Sri Krishna Khanna Vs. Additional
District Magistrate, Kanpur & Ors [1975] INSC 49 (26 February 1975)
UNTWALIA, N.L.
UNTWALIA, N.L.
MATHEW, KUTTYIL KURIEN BHAGWATI, P.N.
CITATION: 1975 AIR 1525 1975 SCC (2) 361
ACT:
U.P. (Temporary) Control of Rent and Eviction
Act, 1947, Sections 3, 7 and 7A and Control at Rent and Eviction Rules, 1949,
Rules 3, 4, 5 and 6--Intimation of vacancy by landlord--Allotment order made
after expiry of the required period--Allotment order, if invalid.
Compromise Decree--Compromise void, being
unlawful and opposed to public policy--Respondent. if committed fraud in
ignoring void compromise while applying for eviction of appellant.
HEADNOTE:
The appellant who is the owner of the
building hearing No. 24/6, Tulsa Kothi, Kanpur, lives in the upper floor of the
building with his son and other members of the family.
There are two shops in the ground floor in
which tenants had been inducted. One of the shops has been in possession of
Raghunath Prasad Mehrotra, respondent no. 3 and his brother Kanahyalal Mehrotra
who have been carrying on the business of Druggists and Chemists in the said
shop as partners of the firm Pioneer Drug Stores. The other shop was in the
tenancy of Bata Shoe Company Ltd. Since the said Company had taken another shop
on rent sometime in the year 1961 it was about to vacate the shop in the
building of the appellant. He. therefore, filed an application on 7-11-1961
before the Rent Control and Eviction Officer (Rent Controller) with a copy to
the District Magistrate, Kanpur under Rule 6 of the Control of Rent and
Eviction Rules, 1949framed under Section 17 of the U.P. (Temporary) Control of
Rent and Eviction Act, 1947 praying for the release of the shop in his favour
on the ground that he required the accommodation for his own use for
establishing a business for his son. On 2-5-1962. respondent No. 3 made an
application under section 7(2) of the Act for allotment of the accommodation to
him. There were four more applicants under section 7(2). The shop was actually
vacated by Bata Shoe Company on 15-8-1962. On 16-8-1962 intimation was given by
the appellant to the Rent Controller about the vacancy of the shop in
accordance with section 7(1). The Additional District Magistrate, to whom
proceedings had been transferred, made an order on 17-9-1962 refusing to
release the shop to the appellant and directed its allotment to respondent No.
3. In pursuance of the order made in his favour, the respondent got actual
possession of the shop from the appellant who had occupied the shop in the
meantime.
Before the filing of the application by the
third respondent on 2-11-1962 under section 7A of the Act, the appellant had
filed on 22-9-1962, suit No. 132/1962 in the Court of First Civil Judge at
Kanpur challenging the allotment order of the Additional District Magistrate
and the Rent Controller impleading the third respondent as the sole defendant
in the suit. A decree for permanent injunction was asked for.
interim injunction was granted. The suit
ended in compromise on 11-10-1962. The appellant filed an application for
review on 17-11-1962 before the Rent Controller asking him to review his
ex-parte order dated 1511-1962 made under section 7A of the Act chiefly oil two
grounds viz. (1) that no notice was served upon the appellant; (2) that the
third respondent had obtained the order fradulently by suppressing the fact of
compromise entered in Suit No. 132/1962. The Rent Controller refused to review
his order and dismissed the application on 8-11963. The appellant on the same
date i.e. on 8-1-1963 filed a petition in the Allahabad High Court under
Article 226 of the Constitution to challenge the various orders of allotment
and delivery of possession made by respondents I and 2 from time to time. The
Writ Petition was dismissed by a learned single Judge on 7-5-19-63. Special
Appeal No.
254/1963 was dismissed by a Bench of the
Allahabad High Court on 3-2-1964. The present appeal was preferred in this
Court on grant of certificate by the High Court.
710 It was contended on behalf of the
appellant that (i) The order of allotment having not been made within 30 days
of the receipt of the intimation sent by the landlord under section 7(1) (a) of
the Act as required by Rule 3 of the Rules was ultra vires and void;
(ii) Respondent No. 3 had no right to apply
for possession under section 7A of the Act after having entered into a
compromise in Suit No. 132/1962;
(iii) that the order of allotment issued by
the Rent Controller was bad as it was mechanically issued on the basis of the order
of the Additional District Magistrate and without any application of the mind
by the former.
Dismissing the appeal,
HELD:(By Court) (i) Section 3 of the Act
providing for restrictions on eviction is based on public policy. It is
intended to protect the weaker section of the community in general by granting
equality of bargaining power. [714D; 718E] Murlidhar Agarwal and Anr. v State
of Uttar Pradesh and Ors.; A.I.R. 1974 S.C. 1924, relied on In Jiwan Singh v.
Rajindra Prasad & Anr., Civil Appeal No.
999(N) of 1971 decided on 18-12-1974, this
Court held that if the landlord failed to discharge his obligation of giving 7
days' notice in accordance with section 7(1) (a), he lost his right of making a
nomination under Rule 4. The District Magistrate has got to make the order, of
allotment within 30 days of the receipt of the intimation sent by the landlord
under section 7(1)(a) of the Act. Ho has, at the same time, to give notice of
his order of allotment to the landlord.
If the landlord receives no notice from the
District Magistrate within 30 days, which as a matter of construction under
Rule 4 must mean shortly after the expiry of 30 days of , the receipt by the
landlord under section 7(1)(a), of an order of allotment having been made
within that period, he gets a right to nominate a tenant. Ordinarily and
generally the District Magistrate shall have to allot the accommodation to the
nominee of the landlord but for special reasons to be recorded in writing, he
may depart from the nomination made by the landlord and allot the accommodation
to some other person' even to a person who was an applicant before him before
the expiry of the period of 30 days and due to one reason or the other no order
of allotment could be in his favour within the said period. If, however, the
landlord does not make a nomination in accordance with Rule 4 be cannot
challenge the order of allotment subsequently made by the District Magistrate
on the expiry of the period of 30 days only on the ground of its having been
made beyond the time. [715D-E, F-716B; 718E-719F] (ii) in the instant case it
is not correct to say that the order of allotment made on the 17th September.
1962-two days after the expiry of the period of 30 days was invalid on that
account alone. The High Court is also right in its view that no order of
allotment was possible to be made in this case before disposal of the
landlord's claim under Rule, 6. There is no time limit fixed for disposal of
such a laim. of course it should be disposed of as quickly as possible, preferably
within the period of 30 days mentioned in Rule 3. That being so even in the
light of Rule 6 it is difficult to nullify an order of allotment made by the
District Magistrate merely on the ground of having been made on the expiry of
the period of 30 days. On the facts of this case surely ,the Order of allotment
was not invalid.
[716D-E-, 719F-720B] (iii) The order of
allotment in this caw was made by the Additional District Magistrate,
respondent No. 1. It may not be quite correct to say that it was purely an
administrative order as has been the view of the High Court in the Special
Appeal. But the, order was made by him in 71l a quasijudicial manner after
hearing the parties concerned and after fully allying his mind. He being a
delegate of the District Magistrate, was competent to make order of allotment.
So was the Rent Controller. But the latter merely issued the formal order made
by the former. It was not a cm where *a authority competent to make the order
mechanically did it on the direction or in pursuance of an order of a different
authority not competent to Pass the order. [717G-718B; C-D] (ii) By majority
(Mathew and Untwalia, JJ.) The appellant filed Civil Suit No. 132/1962 against
the third respondent to challenge the order of allotment made in his favour by
respondent Nos. 1 and 2. Neither of the said two respondents was impleaded as a
defendant in the suit.
But that apart, the agreement entered into
between the appellant and respondent No. 3 embodied in the compromise petition
dated 11-10-1962 Was void under section 23 of the Contract Act as it was
unlawful and against the public policy of the Act under the Rules. So long as
the Act and the Rules continued in force, the control of letting vested in the
District Magistrate and not in the parties. By an agreement of the kind
embodied in the compromise petition the parties could not curtail the powers of
the District Magistrate. It was unlawful and against the public policy of the
law to do so. Respondent No. 3 committed no fraud in ignoring the void
compromise when he applied for eviction of the appellant under section 7A of
the Act and for delivery of actual, physical possession to him. [717C-F] Per
Bhagwati, J. (dissenting) Even it the compromise was unlawful and the consent
decree was on that account void, the very fact of the 3rd respondent having
submitted to the consent decree, declaring the order of allotment to be invalid
and recognising the right of the appellant to occupy the shop for himself vis-avis
the 3rd respondent, was a highly relevant circumstance bearing on the exercise
of the discretion of the District Magistrate, and it ought to have been
disclosed to the District Magistrate. It is a well settled proposition of law
and this proposition ,Should apply equally in the field of administrative law,
that when a party approaches a tribunal for discretionary relief, he must not
only come with clean hands but must also show the utmost good faith and
disclose all material facts having a bearing on the exercise of discretion of
the authority which are within his knowledge. He cannot escape this obligation
on the plea that So other side can always, if it so chooses, appear and bring
the material facts to the notice of the authority. It is an obligation of
confidence which he owes to the authority and this obligation is imposed by law
in the larger interests of administration of justice so that justice, whether
dispensed by Civil court or by administrative authority, remains pure and
unsullied. The nondisclosure of the fact of consent decree by the 3rd
respondent in the application made by him vitiated the order of the Rent
Control and Eviction Officer under section 7A.
[722C-723B; 724A-E]
CIVIL APPELLATE JURISDICTION.: Civil Appeal
No. 38 of 1968.
From the Judgment and Decree dated the 3rd
February, 1964 of the Allahabad High Court in Spl. Civil Appeal No. 254 of
1963.
S. T. Desai, S. S. Bhatia, J. P. Goyal and S.
M. Jain, for the appellant.
Bishan Narain, B. P. Maheshwari and Suresh
Sethi, for respondent No. 3.
The Judgment of the Court was delivered by
Untwalia, J. P.
N. Bhagwati, J. gave a dissenting Opinion.
712 UNTWALIA, J.-There is a building bearing
no. 24/6, Tulsa Kothi, situated at Mall in the City of Kanpur. The appellant in
this appeal filed by certificate of the Allahabad High Court is the owner of
the said building. He lives in the upper floor of the building with his son and
other members of the family. There are two shops in the ground floor in which
tenants had been inducted. One of the shops has been coming in possession of
Raghunath Prasad Mehrotra, respondent no. 3 and his brother Kanahyalal Mehrotra
who have been carrying on the business of Druggists and Chemists in the said
shop as partners of the firm Pioneer Drug Stores. The other shop was in the
tenancy of Bata Shoo Company Ltd. Since the said Company had taken another shop
on rent sometime in the year 1961 it was about to vacate the shop in the
building of the appellant. He, therefore, filed an application on 7-11-1961
before the Rent Control and Eviction Officer (for brevity, Rent Controller)
with a copy to the District Magistrate, Kanpur under Rule 6 of the Control of
Rent and Eviction Rules, 1949 framed under section 17 of the U.P. (Temporary)
Control of Rent and Eviction Act, 1947-hereinafter called respectively the
Rules and the Act praying for the release of the shop in his favour on the
ground that he required the accommodation for his own use for establishing a
business for his son. On 2-5-1962, respondent no. 3 made an application under
section 7(2) of the Act for allotment, of the accommodation to him.
There were four more applicants under section
7(2). The shop was actually vacated by Bata Shoe Company on 15-8-1962.
On 16-8-1962 intimation was given by the
appellant to the Rent Controller about the vacancy of the shop in accordance
with section 7(1). It may be stated here that the Additional District
Magistrate, respondent no. I as also the Rent Controller, respondent no. 2 had
been authorised by the District Magistrate of Kanpur to exercise powers under
the Act. On 18-8-1962 the Rent Controller heard the matters and fixed 27-8-1962
for orders. Due to some reason he felt difficulty in deciding the matter of the
release of shop in favour of the appellant or its allotment to any of the five
applicants including respondent no. 3. In due course, the District Magistrate
transferred the proceedings to the Additional District Magistrate, respondent
no. 1. After hearing all the parties concerned he made an order on 17-91962
refusing to release the shop to the appellant and directed its allotment to
respondent no. 3 Thereupon a formal order of allotment alloting the shop
accommodation to respondent no. 3 was issued by the Refit Controller,
respondent no. 2 on 18-9-1962.
It appears that the appellant had in the
meantime occupied the shop when it was vacated by Bata Shoo Company.
Respondent no. 3. therefore filed an
application under section 7A of the Act on 2-111962, which was allowed by the
Rent Controller on 15-11-1962. The order was ex-parte in absence of the
appellant as he is said to have not responded to the notice issued and alleged
to have been served on him under section 7A(1) of the Act. The shop was got
vacated and actual possession delivered to respondent no. 3 with the help of
the police force on 16-11-1962 in accordance with section 7A(3) of the Act.
713 Before the filing of the application by
the third respondent on 2-11-1962 under section 7A of the Act, the appellant
had filed on 22-9-1962 Suit No. 132/1962 in the Court of First Civil Judge at
Kanpur challenging the allotment order of the Additional District Magistrate
and the Rent Controller implementing the third respondent as the sole defendant
in the suit. A decree for permanent injunction was asked for.
Interim injunction was granted. The suit
ended in compromise on 11-101962. The terms of the compromise will have to be
considered at the appropriate place in this judgment. It may also be noted here
that Kanahyalal Mehrotra, brother of the third respondent, filed another suit
to challenge the compromise decree dated 11-10-1962 claiming that the order of
allotment had been made in favour of the partnership firm and the third
respondent had no right to nullify the said order by the compromise. The suit
was decreed and we were informed at the Bar that an appeal from the decision of
the Trial Court is pending.
The appellant filed an application for review
on 17-11-1962 before the Rent Controller asking him to review his ex-parte
order dated 15-11-1962 made under section 7A of the Act chiefly on two grounds
viz. (1) that no notice was served upon the appellant; (2) that the third
respondent had obtained the order fraudulently by suppressing the fact of
compromise entered in Suit No.132/1962. The Rent Controller refused to review
his order and dismissed the application on 8-1-1963. The appellant on the same
date i.e. on 8-1-1963 filed a petition in the Allahabad High Court under
Article 226 of the Constitution to challenge the various orders of allotment
and delivery of possession made by respondents I and 2 from time to time. The
Writ Petition was' dismissed by a learned single Judge on 7-5-1963. Special.
Appeal No.254/1963 was dismissed by a Bench of the Allahabad High Court on
3-2-1964. The present appeal was preferred in this Court on grant of certificate
by the High Court.
The appellant had urged five points before
the High Court in the special appeal. Mr. S. T. Desai appearing for him in this
Court pressed only 3 points for our consideration in support of this appeal.
They are : (1) The order of allotment having not been made within 30 days of
the receipt of the intimation sent by the landlord under section 7(1) (a) of
the Act as required by Rule 3 of the Rules was ultra vires and void; (2)
Respondent no.3 had no right to apply for possession under section 7A of the
Act after having entered into a compromise in suit No. 132/1962; (3) that the
order of allotment issued by the Rent Controller was bad as it was.
mechanically issued on the basis of the order of theAdditional District
Magistrate and without any application of the mind by the former.
Mr. Bishan Narain, learned counsel for
respondent no. 3 submitted that the period of 30 days mentioned in Rule 3 was
directory, or, in any view of the matter in the facts and circumstances of this
case the order of allotment was not bad on that account. He further submitted
that the allotment order was in favour of the partnership firm, respondent no.
3 had applied for the allotment as a partner of the firm and the compromise
entered into between the appellant 714 and the said respondent was not binding
on the firm.
Moreover, it was illegal, null and void. fie
further argued that there was no substance in the third point urged on behalf
of the appellant in as much as the order was really that of the Additional
District Magistrate who had made it after fully hearing the parties concerned.
The High Court in appeal has expressed the
view that the requirement of passing the order of allotment within the period
of 30 days is directory or in any view of the matter on the facts of this case
it could not be made before disposing of the appellant's application for
release of the accommodation under Rule 6. In the opinion of the High Court the
compromise was a fraud on the officers empowered to act under the Statute and
was of no avail to the appellant. The order of allotment was in fact made by
the Additional District Magistrate and the formality of issuing the order could
be done either by him or by the Rent Controller, as it was an administrative
order.
The object of the Act as its Preamble
indicates is to provide for continuance of powers to control the letting and
the rent of residential and non-residential accommodation and to prevent the
eviction of tenants therefrom. Section 3 providing for restrictions on eviction
as held by one of us (Mathew, J.) delivering the judgment on behalf of this
Court in the case of Murlidhar Aggarwal Another v. State of Uttar Pradesh and
others(1) is based on Public Policy. it is intended. to protect the weaker
section of the community in general by granting equality of bargaining power.
The protection is based on public policy. Similarly, the Scheme of the Act as
per the provisions contained in Section 7 and 7A and Rules 3 to 6 is to curtail
the right and freedom of the landlord to a large extent in the matter of
letting out of accommodation. Section 7 provides for control on letting;
sub-section (1) of which casts a duty on the landlord to give notice in writing
of the vacancy of the accommodation to the District Magistrate. Under
subsection (2) the District Magistrate may by general or special order require
a landlord to let or not to let to any person any accomodation which has fallen
vacant or is about to fall vacant. The provision of sub-section (2) has to be
read in conjunction with the relevant rules. Section 7A empowers the District
Magistrate to take action against the unauthorised occupants by directing their
eviction and in case of necessity even with force. Proviso to sub-section (1)
of Section 7A enjoins upon the District Magistrate not to pass any order of
eviction if be is satisfied that there has been undue delay or it is otherwise
inexpedient to do so. In order to appreciate the true purport of the law
contained in Section 7 of the Act it is necessary to read Rules 3 to 6 of the
Rules in full :
3. "Allotment Order-The District
Magistrate shall make an allotment order within thirty days of the receipt of
the intimation sent by the landlord under section 7 (1) (a) of the Act and
shall give notice thereof to the landlord.
4. Landlord's Right to Let-If the landlord,
receives no notice from the District Magistrate within thirty days of the (1)
A.I.R. 1974 S.C. 1924.
715 receipt by District Magistrate of the
intimation given by landlord under section 7(1)(a), the landlord may nominate a
tenant and the District Magistrate shall allot the accommodation to his nominee
unless, for reasons to be recorded in writing, he forthwith allots the
accommodation to other person.
5. Liability for Rent from the date of
allotment-The allottee shall, unless he intimates in writing to the District
Magistrate his refusal to accept the accommodation within seven days of the
receipt of the order, be liable for rent from the date of allotment.
6. Occupation by landlord-When the District
Magistrate is satisfied that an accommodation, which has fallen vacant or is
likely to fall vacan is bona fide needed by the landlord for his own personal
occupation, the District Magistrate may permit the landlord to occupy it
himself." Recently in the case of Jiwan Singh v. Rajindra Prasad &
Anr.(1), judgment of which was delivered by Mathew, J. on behalf of this very
Bench on 18-12-1974, it was pointed out that if the landlord failed to
discharge his obligation of giving 7 days' notice in accordance with section
7(1)(a), he lost his right of making a nomination under Rule 4. It is to be
noticed that on the failure of the District Magistrate to make an allotment
order within the period provided in Rule 3 the landlord gets a right to
nominate a tenant. The District Magistrate under Rule 4 has got to allot the
accommodation to the nominee of the landlord unless for the reasons to be
recorded he allots it to somebody else.
Under certain circumstances therefore the
District Magistrate is empowered to make an order of allotment even after the
expiry of the period of 30 days by ignoring the nomination made by the
landlord. In such a situation and in the context of the Rules it is difficult
to hold that the period fixed for the making of an allotment order in Rule 3 is
mandatory in the sense of resulting in the nullification of the order of the
District Magistrate if made after the expiry of the period. Without resorting
to the well-known expressions of the requirement of the law being mandatory or
directory we would rest our view oil the plain reading of the language of the
Rules. The District Magistrate. as we have said above, has got to make the
order of allotment within 30 days of the receipt of the intimation sent by the
landlord under section 7(1)(a) of the Act. He has, at the same time, to give
notice of his order of allotment to the, landlord. If the landlord receives no
notice from the District Magistrate within 30 days, which as a matter of
construction under Rule 4 must mean shortly after the expiry of 30 days of the
receipt by the District Magistrate of the intimation given by the landlord
under section 7(1)(a), of an order of allotment having been made within that
period, he gets a right to nominate a tenant. Ordinarily and generally the
District Magistrate shall have to allot the accommodation to the nominee of the
landlord but for special reasons to be recorded in writing, he may depart from
the nomination made by the landlord and allot the accommodation to some (1)
Civil Appeal No. 999 (N) of 1971.
716 other person, even to a person who was an
applicant before him before the expiry of the period of 30 days and due to one
reason 'Or the other no order of allotment could be made in his favour within
the said period. if, however, the landlord does not make a nomination in
accordance with Rule 4 he cannot challenge the order of allotment subsequently
made by the District Magistrate on the expiry of the period of 30 days only on
the ground of its having been made beyond the time.
It is no doubt true that the liability for
rent of the allottee begins only from the date of allotment under Rule 5 and
the landlord suffers if there is delay in the making of the allotment by the
District Magistrate. The landlord may move the legal machinery for forcing the
District Magistrate to make the allotment. It may well be that in some case the
order of allotment made after undue delay will be found to be bad. In the
instant case it is not correct to say that the order of allotment made on the
17th September, 1962-two days after the expiry of the period of 30 days was
invalid on that account alone. The High Court is also right in its view that no
order of allotment was possible to be made in this case before disposal of the
landlord's claim under Rule 6. There is no time limit fixed for disposal such a
claim.
Of course it should be disposed of as quickly
as possible, preferably within the period of 30 days mentioned in Rule 3.
That being so even in the light of Rule 6 it
is difficult to nullify an order of allotment made by the District Magistrate
merely on the ground of having been made on the expiry of the period of 30
days. On the facts of this case surely the order of allotment was not invalid.
The appellant filed Civil Suit No. 132/1962
against the third respondent to challenge the order of allotment made in his
favour by respondent nos. 1 and 2. Neither of the said two respondents was
impleaded as a defendant in the suit.
But that apart, the agreement entered into
between the appellant and respondent no. 3 embodied in the compromise petition
dated 11-10-1962 was void under section 23 of the Contract Act as it was
unlawful and against the Public Policy of the Act under the Rules. The four
terms of the compromise are, as under :
(a) "That it is admitted by the
defendant that at the expiry of 30 days from the date of intimation, the shop
in dispute automatically stood released to the plaintiff and the allotment
order dated 18th September, 1962 was not at all effective vis-a-vis the rights
of the plaintiff as a landlord to use the said premises.
(b) That the defandant has no objection if
the plaintiff continues to utilize the accommodations for his own business or a
business of his son whether himself or in partnership with any person and till
such time as the plaintiff and his son utilize the accommodation in this
manner, the defendant will not be entitled to enforce, his allotment order
against him.
717 (c) That the plaintiff has agreed that if
at any time he wants to discontinue, the business established by him in the
said shop and wants to let out the shop to any person, he will do so in favour
of the defendant and unless he refuses to take the lease on reasonable terms,
the plaintiff will not let out the shop to any third party.
(d) That the shop is already in possession of
the plaintiff and the defendant will not be entitled to take any steps till the
landlord himself desires to let out the shop to the defendant." By clause
(a) the parties agreed to the statement of the law which in our judgment was
not sound and correct. It will be hazardous t0 permit a landlord and a tenant
to agree to such a position of law. It was not open to respondent no. 3 to
permit the appellant to utilize the accommodation for his own business or
business of his son as was done under clause (b). Nor was it open to the
appellant to agree to let out the shop, if in future he let it out to anybody,
after giving first preference to the third respondent as was agreed to be done
under clause (c). So long the Act and the Rules continued in force the control
of letting vested in the District Magistrate and not in the parties. By an
agreement of the kind emobodied in the compromise petition the parties could
not curtail the powers of the District Magistrate. It was unlawful and against
the public policy of the law to do so. The Public Policy behind the Act and the
Rules is to vest the control of letting in the District Magistrate for the
benefit of the general public or to be more precise such members thereof who
were in. need of accommodation on rent. In our opinion, therefore, respondent
no. 3 committed no fraud in ignoring the void compromise when he applied for
eviction of the appellant under section 7A of the Act and for delivery of
actual, physical possession to him. We do not accept the alternative argument
put forward by Mr. Bishen Narain as correct in respect of the compromise. it
was not bad for the reason of having been entered into by respondent no. 3
alone. After perusing the application for allotment made by respondent no. 3,
the order of allotment made by respondent no. 1 and tile order made by
respondent no. 2 under section 74(3) of the Act, we have come to the conclusion
that the allottee of the accommodation in question was respondent no.
3 although he may have taken it for the
purpose of extending his business of Chemists and Druggists run in partnership
with his brother.
The third submission made on behalf of the
appellant has no force and must also be rejected. The order of allotment in
this case was made by the Additional District Magistrate, respondent no. 1. It
may not be quite correct to say that it was purely an administrative order as
hag been the view of the High Court in the Special Appeal. But the order was
made by him in a quasi-judicial manner after hearing the parties concerned and
after fully applying his mind. He, being a delegate of the District Magistrate,
was competent to make the order of allotment. So was the Rent Controller.
But the latter 718 merely issued the formal
order made by the former. It was not a case where the authority competent to
make the order mechanically did it on the direction or in pursuance of an order
of a different authority not competent to pass the order. In our judgment,
therefore, the order of allotment allotting the accommodation to respondent no.
3 was not bad.
Nor had the order made by the Rent Controller
under section 7A of the Act any infirmity.
in the result the appeal fails and is
dismissed. No orders as to cost.
BHAGWATI, J. I have had the, advantage of
reading the judgment of brother Untwalia, J. He has discussed the three
contentions urged by Mr. S. T. Desai on behalf of the appellant and rejected
them. Whilst agreeing with the view taken by him, in regard to the first and
the third contentions, I find myself unable to subscribe to the view taken by
him in regard to the second contention. I shall immediately proceed to give my
reasons why I take a different view as regards the second contention, but
before I do so, I would like to add a few words in reference to the first
contention.
The Act with which we are concerned in this
appeal is the United Provinces (Temporary) Control of Rent and Eviction Act,
1947. The object of this Act, as may be gathered from its preamble, is to
provide for continuance of powers to control the letting and the rent of
residential and nonresidential accommodation and to prevent the eviction of
tenants from such accommodation. Section 7, which is the material section,
enacts various provisions relating to control on letting. It consists of four
sub-sections, but of them only two are material. Sub-s. 1(a) requires the
landlord to give notice of vacancy to the District Magistrate within seven days
after the accommodation becomes vacant by his ceasing to, occupy it or by the
tenant vacating it or otherwise ceasing to occupy it or by termination of
tenancy or by release from requisition or in any other manner whatsoever. A
similar obligation is laid on the tenant vacating the accommodation under
sub-s. 1(b).
Sub-s. (2) then proceeds to say that the
District Magistrate may, by general or special order require a landlord to let
or not to let to any person any accommodation which is or has fallen vacant or
is about to fall vacant. It may be noted that the power conferred on the
District Magistrate under sub-section (2) is absolute in terms. The vacant
accommodation is placed completely under the control of the District Magistrate
and he may require the landlord to let the accommodation to any person
nominated by him or he may even make a negative order that the landlord shall
not let the accommodation to a particular person. Moreover, this power may be
exercised by the District Magistrate at any time. There is no provision in the
statute requiring the District Magistrate to exercise this power within a
particular time limit. The question is whether there is anything in the Rules
which imposes any such limitation on the District Magistrate ? Rule 3 provides
that the District 719 Magistrate shall make an allotment order within thirty
days of the receipt of the intimation sent by the landlord under s. 7(1)(a) and
.shall give notice thereof to the landlord.
This Rule obviously contemplates that the
District Magistrate must make an order requiring the landlord to let the
accommodation to a specified person within thirty days of the receipt of the
intimation of vacancy from the landlord. But does it also carry with it by
necessary implication a negative prohibition that if the District Magistrate
does not make such an order within the stipulated time, he shall be precluded
from making such order thereafter. We do not think so. The only consequence ,of
the District Magistrate not making an order of allotment within the period of
thirty days is that set out in Rule 4.
It confers. a right on the landlord to
nominate a tenant and where the landlord makes such a nomination, the District
Magistrate is bound to allot the accommodation to such nominee "unless for
reasons to be recorded in writing he forthwith allots the accommodation to
other persons". It is significant to note that Rule 4 does not provide
that if the District Magistrate, fails. to make an order of allotment within
the period of thirty days, the landlord may occupy the accommodation himself
The only right which enures to the landlord in such a case is to nominate a tenant.
This he may do or may not do depending on his volition. But he does not get a
right to occupy the accommodation for himself.
Moreover, even where the landlord nominates a
tenant, the District Magistrate may, for reasons to be recorded in writing,
disregard such nomination and allot the accommodation to another person
notwithstanding the expiration of the period of thirty days. It would,
therefore, be seen that the time limit of thirty days is not intended to
operate as a fetter on the right of the District Magistrate to make an order of
allotment in the sense that he cannot thereafter make such an order. The only
reason why the period of thirty days is provided is that thereafter the
landlord gets a right to nominate a tenant, though even this right can be
displaced by the District Magistrate in a proper case. But if for some reason,
the landlord does not exercise this right and nominate a tenant, the power of
the District Magistrate to make an order of allotment conferred under s.
7(1)(a) is not affected. There is nothing in the Rules which says that the
landlord shall be entitled to occupy the accommodation himself or that the
District Magistrate shall be precluded from making an order ,of allotment after
the expiration of the period of thirty days.
Rule 4 in fact indicates to the contrary. And
so also does Rule 6. That rule provides that if the landlord wants the
accommodation bona fide for his own personal occupation, he must obtain
permission of the District Magistrate to, occupy it himself. This provision
also suggests that the landlord does not become entitled to occupy the
accommodation himself on the expiration of the period of thirty days, but he
can do so only if the necessary permission is granted by the District
Magistrate. If is, therefore, clear, on a conspectus of the provisions
contained in s. 7, sub-ss. (1) and (2) Rules 3, 4 and 6, that even if an order
of allotment is not made by the District Magistrate within the period of thirty
days, the landlord does not become entitled to occupy the accommodation himself
in defeasance of the power of the District Magistrate to make an order of
allotment and the Dist720 rict Magistrate can, notwithstanding the expiration
of the period of thirty days, make an order of allotment under s.
7(1)(a). The validity of the order of
allotment made by the District Magistrate in favour of the third respondent
could not, therefore, be assailed on the ground that it was made after the
expiration of thirty days from the receipt of intimation of vacancy from the appellant.
I would now turn to examine the, third
contention on which I find myself in disagreement with my learned brother
Untwalia, J. The facts which bear on this contention are fully set out in the
judgment of my learned brother Untwalia, J. and I need not reiterate them. It
would be enough for my purpose to, state that Civil Suit No. 132 of 1962 was
filed by the appellant against the 3rd respondent in the Court of the First
Civil Judge, Kanpur challenging the validity of the order of allotment made by
the District Magistrate in favour of the 3rd respondent. Immediately on filing
the suit, the appellant obtained an injunction restraining the 3rd respondent
from taking any steps to enforce the order of allotment or to interfere with
the possession of the appellant in respect of the shop. The result was that the
3rd respondent was prevented from obtaining possession of the shop from the
appellant and he could not even move the District Magistrate for evicting the
appellant and handing over possession of the shop to him.
The 3rd respondent, therefore, within a few
days after the suit was-filed and the injunction was obtained, entered into a
compromise with the appellant for settlement of the suit and the terms of this
compromise were as follows :
(a) That it is admitted by the defendant that
at the expiry of 30 days from the date of intimation, the shop in dispute
automatically stood released to the plaintiff and the allotment order dated
18th September, 1962 was not at all effective vis-a-vis the rights of the
plaintiff as a landlord to use the said premises.
(b) That the defendant has no objection if
the plaintiff continues to utilize the accommodations for his own business or a
business of his son whether himself or in partnership with any person and till such
time as the plaintiff and his son utilize the accommodation in this manner, the
defendant will not be entitled to enforce his allotment order against him.
(c) That the plaintiff has agreed that if at
any time he wants to discontinue the business established by him in the said
shop and wants to let out the shop to any person, he will do so in favour of
the defendant and unless he refuses to take the lease on reasonable terms, the,
plaintiff will not let out the shop to any third party.
(d) That the shop is already in possession of
the plaintiff and the defendant will not be entitled to take any steps till the
landlord himself desires to let out the shop to the defendant" 721 The
learned Civil Judge, presumably on the view that the compromise between the
parties was lawful, passed a decree in terms of the compromise on 11th October,
1962 under' Order-XXIII' rule 3 of the Code of Civil Procedure.
One consequence of this consent decree was
that the injunction against the 3rd respondent came to an end. The 3rd
respondent, thus freed from the inhibitory mandate of the injunction,
immediately proceeded to make an application to the Rent Control and Eviction
Officer on 2nd November, 1962 under s. 7A fur an order directing the appellant
to vacate the shop on the ground that he was in occupation of, it in
contravention of the order of allotment made in favour of the 3rd respondent.
The application was in effect and substance one for enforcement of the order of
allotment under s. 7A. Now, under the consent decree the order of allotment was
declared void and ineffective and the right of the appellant to use the shop
for his personal occupation was recognized vis-a-vis the 3rd respondent, but
the 3rd respondent did not disclose this fact in the application, nor did he
make any reference in it to the consent decree.
There was a dispute between the parties in
regard to the service of the notice of the application on the appellant, but it
was found by the Rent Control and Eviction Officer, as also by the High Court
in the writ petition, out of ,which the present appeal has arisen, that the
appellant refused to accept the notice of the application and hence we must
proceed on the, basis that the notice of the application was duly served on the
appellant. The appellant did not appear at the hearing of the application and
proceeding ex parte, the Rent Control and Eviction Officer passed an order
dated 15th November, 1962 directing that the appellant be evicted from the shop
and the 3rd respondent be put in possession of the same. Though this order was
not contemplated to be executed before 18th November, 1962, the appellant was.
forcibly evicted from, the shop in pursuance of the order on 16th November,
1962 and possession of the shop was immediately on the same day handed over to
the 3rd respondent. The appellant applied for a review of the order to the Rent
Control and Eviction Officer but the application for review was rejected on 8th
January, 1963. This led to the filing of the writ petition out of which the
present appeal has arisen before us.
The principal question which arises for
consideration on these facts is as to whether the order passed by the Rent
Control and Eviction Officer under s. 7A was vitiated by reason of
non-disclosure of the fact of consent decree by the 3rd respondent in the
application made by him. It would be convenient at this stage to refer to the
relevant provisions of s. 7A under which the application was made by the 3rd
respondent. Section 7A was introduced in the Act at a later point of time in order
to arm the District Magistrate, with the power to enforce the order of
allotment made by him. Sub-s. (1) of that section provided inter alia that
"where an order requiring any accommodation to be let or not to be let has
been duly passed under sub-section (2) of section 7 and the District Magistrate
believes or has reason to believe, that any person has, in contravention of the
said order, occupied the said accommodation or any part thereof, he may call
upon the person in occupation to show cause, within 722 a time to be fixed by
him, why he should not be evicted there from." There is a proviso to this
subsection which is very material and it says that "no order under this
section shall be passed if the District Magistrate is satisfied that there has
been undue delay or it is otherwise inexpedient to do so." Therefore, it
is not in every case where a person is in occupation of accommodation in
contravention of an order of allotment that the District Magistrate is required
to make an order evicting such person and putting the allottee in possession of
the accommodation. The District Magistrate has a discretion ill the matter and
if he finds that there has been undue delay on the part of the allottee or that
on the facts and circumstances it is inexpedient to make such an order, he may
decline to do so. It must, therefore, follow a fortiorari that all the facts
and circumstances bearing on the exercise of his discretion should be before
the District Magistrate in order to enable him to exercise his discretion in a
just and proper manner. Now, in the present case, there can be no doubt that
the fact of consent decree having been obtained by the parties in the suit was
a very material fact which could have considerable bearing on the question
whether it was inexpedient to make an order under s. 7A. The 3rd respondent
having himself agreed with the appellant and obtained consent decree in the
suit, that the order of allotment in his favour was void and ineffective and
the appellant could occupy the shop for himself, there can be no doubt that
this piece of conduct, unless satisfactorily explained, was bound to have its
impact on the exercise of discretion by the District Magistrate. The District
Magistrate would certainly ask himself : "why should I exercise my discretion
in favour of a person who has himself conceded in the consent decree obtained
from the Civil Court that the order of allotment in his favour is invalid and
he has no objection to landlord occupying the accommodation ?" Such
conduct on the part of the 3rd respondent could be inspired only by one of two
reasons. It may be that the 3rd respondent submitted to the consent decree
because the wanted to get rid of the injunction issued against him by the Civil
Court. So long as the injunction stood, he could not obtain possession even by
moving the District Magistrate under s. 7A. He, therefore, resorted to this
device for the purpose of getting the injunction out of his way, so that
thereafter he could make an application to the District Magistrate under s. 7A
suppressing the fact of the consent decree and take a chance of obtaining an
order of eviction under that section.
Or, it is possible that at some point of time
subsequent to the passing of the consent decree, the 3rd respondent was advised
that the consent decree was void and inoperative and it did not preclude him
from making an application to the District Magistrate and obtaining an order of
eviction under s. 7A. In either case, he ought to have disclosed the fact of
the consent decree in the application made by him under s. 7A. If he thought
that the consent decree was valid, then obviously non-disclosure of it by him
in the application made to the District Magistrate was fraudulent, for it is
difficult to see how he could have possibly persuaded himself to believe that,
notwithstanding the consent decree, he could make such an application. The
inference in that case would be irresistible that he submitted to the consent
decree for 723 the purpose of getting rid of the injunction, so that he could thereafter
obtain an order of eviction from the District Magistrate by keeping back the
fact of the consent decree from him. But even if I take a charitable view of
the conduct of the 3rd respondent and assume that after the passing of the
consent decree, he was advised that the, consent decree was null and void, I
cannot exonerate him from blameworthiness in not disclosing the fact of the
consent decree in the application made by him to the District Magistrate.
I do not think that it is open to a party against
whom a decree has been passed by a court of law, whether by consent or in
invitum, to arrogate to himself the right of adjudging that the decree, is a
nullity and to disregard or to disobey it on that hypothesis. It is true that a
consent decree is based on an agreement between the parties and, as pointed out
in Wentworth v. Bullen,(1) "the contract of the parties, is not the less a
contract,, and subject to the incidents of a contract, because there is
superadded the command of the Judge." it would, therefore, seem to be
in-controvertible that a consent decree can be avoided or declared void on the
same grounds as, a contract. if 'the compromise on which the consent decree is
based is induced by fraud, mistake, undue influence or any other ground which
would avoid a contract, the consent decree would be liable to be set aside but
that would have to be done by the aggrieved party by filing a suit. So long as
the consent decree is not set aside in such suit, it would be binding on the
parties as such as a decree in invitum and it would not be open to either party
to disregard or disobey it. Similarly, if the compromise is unlawful, Order
XXIII, rule 3 prohibits the court from passing a decree in accordance with it
and even if such decree is passed because neither party raises an objection, it
would be void. But the question is : can a party to a litigation be permitted
to decide for himself that the consent decree is void and on that view ignore
it altogether as if it did not exist? I do not think so. Whether the compromise
is unlawful so as to render the consent decree void must be left to the
determination of the appropriate authority before whom the question may arise
and it cannot be allowed to be determined by a party himself according to his
personal judgment. Such a question may raise difficult and complex issues. It
is not always easy to determine whether an' agreement is unlawful as being
opposed to public policy or contrary to law. The decision of such issues
requires a certain amount of legal training and skill and objectivity of
approach and these are matters "hardly fit for final determination by the
self-interest of a party".
They must be left to the judgment of the
appropriate authority "and not the personal judgment of one of the
parties". That is both a postulate and a requirement of the democratic
form of government. It was pointed out by Frankfurter, J., in United States v.
United Mine Workers of America(2) :"No one, no matter how exalted his
public office or how righteous his private motive, can be judge in his own
case." Otherwise society will be ruled not by law but by brute Dower.
"If one man can be allowed to determine for himself what is law, every man
can. That means first chaos, (1) (1829) 9 B & C 1840 N.
(2) 330 U.S. 258; 91 Law. Ed. 884.
724 then tyranny." Legal process is an
essential part of the democratic process. Therefore, to my mind, there can be
no doubt that if the, 3rd respondent was of the view that the compromise was
unlawful ,and the consent decree was on that account void, he should have taken
appropriate proceedings in the civil court and got the consent ,decree declared
void before making an application to the District Magistrate under s. 7A, or at
the least, disclosed the fact of the consent decree to the District Magistrate
in his application under S. 7A and pointed out to the District Magistrate that
the consent decree was void on the ground that the compromise was against
public policy or contrary to the Act and did not, therefore, preclude the third
respondent from making an application for enforcement of the order of allotment
nor did it stand in the way of the District Magistrate in making an order of
eviction in favour of the 3rd respondent. The District Magistrate could not be
asked to enforce the order of allotment in favour of the 3rd respondent unless
the consent decree, holding the order of allotment to be invalid, was first
found to be void, because, if it was valid, it would be binding on the 3rd
respondent and he could not, in that event, seek the order of eviction in his
favour. This was, therefore, a material fact which ought to have been disclosed
by the 3rd respondent in the application made by him under s. 7A. But on 'this
ground alone I would not be inclined to quash and set aside the order made by the
Rent Control and Eviction Officer as delegate of the District Magistrate under
S. 7A because, as pointed out by my learned brother Untwalia, J., in his
judgment, and there I agree with him, that the consent decree was void by
reason of the compromise being against the public policy of the law and hence
there would be no point in interfering with the order of the Rent Control and
Eviction Officer on this ground.
There is, however, one other aspect of this
question which requires consideration. It cannot be seriously disputed, and I
have already referred to the aspect a little earlier, that the District
Magistrate had a discretion under s. 7A not to enforce an order of allotment,
if he thought that, on the facts and circumstances of the case, it was inexpedient
to do so. Even if the compromise was unlawful and the consent decree was on
that account void, the very fact of the 3rd respondent having submitted to the
consent decree, declaring the order of allotment to be, invalid and recognising
the right of the appellant to occupy the shop for himself vis-a-vis the 3rd
respondent, was a highly relevant circumstance bearing on the exercise of the
discretion of the District Magistrate, and it ought to have been disclosed to
the District Magistrate. It is a well settled proposition of law and this
proposition should apply equally in the field of administrative law, that when
a party approaches a tribunal for discretionary relief, he must not only come
with clean hands but must also show the utmost good faith disclose all material
facts having a hearing on the exercise of discretion of the authority which are
within his knowledge. He cannot escape this obligation on the plea that the
other side can always, if it so chooses, appear and bring the material facts to
the notice of the 725 authority. It is an Obligation of confidence which, he
owes to the authority and this Obligation is imposed by law in the larger
interests of administration of Justice so that justice, whether dispensed by
civil court or by administrative authority remains pure and unsullied. I am,
therefore, of the opinion that the non-disclosure of the fact of consent decree
by the 3rd respondent in the application made by him vitiated the order of the
Rent Control and Eviction Officer under s. 7A I would, therefore, allow the
appeal and quash and set aside the order made by the Rent Control and Eviction
Officer as delegate of the District Magistrate under S. 7A and direct the 3rd
respondent to hand over possession of the shop to the appellant. It would be
open to the District Magistrate to take such action under S. 7, sub-S. (2) as
he thinks fit including making of an order of allotment in favour of any person
he thinks proper, The District Magistrate may even, if he so thinks fit, make a
fresh order of allotment in favour of the 3rd respondent. Each party will bear
and pay his own costs of this litigation.
ORDER In view of the majority judgment the
Appeal is dismissed with no, order as to costs.
V. M. K.
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