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Firm Durga Prasad Magniram Vs. Dr. Ganesh Prasad - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtMadhya Pradesh High Court
Decided On
Case NumberFirst Appeal No. 173 of 1975
Judge
Reported inAIR1982MP219
ActsCentral Provinces and Berar Letting of House and Rent Control Order, 1949 - Sections 12A; Contract Act - Sections 23 and 65; Code of Civil Procedure (CPC) , 1908 - Order 7, Rule 7; Madhya Pradesh Accommodation Control Act, 1955 - Sections 4
AppellantFirm Durga Prasad Magniram
RespondentDr. Ganesh Prasad
Appellant AdvocateY.S. Dharmadhikari, Adv.
Respondent AdvocateA.R. Choube, Adv.
DispositionAppeal partly allowed
Cases ReferredKakubhai & Co. v. Nathmal Kisanlal
Excerpt:
.....7. the defendant further took the plea that unless the plaintiff pleaded and proved the express permission of its landlord for subletting, the plea of subtenancy set up by the plaintiff would be unlawful and void under the provisions of clause 12-a of the central provinces and berar letting of house and rent control order, 1949, as well as under section 23 of the contract act. acts of 1955 as well as of 1961 came into force. the distinction between an agreement and a contract would be distinctly clear from their definitions as given in section 2 of the contract act. in the present case, as discussed above, the agreement of subletting was, void from its very inception being in contravention of the statutory provisions which prohibited subletting and therefore, it can well be said that..........from whom be obtained thepremises even if the inter se relationship between them as tenant and sub-tenant was void and contrary to the provisions of law? and (3) whether under the facts and circumstances of the case, the plaintiff was entitled to exclusion of the period from 7-10-1959 to 10-9-1969 under the provisions of the limitation act, 1963, and therefore, the suit for arrears of rent from oct. 1961 to feb. 1972 was not barred by time? 11. before proceeding to discuss the points in controversy noted above, it would be advantageous to refer to the relevant provisions of the respective rent control laws which were extended to the municipal area where the suit premises are situated, that is sagar. it has not been disputed by the parties that at the relevant time when the premises in.....
Judgment:

Faizanuddin, J.

1. This is an appeal by the unsuccessful plaintiff against the judgment and decree dated 30th Aug. 1975, passed by the Additional District Judge, Sagar, in C. S. No. 2-B of 1972, whereby plaintiff's suit for arrears of rent was dismissed.

2. It was not disputed between the parties that the defendant-respondent occupied a part of 'Chintamani Bhavan' at Sagar since 1954, and prior to that, the said portion was occupied by one Dr. Surajprasad. With several riders in his pleadings, the defendant admitted that he was a sub-tenant of the plaintiff-firm in respect of the portion occupied by -him. The Bhavan was owned by firm Durgaprasad Mukharya. In execution of a decree passed in Civil Suit No. 88-B of 1957, the said Bhavan was sold on 7-10-1959 in court auction which was purchased jointly by Smt. Laxmi Bai (wife of present defendant) and one Ram-charan, son of Heeralal, the Managing Pariner of the plaintiff firm. The sale was confirmed on 1-1-1962, and the sale certificate was also issued on 25-7-1962. But the said auction sale was set aside by the High Court on 27-2-1969 in Misc. Civil Appeal No. 273 of 1968 at the instance of the judgment-debtor, Firm Durga Prasad.

3. In brief, the plaintiff's case was that it has obtained 'Chintamani Bhavan' on monthly rental of Rs. 200/-from his owners and sublet only a part of it to the defendant respondent on a monthly rent of Rs. 100/- with implied permission of the owners/landlords. The defendant paid rent of the said portion to the plaintiff up to the year 1960 but thereafter failed to pay the same.

4. The plaintiff's further case was that admittedly the Bhavan was sold in court auction on 7-10-1959, and Smt, Laxmi Dube, w/o the defendant, was one of the two purchasers, but she was a Benami purchaser on behalf of her husband, the defendant in the present suit. The plaintiff firm, therefore, averred that its right to recover the rent from the defendant was in effect, stayed till the date theauction sale of the Bhavan was set aside by the High Court, i.e. up to 27-2-1969, and this right to recover the rent from the defendant was available only on 10-9-1969 when the Supreme Court also refused to grant special leave to appeal against the order dated 27-2-1969, passed by the High Court, in Misc. C. A. No. 273 of 1968, setting aside the auction sale.

5. The plaintiff further averred that the defendant was in arrears of rent with effect from Oct. 1961 to Feb. 1972 for 125 months out of which the defendant paid only Rs. 565-27 and after adjusting the same, a sum of Rs, 11,934-73 was still due as arrears of rent against the defendant up to the date of institution of the suit. On the question of limitation, the plaintiff pleaded that as his right to recover rent remained suspended with effect from 7-10-1959, the date of auction sale of the Bhavan, up to 10-9-1969 when the Supreme Court refused to grant leave to appeal against the order dated 27-2-1969 passed by the High Court quashing the auction sale, and therefore, the plaintiff was entitled to exclusion of the said period under Section 15 of the Limitation Act, 1963.

6. The defendant contested the suit by denying all the plaint-allegations except the facts stated in para No. 2 above, The defendant denied that the plaintiff-firm had obtained the Bhavan in question on a monthly rental of Rs. 200/- or that he was inducted as a sub-tenant by the plaintiff in a portion of the said Bhavan. The defendant also denied that he paid any rent to the plaintiff up to the year 1960. He also refuted the allegation that his wife, Smt. Laxmi Bai Dube was a Benami purchaser for and on his behalf. The defendant denied that the plaintiff was legally entitled to exclusion of the period from 7-10-1959 to 10-9-1969 in computing the limitation for the suit because after confirmation of sale, there was no stay of plaintiff's right to recover rent from the defendant and the defendant was not a party to Misc. Civil Appeal No. 273 of 1968, and therefore, the suit was barred by limitation.

7. The defendant further took the plea that unless the plaintiff pleaded and proved the express permission of its landlord for subletting, the plea of subtenancy set up by the plaintiff would be unlawful and void under the provisions of Clause 12-A of the Central Provinces and Berar Letting of House and Rent Control Order, 1949, as well as under Section 23 of the Contract Act. The defendant further contended that the plaintiff had itself disowned the status of defendant as sub-tenant in Civil Suit No. 11-A of 1961 instituted by the plaintiff's landlords of that suit for eviction of the present plaintiff-appellant on the ground that the plaintiff-firm had sublet a portion to the present defendant, and therefore, the plaintiff had no right to contend that the defendant was its sub-tenant and claim rent on that account as the plaintiff was now estopped from so contending.

8. The learned trial court dismissed the suit by holding that the plaintiff was not entitled to exclusion of period from 7-10-1959 to 10-9-1969 and that the claim for rent beyond three years from the date of institution of the suit was barred by time, but the contract of subtenancy being against the express provisions of law, no rent at all can be recovered thereunder, against which this appeal has been directed.

9. As regards the nature and character of possession of the defendant-respondent in respect of the part of the Bhavan in question, it was not seriously disputed. The defendant himself did not enter the witness-box to deny that he was not a sub-tenant in respect of the portion occupied by him. On the contrary, a perusal of his deposition. Ex. P-17 dated 28-11-1970, made in Civil Suit No. 88-B of 1957, and Ex. P-18, recorded in July, 1971 in the eviction suit No. 11-A of 1961. goes to show that the defendant admitted that he was a subtenant. The learned trial court, on appreciation of the evidence, took the view that the defendant was a sub-tenant with which I find myself in agreement,

10. Having regard to the facts of the case and the arguments advanced before me, the questions which arise for my consideration may be formulated thus:--

(1) Whether in the absence of express or written permission, subletting of the portion of the Bhavan by the plaintiff to the defendant in 1954 was void and contrary to law then in force?

(2) Whether the defendant sub-tenant was obliged in equity to pay rent to the plaintiff from whom be obtained thepremises even if the inter se relationship between them as tenant and sub-tenant was void and contrary to the provisions of law? And

(3) Whether under the facts and circumstances of the case, the plaintiff was entitled to exclusion of the period from 7-10-1959 to 10-9-1969 under the provisions of the Limitation Act, 1963, and therefore, the suit for arrears of rent from Oct. 1961 to Feb. 1972 was not barred by time?

11. Before proceeding to discuss the points in controversy noted above, it would be advantageous to refer to the relevant provisions of the respective Rent Control Laws which were extended to the Municipal area where the suit premises are situated, that is Sagar. It has not been disputed by the parties that at the relevant time when the premises in suit were sublet to the defendant, the Central Provinces and Berar Letting of House and Rent Control Order, 1949 (hereinafter referred to as C. P. & Berar Act) was in force of which Section 12-A provided as under:--

'Section 12-A. No person being a tenant shall sublet any portion of the accommodation under his occupation except in pursuance of a condition in the lease-deed executed in favour of the tenant or with the written consent of the landlord.

For the purpose of this section, the expression 'tenant' shall not include a 'sub-tenant.'

12. The C. P. and Berar Act was replaced by Madhya Pradesh Accommodation Control Act. 1955 (Act No. 23 of 1955), which came into force on 1-1-1959 (hereinafter referred to as the M. P. Act of 1955). The provisions of the said Act in so far as they are material and relevant for the present case are reproduced hereunder:--

'Section 3, Definitions:-- Unless there is anything repugnant in the subject or context;--

XXX XXX XXX (b) 'Lease' includes a sub-lease.

(f) 'Tenant' means a person by whom rent is payable or but for a contract express or implied would be payable for any accommodation and includes any person occupying the accommodation as a sub-tenant,

'Section 4. Restrictions on eviction. -- No suit shall be filed in any Civil Courtagainst a tenant for his eviction from any accommodation except on one or more of the following grounds:--

(a) to (d) xx xx xx(e) that the tenant has, without an express permission in the contract, sublet the whole or any portion of the accommodation; or that he has assignedhis tenancy right to another or has removed his possession therefrom;

Provided that if the accommodation had been so sublet before the commencement of this Act with the direct and indirect permission of the landlord, the tenant shall not be liable to eviction; XXX XXX XXX.'

13. It may be noted that again this M. P. Act of 1955 was repealed and the M. P. Accommodation Control Act, 1961 (Act No. 41 of 1961) (hereinafter referred to as the M. P. Act of 1961) came into force on 1-2-1962 in Sagar Municipal area which still continues. Clause (b) of Sub-section (1) of Secton 12 of this Act would be relevant to refer which runs as under:--

'Section 12. Restriclion on eviction of tenants.-- (1) notwithstanding anything to the contrary contained in any other law or contract, no suit shall be filed in any Civil Court against a tenant for his eviction from any accommodation except on one or more of the following grounds only, namely :

(a) xx xx xx

(b) fhat the tenant has, whether before or after the commencement of thisAct. unlawfully sublet, assigned orotherwise parted with the possession ofthe whole or any part of the accommodation for consideration or otherwise, xxx xxx xxx.'

14. The learned counsel for the appellant, in connection with the question No. 1 as formulated in para No. 10 above, first contended that the agreement of subletting the portion of the Bhavan in question entered into between the plaintiff and the defendant in contravention of the provisions of the C. P. and Berar Act was a valid agreement which can be enforced. In support of this submission, some decisions of the Allahabad High Court and Supreme Court were referred to me dealing with Ss. 3 and 7 of the U. P. (Temporary) Control of Rent and Eviction Act (No. 3 of 1947), hereinafter referred to as the U. P. Rent &Eviction; Act. In order to appreciate the decisions referred, it may be noted here that Section 3 of the U. P. Rent & Eviction Act required a landlord to first obtain permission of the District Magistrate to file eviction suit against his tenant and 7 related to the general order of the District Magistrate requiring the landlord to report the vacancy of accommodation to him who had power to allot the same to a tenant. Further, Section 7-A of the U. P. Act related to the power of the District Magistrate to take action against unauthorised occupation in contravention of his order to let out or not to let out the accommodation to a certain person. A Division Bench of the Allahabad High Court, in Shyam Sunder, Lal v. Lakshmi Narain, AIR 1961 All 347 took the view that under Section 7 of the U. P. Rent and Eviction Act, the right of landlord to let has been absolutely restricted under the said Act and he has no right to let out the accommodation to any person he likes if the accommodation is such that the provision of that Act apply to it, and therefore, the agreement to let would be void having been entered into in contravention of the express provisions of the Act. But this Division Bench decision was overruled by a Full Bench of that very court constituted by three learned Judges in Udhoo Dass v, Prem Prakash, AIR 1964 All 1 (FB) wherein it was ruled that a contract of tenancy entered into in violation of order under Section 7 (2) of the U. P. Rent and Eviction Act is not void. It has been further observed that a contract of tenancy is rendered invalid, void or not depends solely upon the provisions of the Transfer of Property Act and the Contract Act and that there is no provision whatsoever rendering a contract of tenancy entered into by a landlord and another person void or even illegal. But again there was a departure from this view by the same High Court of Allahabad. In another Full Bench decision in Abdul Ham-eed v. Mohommed Ishaq, AIR 1975 All 166 constituted by five learned Judges, decided on 26-4-1974, has Allahabad High Court overruled the earlier Full Bench decision rendered in Udhoo Dass case (supra) and upholding the Division Bench decision in Shyam Sunder Lal's case (supra), took the view that an agreement of tenancy made in violation of a general order issued by the District Magistrate underSection 7 (2) of the U. P. Act is void and the person to whom the accommodation has been let out under such agreement is liable to be proceeded against under Section 7-A at the instance of person in whose favour an allotment order has been passed by the District Magistrate either prior or subsequent to the date on which the accommodation was unauthorisedly let out by the landlord to the former person.

15. But this controversy was set at rest by the Supreme Court in Murlidhar v. State of U. P., AIR 1974 SC 1924, decided on 29-7-1974, in which the view taken by the Full Bench of Allahabad High Court in the case of Udhoo Dass (AIR 1964 All 1) (supra) was approved. The Supreme Court held that a lease made in violation, of the provisions of Section 7 (2) would be valid between the parties and would create the relationship of landlord and tenant between them although it might not bind the authorities concerned. It has been further observed that the lessee who had been paying rent to the lessor was a tenant and permission under Section 3 to file a suit for eviction was necessary. The net result which emerges out from the decisions referred to above is that though a landord may not have reported the vacancy of the accommodation to the District Magistrate so that he may have passed an order of allotment in favour of any person, and the landlord himself let out the same, yet the tenancy which came into existence would be valid in spite of its being in violation of the provisions of Section 7 (2) of the U. P. Rent and Eviction Act. The only effect of such a lease would be that it would not be binding on the authorities concerned who can still pass an order of allotment under the provisions of the U. P. Act. But these decisions are not directly on the points in controversy in the case before me. Here the main question is, whether the subletting of any portion by a tenant to another person without the written permission of his landlord, which is expressly and specifically prohibited by an enactment, would be void or not. This point is not covered by any of these decisions.

16. The learned counsel for the appellant next contended that the landlord of the plaintiff had taken no action during the enforcement of C. P. and Berar Act, 1949, for inducting the defendant as a sub-tenant in 1954, Section 12-A of which prohibited subletting except in pursuance of a condition in the lease deed itself or with the written permission of the landlord. His main argument was that Clause (b) of Section 3 of the M. P. Act, 1955, defined 'lease' to include a sub-lease also and Clause (f) defined 'tenant' to mean a person by whom rent was payable or but for a contract express or implied, would be payable for any accommodation and included any person occupying the accommodation as a sub-tenant. He, therefore, stressed that since the defendant was occupying the premises as a sub-tenant to the knowledge of the owner/landlord and with his implied consent and permission and as such on the enforcement of the M. P. Act, 1955, the rigour of the old provision was taken away by the Proviso attached to Clause (e) of Section 4 of the M. P. Act of 1955 which provided that if the accommodation has been sublet before the commencement of this Act with the direct and indirect permission of the landlord, the tenant shall not be liable to eviction. He also urged that on coming into force of the M. P. Act of 1961, on 1-2-1962, Clause (b) of Sub-section (1) of Section 12 furnished a ground to the landlord for eviction of a tenant where the tenant had whether before or after the commencement of that Act, unlawfully sublet, assigned or otherwise parted with the possession of the whole or any part of the accommodation for consideration or otherwise. The learned counsel contended that the owner/landlord had not taken any objection for the subletting of the premises by plaintiff to the defendant till 1-1-1959 when the C. P. and Berar Act stood repealed, and therefore, implied permission to sublease should be inferred. After a close scrutiny of all the relevant provisions oi the three Acts referred to above, I could not persuade myself to accept his contentions.

17. It is almost an admitted fact that the premises in question were let out to the defendant in 1954 when the C. P. & Berar Act of 1949 was in force and that the same agreement of sub-tenancy continued when the M. P. Acts of 1955 as well as of 1961 came into force. A plain reading of Section 12-A of the C. P. and Berar Act will go to show that it incorporated a complete prohibition in subletting by a tenant except in pursuance of a condition in lease deed itself orwith a written permission of the land-ord and further that the expression 'tenant' used in Section 12-A was not in-ended to include a 'sub-tenant'. In other words the sub-tenancy would have been legal only when there was an enabling condition in the lease-deed or a written permission of the landlord for ts creation. In the present case, there was neither of the two things. In the absence of such an enabling condition or a written permission even the inference of implied consent of the landlord will not help the plaintiff as according to the law, there should be a written permission and not implied, direct or indirect. In the present case, the subtenancy was created by the plaintiff in favour of the defendant in direct con-travention of the mandatory prohibition incorporated in the Statute then in force, and therefore, it was contrary to law and void from its very inception. Even the provisions of Clause (e) of Section 4 of the M. P. Act, 1955, required an express permission in the contract for creation of a valid and lawful sub-tenancy by a tenant. No benefit or any advantage could be conferred on the plaintiff by virtue of the proviso to Clause (e) of Section 4 of the M. P. Act, 1955, as it simply protected those sub-tenancies which were validly created before the commencement of the said M. P. Act of 1955, with the direct or indirect permission of the landlord. As seen above, under the C. P. and Berar Act of 1947, a sub-tenancy Could be validly and lawfully created only either in pursuance of a condition in the lease-deed or with a written permission of the landlord. The proviso to Clause (a) (e) of Section 4 of the M. P. Act of 1955 did not, in any manner, touch a sub-tenancy, which from its very inception was void having been created in complete contravention of the statutory provisions. In any event, in such a situation, a sub-tenancy which was illegal from its inception under the law then in force, could not be converted into a legal contract as such an agreement was forbidden by law, and therefore, it was hit by the provisions of Section 23 of the Contract Act also. In this view of the matter, I am supported by a Division Bench decision of this court in Smt, Thakurain Dulaiya v. Shivnath Habeli-ram Punjabi, 1968 MPLJ 251; (AIR 1969 Madh Pra 130) and Brijkishore Bhar-gava v, Shyam Swamp Darbari, 3959MPLJ (Notes) 73 and Liladhar Dariyana v. Chimman Ram, AIR 1955 Vindh Pra 31. also support the same view.

18. This brings me to the next question whether the agreement of sub-tenancy being void, still the sub-tenant would be under the obligation to pay the rent. This argument has been advanced by the learned counsel for the appellant on the strength of the provisions contained in Section 65 of the Contract Act, 1872, which provides that when an agreement is discovered to be void, any person who has received any advantage tinder such aggreement or contract is bound to restore it or to make compensation for it, to the person from whom he received it. Thus the sheet anchor of the plaintiff's claim for rent is Section 65 of the Contract Act which deals with (i) agreements and (ii) contracts which are void. The distinction between an agreement and a contract would be distinctly clear from their definitions as given in Section 2 of the Contract Act. Cl. (e) of Section 2 contemplates that every premise and every set of premises, forming the consideration for each other, is an agreement and Clause (h) contemplates that an agreement enforceable by law is a contract. Thus, Section 65 deals with (i) agreements enforceable by law and (ii) with agreements which are not so enforceable by law. Clause (g) of Section 2 further contemplates that an agreement which is not enforceable by law is said to be void. This follows that an agreement discovered to be not enforceable by law, and, on the language of Section 65, would in-1 elude an agreement that was void in that sense from its inception as distinct from a contract that becomes void. In the present case, as discussed above, the agreement of subletting was, void from its very inception being in contravention of the statutory provisions which prohibited subletting and therefore, it can well be said that it was discovered to be void within the meaning of Sec. 65 of the Contract Act,

19. In District Council, Wardha v, Anna Daulatrao, AIR 1941 Nag 273 this court had an occasion to deal with the claim of compensation under Section 65 of the Contract Act where the contract was discovered to be void ab inito, In this case, the trial court had held that the lease was void, but a decree for compensation for use and occupation of the premises was passed by virtue of Section 65.The High Court of Nagpur after considering a series of its previous decisions, as well as of other High Courts and Privy Council, fell in line and upheld the decision of the trial Court. This view also finds support from the decisions in Thakurain Harnath Kuar v. Inder Bahadur, AIR 1922 PC 403 and Firm Govindram Seksaria v. Edward Radbone. AIR 1948 PC 56. In Dharm-puram Municipal Council v. Sultan. AIR 1934 Mad 335. It was observed that when a contract is found to be void, even though the relief that may be given is said to be based on the principle of quantum meruit. still speaking with reference to the Indian Law, the relief is based under Section 65 of the Contract Act.

20. In very recent two decisions of Allahabad and Bombay High Courts also the same view has been taken as discussed above. In Ishwar Dayal v. Rath Municipality, AIR 1980 All 143 it has been held that Section 65 of the Contract Act applied even to contracts which are void ab initio, and that the defendant who had under such contract taken some advantage may be compelled to account for such advantage or pay the stipulated sum. Similarly a Division Bench of the Bombay High Court in Kakubhai & Co. v. Nathmal Kisanlal, AIR 1980 Bom 25 in a suit based on title, in para 17, al-most took the same view. In the case before me, admittedly the defendant had obtained possession as a sub-tenant of a portion of the Bhavan in question from the plaintiff and the defendant thus took advantage by use and occupation of the jsaid premises. In my opinion, therefore, the agreement of sub-tenancy though void, the defendant was liable to pay compensation to the plaintiff for use and occupation of the premises obtained by the defendant from the plaintiff and the court has power to grant such a relief under Order 7, Rule 7 of the Civil P. C. though specifically there may not be a prayer for grant of such an alternative relief.

21. Regarding the exclusion of time from auction sale, that is, 7-10-1959 to 10-9-1969, the date of alleged refusal of leave by the Supreme Court, for purposes of limitation of the suit, the learned trial court took the view that in view of the facts and circumstances of the case, the period taken in the challenge to the court-sale should be excluded.but the last order in the series alleged to have been passed by the Supreme Court was dated 10-9-1969, which has been denied by the defendant, has not been filed on record. In the absence of proof, if the order passed by the Supreme Court is ignored, then the last order up to which the plaintiff could claim exclusion of time is the order dated 27-2-1969 passed by the High Court in Misc. Appeal No. 273 of 1968, which has been admitted by the defendant. But the suit having been filed on 16-3-1972 beyond the period of three years from the last order dated 27-2-1969, and therefore even if the period from 7-10-1959 to 27-2-1969 is excluded the suit for arrears of mesne profits for the period beyond three years from the date of the institution of the suit will be barred by time. In this view of the matter the plaintiff would be entitled to claim mesne profits for three years only next before the institution of the suit. i.e. for the period from 17-3-1969 to 16-3-1972. The plaintiff has established that the rate of rent was Rs. 100 per month for the premises sublet to the defendant. The plaintiff is, therefore, entitled to receive mesne profits also at that rate.

22. In the result, the appeal partly succeeds and is hereby allowed. The judgment and decree of the trial court are set aside and the plaintiff-appellant's suit is decreed for Rs. 3,600 as arrears of mesne profits for the period of 3 years next before the institution of the suit. The defendant shall bear his own costs and proportionate costs of the plaintiff appellant throughout. Counsel's fee according to schedule, if certified.


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