V.S. Rahi & ANR Vs. Smt. Ram
Chambeli  INSC 3 (3 January 1984)
VENKATARAMIAH, E.S. (J) VENKATARAMIAH, E.S.
(J) MISRA, R.B. (J)
CITATION: 1984 AIR 595 1984 SCR (2) 290 1984
SCC (1) 612 1984 SCALE (1)5
CITATOR INFO :
F 1986 SC1019 (4) D 1987 SC1986 (21) D 1987
SC1996 (9,10) R 1990 SC 325 (16) R 1990 SC1113 (3) E 1992 SC1555 (2,15)
Delhi Rent Control Act, 1958 (Act 59 of 1958)
Section 21-While invoking the remedial provisions of Section 21, the landlord
should come with clean hands a and not suppress or falsify facts-Doctrine of
sup-pressioveri will disentitle him to get back possession later in such cases
of suppression of facts-Duty of the Court-Meaning of collusion-Right to resile,
when available-Rule of oppression and illegal contract explained.
The respondent Smt. Ram Chambeli leased out
the suit premises to the appellants for a period of three years under an order
dated December 22, 1977 passed by the Additional Rent Controller in Suit No.
M/798/77 under section 21 of the Delhi Rent Control Act. On the expiry of the
said period, when the respondent filed an application before the Rent
Controller for possession of the premises, the appellants filed objections,
highlighting how by suppression and falsifying facts the respondent resorted to
the provisions of section 21 of the Rent Act, and challenged the need for
personal occupation. The Additional Rent Controller, therefore, after hearing
both sides revoked the permission granted in 1977. However, the Rent Control
Tribunal set aside the order of the Addl. Rent Controller and ordered eviction.
The High Court in Second Appeal confirmed Tribunal's order. Hence the tenant's
appeal by Special Leave of the Court, Allowing the appeal, the Court,
HELD : 1. On the facts and circumstances of
the case, the landlady is not entitled to invoke the remedy under section 21 of
the Delhi Rent Control Act. The permission under section 21 of the Act had been
obtained by her on the basis of wrong statement, but for which the permission
would not have been accorded. These statements which were in the nature of half
truths were apparently made in order to make good the plea that there was only
a temporary necessity to lease out the building for a short period and that
there was a bonafide anticipation that there would be a pressing necessity to
reoccupy the premises at the end of the period, which were the two crucial
factors governing and order under section 21 of the Act. [296 F; E] S.B.
Noronah v. Prem Kumari Khanna,  1 S.C.R.
2 : 1 It is true that the appellants who were
the weaker of the two parties did not question the truth of the statements made
by the respondent when the permission was granted. But such conclusion, if any,
between the two unequal parties does not confer any sanctity on the transaction
in question. In cases of this nature it is always open to the weaker of the two
parties to establish that the transaction was only a camouflage used to cover
its true nature. [296 H; 297 A] 291 2:2. Collusion implies the existence of two
or more parties who can deal with each other independently with the object of
entering into an arrangement which may serve as a cloak to cover up the real
state of affairs. When one party can dominate over the will of the other, it
would not be a case of collusion but one of compulsion. The above view is fully
in consonance with the spirit behind the rule of oppression which is recognised
as an exception to the doctrine that a party cannot recover what he has given
to the other party under an illegal contract. The ground that the appellants
cannot challenge the permission initially granted under section 21 of the Act
is not, therefore, available in this case. [297 B-C] Smith v. Cuff  6 M
& S 160 @ 165, quoted with approval.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 2800 of 1982.
From the Judgment and Order dated the 23rd
August, 1982 of the Delhi High Court at New Delhi in S.A.O. No. 277 of 1982.
E.X. Joseph and N.S. Das Behl for the
J.M. Khanna for the Respondent.
The Judgment of the Court was delivered by :
VENKATARAMIAH, J. This is an appeal by
special leave against the judgment of the High Court of Delhi dated August 23,
1982 in S.A.O. No. 277 of 1982 dismissing the appeal filed by the appellants.
The respondent Smt. Ram Chambeli leased out
the premises in question to the appellants under an order dated December 22,
1977 passed by the Additional Rent Controller in suit No. M/798/77 under
section 21 of the Delhi Rent Control Act, 1958 (Act 59 of 1958) (hereinafter
referred to as `the Act'), the relevant part of which reads thus :
"Statement of Smt. Ram Chambeli w/o Sh.
G.L. Gandhi I am the owner-landlord of premises No. 637, Double Storey, New
Rajinder Nagar, New Delhi. The entire premises comprising of two rooms, kitchen,
bath, latrine shown in the plan Exhibit-A1 is surplus with me for a limited
period of 3 years which I want to let out to the respondent for residential
purposes for the said period at rupees 425/- p.m. which is mentioned in Mark B
with effect from the date of permission. I have never let out the portion to
anybody earlier to it. My son and my mother were living in the 292 said
premises. My mother has not been feeling well. My son is studying in 9th class.
After about three years my mother will be alright and my son will grow up and
for them I shall require the premises after three years.
RO & AC ARC Statement of Shri V.S. Rahi,
son of Sh. Thakur Gopal Singh, 45 years, teacher and Smt. Santosh Rahi w/o Shri
V.S. Rahi, aged 45 years, teacher resident of 33/52, Prabhat Road, Karol Bagh,
New Delhi. We want the premises for three years for the residential purposes
from the date of permission. We are not in possession of the premises nor were
we tenants in it.
RO & AC ARC ORDER This order will dispose
of application under Section 21 DRC Act filed by Smt. Ram Chambeli applicant
seeking permission to let out first floor of her premises No. 637 Double
Storey, New Rajinder Nagar, New Delhi. It is stated that the first floor of the
said premises comprising of two living rooms, kitchen, bath and latrine
detailed in plan exhibit A-1 is surplus with her for a limited period of three
years and she will require it after the said period of three years.
The petitioner and respondent have made
statement on oath in this connection. In view of the statement of the parties,
permission u/s 21 of DRC Act is granted to Smt. Ram Chambeli, wife of Shri G.L.
Gandhi applicant to let out first floor of her premises No. 637, Double Storey,
New Rajinder Nagar, New Delhi to Shri V.S. Rahi and Smt. Santosh Rahi
respondents for residential purposes for the said period of three years with
effect from the date of the order.
J.D. Kapoor, Add. Rent Controller" On
the expiry of the period of three years mentioned in the above order the
respondent filed an application before the Additional Rent Controller for
possession of the premises. The appellants filed objections to the said
application stating that the respondent was comfor- 293 tably living with her
husband and son in the ground floor of the building; that she was not in need
of the first floor of the building which had been leased out in their favour;
that the statement that her mother was living with her was not true; that her
son was studying in the 7th class in 1977 and not in the 9th class as stated by
her before the Rent Controller in 1977 and that the Rent Controller had
permitted the leasing out of the building under section 21 of the Act without
applying his mind. It was further pleaded that the application had been filed
with a view to extracting higher rent. The appellants also stated that the
statement of the respondent that she had not leased out the building earlier to
any body else was not true. After going through the affidavits filed by the
parties in support of their cases the Additional Rent Controller held that the
respondent had obtained the permission under section 21 of the Act by making
wrong statements and accordingly revoked the said permission. Consequently the
appellants could not be evicted under that section. Aggrieved by the order of
the Additional Rent Controller, the respondent filed an appeal before the Rent
Control Tribunal. The Tribunal allowed the appeal and directed the eviction of
the appellants. The Tribunal observed that when the Controller had been informed
by the respondent right at the time when the permission was granted under
section 21 of the Act that the property was not required by her for a period of
three years but would be needed after that period for the use of her son and
her mother who was unwell at that time, there was no ground to hold that the
transaction was not genuine. The second appeal filed by the appellants against
the order of the Tribunal was dismissed by the High Court. This appeal by
special leave is filed against the judgment of the High Court.
Section 21 of the Act reads.
"21. Where a landlord does not require
the whole or any part of any premises for a particular period, and the
landlord, after obtaining the permission of the Controller in the prescribed
manner, lets the whole of the premises or part thereof as a residence for such
period as may be agreed to in writing between the landlord and the tenant and
the tenant does not, on the expiry of the said period, vacate such premises,
then, notwithstanding anything contained in section 14 or in any other law,
the, Controller may, on an application made to him in this behalf by the
landlord within such time as may be prescribed, place the 294 landlord in
vacant possession of the premises or part thereof by evicting the tenant and every
other person who may be in occupation of such premises." When section 21
of the Act was enacted it was believed that it would encourage landlords, who
would not ordinarily be willing to lease out a building as a residence for a
short time even though they might not be in need of it during that period, to
lease it out for such short period because of the summary remedy provided by
that section to recover possession of the building quickly from the tenant
instead of the usual eviction proceedings which would take a long time to
It was not perhaps fully realised at the time
of the enactment of section 21 of the Act that many unscrupulous landlords
would enter into arrangements purporting to be those under that section but in
reality were ordinary leases and would utilise the threat of the summary remedy
available under that section to realise higher rents or for any other purpose
considered to be contrary to the benign purposes sought to be achieved by the
Act. When one such case in which the genuineness of a transaction entered into
under section 21 of the Act came before this Court in S.B. Noronah v. Prem
Kumari Khanna,(1) Krishna Iyer, J. observed :
"It is easy to envisage the terrible
blow to the rent control law if Section 21 were freely permitted to subvert the
scheme of Section 14. Every landlord will insist on a tenant going through the
formal exercise of Section 21, making ideal averments in terms of that Section.
The consequence will be that both the Civil Procedure Code which prescribes
suits for recovery of possession and the Delhi Rent Control Act which
prescribes grounds for eviction will be eclipsed by the pervasive operation of
Section 21. Neither grounds for eviction nor suits for eviction will thereafter
be needed, and if the landlord moves the court for a mere warrant to place the
landlord, through the court process, in vacant possession of the premises, he
gets it. No court-fee, no decree, no execution petition, no termination of
tenancy wish for possession and the court is at your command. Such a horrendous
situation will be the negation of the rule of law in this area.
So it is that we deem it necessary to 295 lay
down the law as implied in Section 21.
When an application under Section 21 is filed
by the landlord and/or tenant, the Controller must satisfy himself by such
inquiry as he may make about the compulsive requirements of that provision. If
he makes a mindless order, the Court, when challenged at the time of execution,
will go into the question as to whether the twin conditions for sanction have
really been fulfilled." The appeal before us has to be considered against
the above background.
It is urged by the appellants that the order
passed under section 21 of the Act in this case having been obtained on the
basis of statements which were wrong, the application for eviction should be
While it is true that the Court should
proceed with the initial presumption that the order under section 21 of the Act
was a regular one, the Court should still examine the material placed before it
by the tenant inducted under that provision in order to satisfy itself that
there has not been any misuse of the said provision by the landlord taking
advantage of the helpless situation in which the tenant was placed at the time
when such order was obtained.
In the instant case it is seen that there
were three wrong statements made by the respondent when she approached the
Additional Rent Controller seeking permission under section 21 of the Act to
lease out the property. First, it is not true that the building had not been
leased out earlier. Now it is admitted before us that there was one Kataria
occupying the building as a tenant on a monthly rent of Rs. 100/- only and he
had vacated the same about four or five months before the, date on which the
order was made under section 21 while it is true that he had been there as a
tenant even before the respondent purchased the building in the year 1972.
After he vacated the building, it was leased out to the appellants on a rent of
Rs. 425/- per mensem. Secondly, it is admitted that the respondent's mother was
not living with her. It is now admitted before us that the woman who is more
than 75 years old described as the mother of the respondent in the statement of
the respondent recorded by the Additional Rent Controller when permission was
given under section 21 is the sister of the respondent's father although in the
course of the pro- 296 ceedings before the Additional Rent Controller out of
which this appeal arises, she was described as the adoptive mother of the
respondent. It is now stated that she is the foster mother of the respondent
and that she came with the respondent to the residence of her husband after her
marriage. It is stated that she was suffering from cataract in her eyes; that
it was not ripe for being treated in 1977 when the order was passed under
section 21 of the Act and that it was expected that after the cataract was
removed she would need the building in the occupation of the appellants which
is equal in size to the ground floor in the occupation of the respondent.
Thirdly, the son of the respondent was an young boy studying in the seventh
class in 1977 and not in the ninth class. From the foregoing it is obvious that
the respondent had suppressed that there was a tenant in the building who had
vacated only a few months before the date of the application under section 21
of the Act; had made false statement about the relationship with her so-called
foster mother; had not disclosed the nature of her sickness which was expected
to be cured in three years; had stated that her son was studying in the ninth
class to make it appear that he would be sufficiently old at the end of the
period of three years and that he would be in need of extra accommodation.
These statements which were in the nature of half-truths were apparently made
in order to make good the plea that there was only a temporary necessity to
lease out the building for a short period and that the respondent bona fide
anticipated that there would be a pressing necessity to reoccupy the premises
at the end of the period which are the two crucial factors governing an order
under section 21 of the Act. The reasons given in this case are quite
unconvincing. We are not satisfied that the respondent honestly believed when
she applied for permission under section 21 of the Act that she would be in
need of the premises in question at the end of the stipulated period. On a
consideration of the material before him, the Additional Rent Controller was
right in holding that the permission under section 21 of the Act had been
obtained by the respondent on the basis of wrong statements but for which the
permission would not have been accorded.
It is, however, urged that the appellants who
had colluded with the respondent when permission was granted under section 21
of the Act should not be now allowed to resile from the stand they had taken
then. It is true that the appellants who were the weaker of the two parties did
not question the truth of the statements made by the respondent when the
permission was granted. But such collusion, if any, between the two unequal
parties does not confer any sanctity 297 on the transaction in question. In
cases of this nature it is always open to the weaker of the two parties to
establish that the transaction was only a camouflage used to cover its true
nature. Collusion implies the existence of two or more parties who can deal
with each other independently with the object of entering into an arrangement
which may serve as a cloak to cover up the real state of affairs. When one
party can dominate over the will of the other, it would not be a case of
collusion but one of compulsion. The above view is fully in consonance with the
spirit behind the rule of oppression which is recognised as an exception to the
doctrine that a party cannot recover what he has given to the other party under
an illegal contract. 'It can never be predicated as pari delicto where one
holds the rod and the other bows to it'. (Per Lord Ellenborough in Smith v.
Cuff (1817) 6 M & S 160 at 165). Cases which call for appropriate relief to
be given to an innocent party where 'one has the power to dictate, the other
has no alternative but to submit are not uncommon. Cheshire and Fifoot's Law of
Contract (10th Edn.) referes to another type of case belonging to this
category. At page 338 of that treatise is the following passage:
"Another type of case where the parties
are not regarded as equally delictual is where the contract is rendered illegal
by a statute, the object of which is to protect one class of persons from the
machinations of another class, as for example where it forbids a landlord to
take a premium from a prospective tenant.
Here, the duty of observing the law is placed
squarely upon the shoulders of the landlord, and the protected person, the
tenant, may recover an illegal premium in an action for money had and received,
even if the statute omits to afford him this remedy either expressly or by
implication. In the words of Lord Mansfield :
Where contracts or transactions are
prohibited by positive statutes, for the sake of protecting one set of men the
one from another set of men; the one from their situation and condition being
liable to be oppressed and imposed upon by the other; there the parties are not
in pari delicto; and in furtherance of these statutes, person injured after the
transaction is finished and com the pleted, may bring his action and defeat the
contract," The ground that the appellants cannot challenge the permission
298 initially granted under section 21 of the Act is not therefore, available
in this case.
The Tribunal and the High Court have
approached the present case in a mechanical way and have failed to apply
correctly the ratio of the decision in Noronah's case to the facts before them.
We are of the view that on the facts and in the circumstances of the case the
respondent is not entitled to invoke the remedy under section 21 of the Act to
recover possession of the premises.
In the result, the judgments of the High
Court and of the Tribunal are set aside and the application filed by the
respondent under section 21 of the Act for recovery of the premises is
The appeal is accordingly allowed with costs.
S.R. Appeal allowed.