is vitally different from the Madras
Act. A close analysis of the Madras Act shows that it has a scheme of its own
and it is intended to provide a complete code in respect of both contractual
tenancies as well as what are popularly called statutory tenancies. As noticed
earlier the definition of the term 'landlord' as well as the term 'tenant'
shows that the Act applies to contractual tenancies as well as cases of
"statutory tenants" and there.
landlords. On some supposed general
principles governing all Rent Acts it cannot be argued that such fixation can
only be for the benefit of the tenants when the Act clearly lays down that both
landlords and tenants can apply for fixation of fair rent. A close reading of
the Act shows that the fair rent is fixed for the building and it is payable by
whoever is the tenant whether a contractual tenant. or statutory tenant. What
is fixed is not the fair rent payable by the tenant or to the landlord who
applies for fixation of fair rent act fair rent for the building, something
like an incident of the fair regarding the building.
We have then to deal with Civil Appeal No.
1201 of 1970.The learned Single Judge considering that as the total amount
annually in respect of these premises was Rs. 5032/-, which lakhs the rent
payable to exceed Rs. 400/a month, the building was outside 15-M602Sup. CI 74
638 the scope of the Act and therefore the petition for fixation of fair rent
does not lie. (This provision was removed by an Amending Act of 1964). The
learned Judges of the Division Bench on the other hand held that the agreement
of the year 1949 between the landlord and the tenant by which the rent was
increased was one in variation of a written contract and therefore evidence of
it is barred under section 92 of the Evidence Act. Clearly any variation of
rent reserved by a registered lease deed must be made by another registered
instrument. We are not able to accept the argument of Sri K. S. Ramamurthy on
behalf of the tenants that the agreement of 1949 was one by the landlord to
give up his right to apply for fixation of fair rent in consideration of the
additional rent agreed to be paid by the tenant and is, therefore, not covered
by section 92 of the Evidence Act.
The correspondence between the parties makes
it clear beyond doubt that the agreement was to pay increased rent. If this
agreement is left out of account the rent payable is below Rs. 400/a month,
and, therefore, the decision of the Division Bench is correct.
Before concluding we must refer to one other
argument on behalf of the appellants. Under section 30 of the Act, as
originally enacted, any residential building the rent of which exceeded Rs. 250
/per month and any non-residential building whose rent exceeded Rs. 400/a month
were outside the scope of the Act. In 1964 the Act was amended so as to provide
that all non-residential buildings would be within the scope of the Act. This
amendment was attacked on the ground that it contravened the provisions of Art.
19(1) of the Constitution. In view of our finding earlier that this case should
be decided on the basis of the monthly rent being below Rs. 400/this argument
does not fall to be considered.
In the result the appeals are dismissed. The
appellants will pay the respondents' costs.
BHAGWATI J. We have had the advantage of reading
the judgment prepared by our brother Alagiriswami, J., and though we, agree
with him in regard to the decision in Civil Appeal No. 1201 of 1970, we find it
difficult to assent to the view taken by him in Civil Appeal No. 50 of 1968.
The facts giving rise to the two appeals have been stated clearly and
succinctly in the judgment given by our learned brother and we think it would
be a futile exercise to reiterate them. We may straight away proceed to examine
the question which arises for consideration in. Civil Appeal No. 50 of 1968.
The question is whether a landlord can during the subsistence of the
contractual tenancy, apply for fixation of fair rent under s. 4 of the Tamil
Nadu Buildings (Lease and Rent Control) Act, 1960 (hereinafter referred to as the
Tamil Nadu Act 18 of 1960). The determination of this question depends on the
true interpretation of certain provisions of the Tamil Nadu Act 18 of 1960 and
we may, therefore, refer to those provisions and see what is their proper
meaning and effect.
The long title and the preamble of the Tamil
Nadu Act 18 of 1960 show that it is enacted "to amend and consolidate the
law relating to the regulation of the letting of residential and
non-residential buildings and the control of rents of such buildings and the
prevention of unreasonable eviction of tenants there from in the State of Tamil
.Nadu". See, 2, cl. (6) gives an inclusive definition of 'landlord' and
according to this definition, 'landlord' includes "the person who is
receiving or is entitled to receive rent of a building, whether on his own
account or on behalf of another or on behalf of himself and others or as an
agent, trustee, executor, administrator, receiver or guardian or who would so
receive the rent or be entitled to receive the rent, if the building were let
to a tenant". Thus the owner of a building which becomes vacant would be
'landlord' within the meaning of that expression as defined in s. 2, cl. (6)
and so also would be the landlord during the subsistence of the contractual tenancy
as also after the termination of the contractual tenancy where the tenant
continues to remain in possession of the building.
'Tenant' is defined in s. 2, cl. (8) to mean
"any person by whom or on whose account rent is payable for a building and
includes the surviving spouse, or any son, or daughter, or the legal
representative of a deceased tenant who had been living with to tenant in the
building as a member of the tenant's family up to the death of the tenant and a
person continuing in possession after the termination of the tenancy in his
favour". This definition is wide enough to include not only a contractual
tenant but also a tenant remaining in possession of the building affect the
termination of the contractual tenancy. Section 3 enacts detailed provisions
regulating the letting of residential and non-residential buildings. The broad
scheme of this section is that when a building becomes vacant, the landlord is
required to give notice of the vacancy to the authorised officer and if the
building is required "for the purposes of the State or Central Government
or of any local authority or of any public institution under the control of any
such Government or for the occupation of any officer of such Government",
the authorised officer may give necessary intimation in that behalf to the
landlord and on receipt of such intimation, the landlord would be bound to
deliver possession of the building to the authorised officer or to the allottee
named by the authorised officer, as the case may be, and the Government would
be deemed to be the tenant of the landlord on such terms as may be agreed upon
between the landlord and the Government, or in default of agreement, determined
by the Controller. The rent payable by the Government to the landlord would be
the "fair rent, if any, fixed for them. building under the provisions of
this Act and if no fair rent has been so fixed, such reasonable rent as the
authorised officer may determine", but "the reasonable rent fixed by
the authorised officer-shall be subject to such fair rent as may be fixed by
the Controller". Section 4 provides for fixation of fair rent of a
building on the application of the tenant or the landlord. Sub-s. (1) of the
section is material and it says that "The Controller shall, on, application
by the tenant or the landlord of a building and .after holding such inquiry as
the Controller thinks fit, fix the fair rent for such building in accordance
with the principles set out in subsection (2) or in sub-section (3) as the case
may be, and such other principles as may be prescribed". Sub-s. (2) lays
down the principles for fixation of fair rent of residential building and
sub-s. (3), for fixation of fair rent of non-residential building. The fiar
rent is to be such as would provide 6 % gross return per annum on 640 the total
cost of the building, if it is residential and 9 gross return per annum on the
total cost of the building, if it is non-residential. The total cost of the
building is to be computed by taking the cost of construction as calculated according
to the prescribed rates less depreciation also at the prescribed rates and
adding to it the market value of that portion of the site on which the building
is constructed and making allowances for such considerations as locality in
which the building is situated, features of architectural interest,
accessibility to market, dispensary or hospital, nearness to the railway
station or educational institution and such other amenities as may be
prescribed.
It may be pointed out that under the Madras
Buildings (Lease and Rent Control) Act, 1946 and the Madras Buildings (Lease
and Rent Control) Act, 1949, which preceded the Tamil Nadu Act 18 of 1960, the
scheme of fixation of fair rent was different, in that the fair rent was
related "to the prevailing rate of rent in the locality for the same or
similar accommodation in similar circumstances during the twelve months period
to 1st April, 1940" and only a fixed percentage of increase varying from 8
1/3 % to 50 % was allowed on such rate of rent, depending upon whether it
exceeded or did not exceed a certain limit' But the Legislature while enacting
the Tamil Nadu Act 18 of 1960 made a departure from that scheme presumably
because it felt that in view of the staggering and disproportionately heavy
fall in, the purchasing power of the rupee over the last 30 years, it was most,
unrealistic to peg the fair rent to the level of rents prevailing during the
period of 12 months prior to 1st April, 1940 and allow only an ad hoc
percentage of increase, and therefore, in s. 4, sub-ss. (2) and (3), it adopted
a different basis for fixation of fair rent which would not unduly depreciate
the yield permissible to the landlord and at the same time, be not extortionate
or exploitative of the tenant. Now once the fair rent of a building is fixed
under s. 4, sub-s. (1), no further increase in such fair rent is 'permissible
except in cases where some addition, improvement or alteration has been carried
out at the expense of the landlord and if the building is then in the
occupation of a tenant, at his request and similarly, if there is a decrease or
diminution in the accommodation or amenities, the tenant may claim reduction in
such fair rent. Vide s. 5. Section 6 provides that where the amount of the
taxes and cesses payable in respect of a building to a local authority for any
half year commencing on 1st April, 1950 or on any later date exceeds the amount
of taxes and cesses payable for the half year commencing on 30th September,
1946 or for the first complete half year after the date on which the building
was first let out, whichever is later, the landlord shall be entitled to claim
such excess from the tenant in addition to the rent payable for the building.
The consequences of fixation of fair rent are set out in s. 7, sub-s (1) and
(3). Subsection (1) says that where the Controller has fixed the fair rent of a
building"(a) the landlord shall not claim, receive or stipulate for the
payment of (i) any premium or other like sum in addition to such fair rent, or
(ii) save as provided in section 5 or section 6, anything. in, excess of such
fair rent 641 (b)...... any premium or other like. sum or any rent paid in
addition to, or in excess of, such fair rent whether before or after the date
of the commencement of this Act, in consideration of the grant, continuance or
renewal of the tenancy of the building after the date of such commencement,
shall be refunded by the landlord to the person by whom it was paid or at the
option of such person, shall be otherwise adjusted by the landlord;
Provided that where before the fixation of
the fair rent, has been paid in excess thereof, the refund or adjustment shall
be limited to the amount paid in excess for the period commencing on the date
of application by the tenant or landlord under sub-section (1) of section 4 and
ending with the date of such fixation." Sub-sec. (3) declares that any
stipulation in contravention of sub-s. (1) shall be null and void. These are
the only provisions of the Tamil Nadu Act 18 of 1960 which have a direct bearing
on the determination of the question before us, but reference was also made to
certain other provisions of that Act dealing with eviction of tenants for the
purpose of drawing support by way of an a logical reasoning from the decisions
of this Court interpreting those provisions and we must, therefore, briefly
advert to them. Section 10 confers protection on the tenant against eviction
"in execution of a decree or otherwise" by providing that he shall
not be evicted except in accordance with the provisions of that section or
sections 14 to 16. Sub-ss. (2) and (3) of s. 10 set out the grounds on which
the tenant may be evicted by the landlord. One of the grounds-that set out in
cl. (a) of sub-s. (3)-is that the landlord requires the building, if
residential, for his ,own occupation or for the occupation of his son, and if
non-residential, for a business which he or his son is carrying on, but in
respect of this ground, there is a limitation imposed by cl. (d) of sub-s. (3)
that when the tenancy is for a specified period agreed upon between the
landlord and the tenant, the landlord shall not be entitled to apply for
possession under sub-s. (3) before the expiry of such period. Sections 12 to 14
provide for recovery of possession of the building by the landlord for repairs
or reconstruction. These provisions are not material and we need not refer to
them in detail. Then we go straight to s. 30 which exempts certain buildings
from the operation of the Act. Every new building the construction of which is
completed after the commencement of the Act is exempted under cl. (i). The
reason obviously is that the legislature wanted to encourage construction of
new buildings so that more and more buildings would become available for
residential as well as non-residential purposes and that would help relieve
shortage of accommodation. Cl. (ii) exempts any residential building or part
thereof occupied by any tenant, if the monthly rent paid by him exceeds Rs.
250/Here the object of the Legislature clearly was that the protection of the
beneficent provisions of the Act should be available only to ,small tenants
paying rent not exceeding Rs. 250/per mouth, as they 642 belong to the weaker
sections of the community and really need protection against exploitation by
rapacious landlords.
Those who can afford to pay higher rent would
ordinarily be well-to-do people and they would not be so much in need of
protection and can, without much difficulty, look after themselves.
It is in the light of these provisions of the
Tamil Nadu Act 18 of 1960, that we have to consider whether a landlord can,
during the subsistence of the contractual tenancy, apply for fixation of fair
rent under. s. 4, sub-s. (1). Two basic considerations must guide our approach
to this question.
The first is that the agreed rent which is
the result of contract between the parties must continue to bind them so long
as the contract subsists, unless there is anything in the statute which
expressly or by necessary implication overrides the contract, It is true that with
the decline of the doctrine of laissez faire and the assumption by the State of
a more dynamic and activists role, the principle of sanctity of contract which
is one of the pillars of a free market economy, has in a number of cases been
eroded by legislation. But if we examine such legislation it will be apparent
that this has happened invariably in aid of the weaker party to the contract.
Where there is unequal bargaining power between the parties, freedom of
contract is bound to produce injustice and social legislation therefore steps
in and overrides the. contract, with a view to protacting the weaker party from
the baneful Consequences of the contract. It is to contract the injustice
resulting from inequality in bargaining power and to bring about social or
distributive justice that social legislation interferes with sanctity of
contract. It seeks to restore the balance in the scales which are otherwise
weighted in favour of the stronger party which has larger bargaining power.
Ordinarily we do. not find, and indeed it would be a strange and rather
incomprehensible phenomenon, that legislation intervenes to disturb the
sanctity of contract for the benefit of a stronger party who does not need the
protective hand of the legislature. This consideration we must constantly keep.
before us while construing the relevant provisions of the Tamil Nadu Act 18 of
1960.
Secondly the Tamil Nadu Act 18 of 1960, as
its long title and preamble show, has been enacted inter alia with the object
of controlling rents of residential and nonresidential buildings and preventing
unreasonable eviction of tenants. Now, there can be no doubt that in so far as
it is calculated to prevent unreasonable eviction of tenants, the Tamil Nadu
Act 18 of 1960 is a protective measure intended to safeguard tenants against
indiscriminate eviction by landlords. Equally, by controlling the rents by
keeping them within fair and reasonable limits, the Tamil Nadu Act 18 of 1960
seeks to protect tenants against greedy and rapacious landlords who taking
advantage of the great scarcity of housing accommodation which prevails in
almost all urban areas, may extract excessive and unconscionable rent from
tenants. The Tamil Nadu Act 18 of 1960 is in its essential character as also in
its object and purpose similar to what may conveniently be described as rent
control legislation, in other States, such as Maharashtra, Gujarat, West Bengal
and Madhya Pradesh.
643 Now it is well settled by decisions of
this Court that rent control Acts are "not ordinarily intended to
interfere with contractual leases and are Acts for the protection of tenants
and are consequently restrictive and not enabling or conferring any rights of
action but restricting the existing rights either under the contract or under
the general law." That is what this Court said in Manuiendra Dutt v.
Purendu Prosad Roy Chowdhury & Ors.(1), while dealing with the Calcutta
Thika Tenancy Act, 1949. The same view was taken by this Court in Bhaiya
Punjalal Bhagwanddin v. 'Dave Bhagwat Prasad Prabhuprasad(2) in relation to
Bombay Rents, Hotel and Lodging House Rates. Control Act, 1947 which prevails
in Maharashtra and Gujarat and which has long title and preamble in almost the
same terms as the Tamil Nadu Act 18 of 1960. This Court said in that case: "the
Act,", that is the Bombay Rent Act "intended therefore to restrict
the rights which the landlords possessed either for charging excessive rents or
for evicting tenants". The Madhya Pradesh Accommodation Control Act, 1955
was also construed in the same way by this Court in Mangilal v. Sugarchand
Bathi.(3) This general purpose and intendment of rent control legislation and
its positive thrust and emphasis on the protection of the tenant cannot be lost
sight of when we are construing a similar legislation like the Tamil Nadu Act
18 of 1960.
We may now turn to examine the relevant
provisions of the Tamil Nadu Act 18 of 1960 against the background of these
general considerations. Section 4, sub-s. (1) contemplates that an application
for fixation of fair rent of a building may be made by the tenant or the
landlord. The definition of "tenant", as we have pointed out above,
includes contractual tenant as well as tenant remaining in possession of the
building after determination of the contractual tenancy, that is, statutory
tenant, and both contractual tenant and statutory tenant can, therefore, apply
for fixation of fair rent under S. 4, sub-S. (1). The Government, who is deemed
to be the tenant of the landlord under S. 3, sub-s. (5), can also similarly
avail of the provision for fixation of fair rent in s. 4, sub-s. (1).
The question is as to who are the persons
comprehended within the expression 'landlord' who can apply for fixation of
fair rent under S. 4, sub-s. (1). The landlord, where the Government is deemed.
to be the tenant under. S. 3, sub-s. (5), would certainly be entitled to make
such application and, having regard to the wide definition of the expression
'landlord', which includes not only contractual landlord but also statutory
landlord, if one may use that expression to describe the counterpart of
statutory tenant, it was common ground between the parties that the statutory
landlord can also avail of this provision, but the dispute was whether the
contractual landlord is within the ambit of this provision. Can he apply for
fixation of fair rent under S. 4, sub-s. (1)p ? Now prima facie according to
'the definition as also according to its plain natural connotation, the
expression 'landlord' includes contractual landlord and it might, therefore,
appear at first blush, on a purely literal construction, that the contractual
landlord can make an application for fixation of fair rent under s.
4, sub-s. (1). But is well settled that a
definition clause (1) [1967] 1 S.C.R. 475.
(2) [1963] 3 S.C.R. 312.
(3) [1964] 5 S.C.R. 239.
644 is not to be taken as substituting one
set of words for another or as strictly defining what the meaning of a term
must be under all circumstances, but as merely declaring what may be
comprehended within the term, when the circumstances require that it should be
so comprehended. It would, therefore, always be a matter of interpretation
whether or not a particular meaning given in the definition clause ,applies to
the word as used in the statutory propriety. That would depend on the subject
and the context. Moreover, it is equally well established that the meaning of
words used in a statute. is to be found, not so much in strict etymological
propriety of language, nor even in popular use, as in the subject or occasion
on which they are used and the object which is intended to be achieved.
The context, the ,collocation and the object
of the words may show that they are not intended to be used in the sense which
they ordinarily bear, but are meant to be used in a narrow and limited sense.
Lord Herschell pointed out in Cox v. Hakes (1) "It cannot, I think, be
denied that, for the purpose of construing any enactment, it is right to look,
not only at the provision immediately under construction, but at any others
found in connection with it which may throw light upon it, and afford an
indication that general words employed in it were not intended to be applied
without some limitation." However wide in the abstract, general words must
be understood as used with reference to the subject matter in the mind of the
legislature and limited to it. Thus, in Whethered v. Calcutta(2) a statute
which, reciting the inconveniences arising from church wardens and overseers
making clandestine rates, enacted that those officers should permit "every
inhabitant" of the parish to inspect the rates under a penalty for
refusal, was held not to apply to a refusal to one of the church wardens, who
was also an inhabitant. As the object of the statute was to protect those in
habitants who had previously no access to the rates (which the church wardens
had, the meaning of the term 'inhabitants' was limited to them. The same
approach in interpretation must be adopted by us in the present case.
We must not allow ourselves to be unduly
obsessed by the meaning of 'landlord' given in the definition or by its
ordinary etymological meaning but we must examine the scheme of the relevant
provisions of the statute, the contextual setting in which s. 4, sub-s. (1)
occurs and the object which the legislation is intended to achieve, in order to
determine what is the sense in which the word 'landlord' is used in s. 4.
sub-s. (1)-whether it is intended to include contractual landlord.
It is necessary for this purpose to consider
what are the consequences of fixation of fair rent, for that furnishes the key
to the solution of the problem before us. The fair rent, when fixed, becomes an
attribute or incidence of the building and there can be no change in it except
in the circumstances set out in s. 5. When the fair rent is fixed, three possibilities
may arise. The fair rent may be the same as the agreed rent in which case no
difficulty arises.
Or the fair rent may be less than the agreed
rent. Where that happens, s. 7, sub-s. (i), ,el. (a) operates and it provides
that the landlord shall not be entitled to claim, receive or stipulate for
payment of anything in excess of the [1890] 15 A.C. 506.
(2) [1842] 5 Scott. N.R, 409.
645 fair rent. The landlord, can, in such a
case, claim, receive or recover only the fair rent and nothing more, despite
the contract of tenancy which provides for payment of higher rent. To that
extent sanctity of contract is interfered with by the legislation in order to
protect the tenant against exploitation by the landlord so that the landlord
may not take undue advantage of shortage of housing accommodation and extract
excessive rent from a needy and helpless tenant. The stipulation in the
contract of tenancy for payment of higher rent would in such a case be clearly
in contravention of sub-s. (1) of s. 7 and would be null and void under s. 7,
sub-s. (3). But what happens if the fair rent fixed is higher than the agreed
rent? Can the landlord claim to recover such fair rent from the tenant,
overriding the contract of tenancy which provides for payment of lesser rent?
We do not think so. There is nothing in s. 7 or in any other provision of the
Tamil Nadu Act 18 of 1960 which can by any process of construction be read as
authorising the landlord to override the contract of tenancy and claim fair
rent higher than the agreed rent from the tenant. If the legislative intent
were that, even though the contract of tenancy is subsisting, the landlord
should be entitled to recover fair rent higher than the agreed rent, we should
have expected the Legislature to say so in so many terms, as it has done in s.
7, sub-s. (1), cl. (a) when it wanted the landlord not to be able to recover
the agreed rent where it is in excess of the fair rent. It may no noted that
whenever the Legislature intended to confer on the landlord a right to recover
any amount which he would not otherwise have under the contract or the general
law, the Legislature has done so in clear and specific language as in s. 6 of
the Act. But here we do not find any such provision, either express or
necessarily implied. We may also profitably compare the language of the
provision in s. 3, sub-s. (5).
There it is provided that "the
reasonable rent fixed by the authorised officer-shall be subject to such fair
rent as may be fixed by the Controller". The words "subject to"
clearly take in both kinds of cases, where the fair rent fixed is higher as
well as lower than the reasonable rent. in s. 7, sub-s. (1), cl. (a), however
the Legislature has departed from this phraseology and instead of saying that
the agreed rent shall be subject to the fair rent or the rent payable by the
tenant shall be the fair rent, the Legislature has merely laid an embargo on
the landlord prohibiting him from recovering anything in excess of the fair
rent. This provision is clearly, without doubt, restrictive in character. it is
not an enabling provision empowering the landlord to recover the fair rent
where it is higher than the agreed rent. But quite apart from these
considerations, there is inherent evidence in s. 7 itself which strongly
reinforces our interpretation and that is to be found in sub-s. (3).
That sub-section says that any stipulation
in. contravention of sub-S. .shall be null and void. If, therefore, there is a
stipulation in the contract of tenancy for payment of rent higher than the fair
rent, it would be invalid. , Such a stipulation would not be enforceable by the
landlord against the tenant. Only the fair rent would be payable by the tenant.
If, however, there is a stipulation for payment of rent which is less than the
fair rent, it would not be in contravention of sub-sec. (1) and hence would not
be invalidated by sub-s. (3) but would remain 646 enforceable and binding on
the parties and if that be so, the landlord would not be entitled to claim the
fair rent in breach of such stipulation. Section 7, sub-s. (3) clearly
indicates that the stipulation in the contract of tenancy as regards rent is
overridden only where the fair rent is less than the agreed rent and not where
it is higher than the agreed rent. This is the only rational construction
which, in our opinion, can be placed on the relevant provisions of the Act
relating to control of rent. It is not only compelled by grammar and language,
but also accords with the broad general considerations we have already
discussed. It is difficult to believe that the Legislature should have chosen
to interfere with contractual rights and obligations in favour of the landlord
who is ordinarily, in view of the acute shortage of housing accommodation, in a
stronger and more dominating position than the tenant qua bargaining power. The
Legislature while enacting a social legislation could not have intended to
confer on the landlord a new right of action a right to override the contract
of tenancy and to impose a greater burden on the tenant than that permitted
under the contract of tenancy. It would be a startling proposition to assume
that the Tamil Nadu Legislature was so solicitous of the welfare of the
landlord, who is admittedly, as a class, stronger party and much more favorably
situated in respect of bargaining power than the tenant, that it enacted a
provision in the Act for relieving the landlord against the consequences of an
unwise contract entered into by him with open. eyes. To take such a view would
be to pervert the legitimate end of a social legislation and proselytise its
true object and purpose.
These considerations impel us to the
conclusion that the Legislature could not have. intended that the landlord
should have the right to apply for fixation of fair rent during the subsistence
of the contractual tenancy. If it was not the intention of the Legislature to
benefit the landlord by giving him a right to override the contract of tenancy
and claim fair rent higher than the agreed rent from the tenant during the
subsistence of the contractual tenancy, it must follow a fortiorari that it
could not have been intended by the Legislature that the landlord should have
the right to apply for fixation of fair rent whilst the contract of tenancy is
subsisting. Having regard to the basic character of the statute as a rent
control legislation and the scheme of its provisions and reading s. 4, sub-s.
(1) in its contextual setting and in the
light of the other provisions of the statute, the conclusion is inescapable
that the word 'landlord' in s. 4, sub-s. (1) is used in a limited sense and it
does not include contractual landlord.
The landlord is not given the right to apply
for fixation of fair rent during the subsistence of the contractual tenancy.
It is only when the contract of tenancy is
lawfully determined that he becomes entitled to, apply for fixation of fair
rent, for it is only then that he can recover fair rent higher than the agreed
rent from the statutory tenant, there being no contract of tenancy to bind him
down to the agreed rent.
We were referred to certain decisions of this
Court relating to the interpretation of the provisions of various Rent Control
Acts dealing with the eviction' of tenants. Some of these decisions have 647
already been noticed by us earlier while discussing the general object and
intendment of Rent Control Acts. They have no direct bearing on the
determination of the question before us, but they do lend some support to the
view we are taking as to the interpretation of the word 'landlord' in s.
4, sub-s. (1). These decisions which are
given in reference to Rent Control Acts of Maharashtra, Gujarat, West Bengal
and Madhya Pradesh, clearly establish that the Rent Control Acts do not give a
right to the landlord to evict a contractual tenant without first determining the
contractual tenancy. So long as the contractual tenancy subsists, the tenant
does not need protection because he cannot be-evicted in breach of the
'Contract of tenancy. It is only after the contract of tenancy is determined
and the landlord becomes entitled to the possession of the premises, that the
tenant requires protection and it is there that the Rent Control Acts step in
and prevent the landlord from enforcing his right to possession except under
certain conditions. The Rent Control Acts do not confer on the landlord a new
right of eviction, but merely restrict his existing right to recover possession
under the contract or the general law.
The landlord cannot, therefore, sue for
recovery of possession on any of the grounds recognised as valid by the Rent
Control Acts unless he has first determined the contractual tenancy of the
tenant. This view. which hasbeen taken by the decisions of this Court in regard
to the Rent Control Acts of Maharashtra, Gujarat,, West Bengal and Madhya
Pradesh, applies equally in regard to the Tamil Nadu Act 18 of 1960. It is true
that the High Court of Madras took a different view in R. Krishnamurti v.
Perthasarthi (1) in regard to the Madras Buildings (Lease and Rent Control)
Act' '1945 which was in material respects in almost identical terms as the,
Tamil Nadu Act 18 of 1960 and held that s. 7 of that Act, corresponding to s.
10 of the present Act, had its own scheme of procedure and there was no
question of any attempt .to reconcile that Act with the Transfer of Property
Act and an application for eviction could, therefore, be made under that Act
without terminating the contractual tenancy of the tenant. But in Manujendra
Dutt. v. Purendu Prosad Roy Choudhury & ors.(2) this decision of the Madras
High Court was expressly overruled and held not to be correct law by this
Court. The argument on behalf of the respondents was that the observation of
this Court disapproving the view taken by the Madras High Court was a casual
observation made without examining the scheme of the Madras Act and no validity
could attach to it.
We fail to see-how such an argument can
possibly be advanced with any degree of plausibility. It is clear from the discussion
of the Madras decision which we find in the judgment of Court that the
attention of this Court was specifically directed to the reasoning of the
Madras decision which proceeded on the basis that s. 7 of the Madras Act had
its own self-contained scheme which excluded the Transfer of Property Act and
it was because this Court found the reasoning to be incorrect, that it held
that the Madras decision was not good law. It would not be fair to presume that
this Court cavalierly overruled the Madras decision without applying its mind
and caring to examine the scheme of the Madras Act.
(1) A.I.R. 1949 Mad. 780.
(2) [1967] 1 S.C.R. 475 648 Such a charge
cannot be made merely because this Court did not elaborately discuss the merits
of the Madras decision but disposed it of in a few words. The brevity of the
discussion does not signify casualness or lack of proper consideration. We
must, in the circumstances, hold that the observation of this Court that the
Madras decision cannot be regarded as good law was a deliberate and considered
pronouncement and the view taken by this Court in regard to the Rent Control
Acts of Maharashtra, Gujarat, West Bengal and Madhya Pradesh must equally
prevail in regard to the Tamil Nadu Act 18 of 1960.
We may point out that in any event we do not
find any cogent reason to question the validity of the observation made by this
Court disapproving of the Madras decision. We are wholly in agreement with that
observation as we do not see any material difference between the language and
the scheme of s. 10 of the Tamil Nadu Act 18 of 1960 and the language and
scheme of the corresponding provisions of the other Rent Control Acts which
came to be construed by this Court. The only distinctive feature which could be
pointed out on behalf of the respondents was the provision in s. 10, sub-s'
(3), cl. (d). But that provision does not make any material difference because
all that it provides is that though, in a case where the tenancy is for a
specified period and it is determined by forfeiture before the expiration of
the term, the landlord would have been, but for cl. (d), entitled to recover
possession of the building under cls. (a), (b) or (c), he shall be precluded
from doing so until the expiration of the period for which the tenancy was
created.
If there is any other ground available to him
for claiming possession, for example, a ground specified in s. 10, subs. (2),
he can seek to recover possession on that ground and cl. (d) would not afford
the tenant any protection. But cl. (d) would stand in the way of the landlord,
if possession is sought on any of the grounds set out in cls, (a), (b) and (c).
The object of cl. (d) clearly is that even though the tenancy has come to an
end by forfeiture and the landlord has become entitled to the possession of the
building under the general law., the tenant shall be protected from eviction on
any of the grounds set out in cls. (a), (b) and (c) so long as the period for
which the tenancy was created in his favour has not a expired, This
construction receives considerable support from the tact that the Legislature
has used the words "before the expiry of such period" and not the
words "before the determination of the tenancy" to indicate the
length of time for which protection is given to the tenant under cl. (d). We do
not therefore think that it would be right to infer from cl. (d) that, save in
cases falling within that provision, the landlord would be entitled to apply
for possession under sub-s. (2) or sub-cl.
(3) of s. 10 without determining the tenancy
of the tenant.
There can be no doubt, having regard to the
judicial pronouncements of this Court, that the word 'landlord' in s. 10 of the
Tamil Nadu Act 18 of 1960 :is used in a limited sense to refer only to a
landlord who has terminated the tenancy of the tenant and does not include a
contractual landlord. if the' word 'landlord' in s. 10 is found subjected to a
limitation excluding a contractual landlord, it forms a strong argument for
subjecting the word 'landlord' in s.4.,sub-s.(1) also to the like limitation.
649 It may also be noted that, whatever be
the correct interpretation of the word 'landlord' in s. IO, it is clear from
the decisions of this Court in regard to the other Rent Control Acts. that it
is not at all unusual,, having regard to the object and purpose of Rent Control
legislation, to read the word 'landlord' in a limited. sense so as 'to exclude
contractual landlord and we are therefore not doing anything startling or
extraordinary but merely following the path eked out by the decisions of this
Court when we place a limited meaning on the word 'land lord' in s. 4, sub-s.
(1) which would exclude contractual landlord. That is in fact in conformity
with the object and purpose of the Tamil Nadu Act 18 of 1960, which, to quote
the words used by this Court in P.J. Irani v. State of Madras (1) in reference
to the earlier Tamil Nadu Act 25 of 1949 which was in material respects in
identical terms as the present Act, is intended to protect "the rights of
tenants in occupation of buildings from being charged unreasonable rates of
rent" and not to benefit landlords by conferring on them a new right
against tenants which they did not possess before.
Since we are of the view that it is not
competent to the landlord to apply for fixation of fair rent under s. 4, subs.
(1) during the subsistence of the contractual tenancy, we set aside the
decision of the High Court of Tamil Nadu which has taken the view that the
Controller has jurisdiction to entertain the application of the respondents and
allow Civil Appeal No. 50 of 1968. There will be no order as,. to costs all
throughout.
ORDER In accordance with the opinion of the
majority, the appeal is dismissed. The appellant will pay the respondents
costs.
S.B.W.
(1) [1962] 2 S.C.R. 169.
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