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The Madras Piece-goods Merchants Charitable Trust by Its Secretary V.S. Devanathan Vs. Moolchand Gupta and anr. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtChennai High Court
Decided On
Reported in(1966)2MLJ533
AppellantThe Madras Piece-goods Merchants Charitable Trust by Its Secretary V.S. Devanathan
RespondentMoolchand Gupta and anr.
Cases ReferredIn Shyamalal v. Umacharan
Excerpt:
- - the learned officiating chief justice, as he then was, who delivered the judgment in this reference, while dealing with the point urged by the learned counsel for the applicant stated inter alia that the wording of section 3 of act xi of 1964 can by no means be described as happy or free from any cloud or ambiguity. 260 and the principle laid down therein does not apply to a case, like the present, where the parties come to an agreement that the relationship shall not be that of landlord and tenant. ..and in clauses (a) to (n) those exceptional grounds are enumerated......retrospective in its operation. the act prohibited all courts from making any order evicting any tenant in execution of decree passed before or after that act came into force. the learned judges held that the expression ' makes any order in execution of a decree evicting any tenant', in section 9(1) applies to the stage when execution of a decree for ejectment is sought by the decree holder and that the argument that in ejectment suits the order for eviction is made when the decree is passed and that no order of eviction is passed in execution proceedings does not receive support from what is contained in order 7, rule 1, order 20, rules 6 and 12, order 21, rule 35, form no. 23 appendix 6 and form no. 11 appendix e, civil procedure code. the learned judges further held that as section.....
Judgment:
ORDER

P. Kunhamed Kutti, J.

1. The Applicant Moolchand Gupta, against whom a decree was passed on compromise and execution has been taken out for vacant possession, prays by the present application to dismiss the said E.P. and recall the warrant for delivery of possession.

2. The Suit C.S. No. 163 of 1962, by the plaintiff-respondent was for vacant possession of door Nos. 184-186, China Bazaar Road, George Town and the compromise decree directed the applicant to quit the portion in his. occupation of the aforesaid premises on or before 31st January, 1964, subject to the condition that the plaintiff would be entitled to take possession of the portion in the occupation of Panachand and the Bullion Market Post Office immediately by executing the decree. For the purpose of the present application, we are not concerned with the rest of the terms of the compromise.

3. After the aforesaid E.P. Panachand delivered possession of his portion to the plaintiff by attornment and as regards the portion occupied by the Bullion Market Post Office, an order has been passed under Sub-section (2) of Section 3 of the Rent Control Act XXX of 1952, and therefore, the relief prayed in E.P. No. 35 of 1964 was limited against the judgment-debtor-applicant in respect of the portion in his occupation. Meanwhile, Act XI of 1964 which had the effect of abating certain pending proceedings as a result of certain amendment to the Madras Buildings (Lease and Rent Control) Act, 1960, had come into force and it omitted Clause (3) of Section 30 of 1960 Act with consequential other amendments, so that the restriction as to the operation of the latter Act on the basis of rent was removed and non-residential buildings paying more than Rs. 400 also came within the purview of the Act.

4. In 1963, one Raval & Co. had filed a Writ Petition questioning the constitutional competence of certain proceedings against them before the Rent Controller. When the present application was filed by the applicant, this Writ Petition was pending; and by an order on a reference by Srinivasan, J., the above said petition and the present application which also raised substantially the same question, were posted before a Full Bench. The learned Officiating Chief Justice, as he then was, who delivered the judgment in this reference, while dealing with the point urged by the learned Counsel for the applicant stated inter alia that the wording of Section 3 of Act XI of 1964 can by no means be described as happy or free from any cloud or ambiguity. The learned Chief Justice observed

It is not very clear how a proceeding could have been instituted on the ground that such building or part was exempt from the provisions of the Principal Act by virtue of Clause (iii) of Section 30, or what is the precise scope of the rights and privileges which may accrue to the landlord, and which are to cease and determine.

But on the question whether the section had to be struck down either on the ground that it infringed Article 14 of the Constitution or upon any other patent ground of ultra vires, the learned Chief Justice held that its applicability to the stated facts of C.S. No. 163 of 1962 is a matter outside the scope of the reference before the Bench. On the constitutional validity of the Amending Act XI of 1964, it appears to have been argued that the provisions of Act XVIII of 1960 are themselves violative of Article 19 and equally so, Act XI of 1964. These contentions also were not upheld by the Full Bench as in the view expressed by the learned Chief Justice, they represented a valid exercise of the legislative power of the State and the restrictions imposed by the Acts on the fundamental rights guaranteed to the landowner by Article 19(1)(f) were reasonable.

He observed:

Indeed, We think it would be almost impossible to sustain any doctrine of the inviolability of contractual rights, in the context of the Welfare legislation, which has become so marked a characteristic of modern times. It is difficult to see how, if a legislature could enact that an exorbitant rate of interest could be struck down by a Court and the debtor relieved against this, notwithstanding the terms of a contract, it cannot validly enact that both a landlord and tenant may apply for the determination of fair rent for premises, though the contract may be subsisting. The same remarks would be applicable to many other restrictions upon property, imposed in numerous fields of human activity, which have been held to be reasonable...

The answer given to the reference by the Full Bench was:

The Madras Rent Control Acts, viewed, from any perspective, such as that of legislative competence, legislative intendment or the plain significance of the structure of the enactments, admits only of one interpretation; they interfere both with contractual and statutory tenancies, by affording a special protection to tenants against eviction, and also balancing this by certain corresponding obligations imposed on tenants....

Therefore, Act XVIII of 1960 including Act XI of 1964 are within the competence of the Legislature and validly passed, that none of them is liable to be struck down either on the ground of hostile discrimination under Article 14 or on the ground that there has been an unreasonable restrictions of fundamental right guaranteed under Article 19(1)(f) of the Constitution. Application has now been posted and argued before me for a final disposal, the prayer there in being for dismissal of E.P. No. 35 for vacant possession of the property in the possession of the applicant.

5. The basic contention of the applicant is that having regard to the definition of a ' tenant' in Act XVIII of 1960, he is not liable to be evicted or possession recovered from him even in view of the Amending Act XI of 1964; though a compromise decree has been passed against him. 'Tenant' as defined in Act XVIII of 1960 means any person by whom and on whose account rent is payable for a building and includes the surviving spouse, or any son, or daughter, or the legal representative of the deceased tenant who had been living with the tenant in the building as a member of the tenant's family upto the death of the tenant and a person continuing possession after the termination of the tenancy in his favour but does not include person placed in occupation of a building by its tenant or a person to whom the collection of rents or fees in a public market, cart-stand or slaughter house or of rent for shops has been farmed out or leased by a Municipal Council or the District Board or the Corporation of Madras. ' Rent' has not been defined in the Act and the use of this word is not conclusive of the matter that relation of landlord and tenant is created between the owner and occupier. In the legal sense, it may be used as recompense paid by the tenant to the landlord for the exclusive possession of the premises occupied by him; it may also be used in the generic sense without importing the legal significance aforesaid of compensation for the use and occupation. 'Rent' in the legal sense can only be reserved on a demise of immovable property. Hence the use of the term 'rent' cannot preclude the landlord from pleading that there is no relationship of landlord and tenant. The question must depend upon whether or not there is a relationship of landlord and tenant in the sense that there is a transfer of interest by the landlord in favour of the tenant vide H.S. Rikhy v. The New Delhi Municipality : [1962]3SCR604 . The question, therefore, is not so much whether the compensation paid by the person in occupation is termed 'rent' as whether the relationship of a landlord and tenant as construed by Courts vis-a-vis the Lease and Rent Control Legislation.

6. Sri Thiruvenkatachari for the respondent emphasised that what is payable by the applicant subsequent to the decree cannot be characterised as 'rent' but has to be construed as mesne profits defined in the Civil Procedure Code--Section 2(12)--as 'profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received therefrom, together with interest on such profits'. This circumstance again is not conclusive for the reason that if the applicant by reason of the aforesaid legislation can be deemed to be a statutory tenant, what is payable by him as mesne profits has, for that reason to be also construed as 'rent'.

7. A tenant in Act XVIII of 1960 is not liable to be evicted under Section 10 of the Act whether in execution of a decree or otherwise except in accordance with the provisions of the said section or Sections 14 to 16 which deal with recovery of possession by landlord for repairs or reconstruction, the tenant's right and the conditions under which he could reoccupy after repairs and his right to occupy the building if it is not demolished. It is not urged before me that the landlord in the present case, was entitled to enforce against the applicant any of the grounds set out in Sub-section (2) of Section 10. The argument is that C.S. No. 163 having been compromised and that what had been claimed from the applicant on the date of the suit as arrears and for the subsequent period was mesne profits and not rent, this is a case which is outside the scope of the provisions of the Rent Control Act. The definition of the 'tenant' in the Act already set out by me read with section to (1) of the Act which specified that a tenant shall not be evicted whether in execution of a decree or otherwise does not seem to justify this contention. In Sanjeeva Naidu v. Chittibabu Mudaliar (1953) 1 M.L.J. 260 a person coming into possession under a lease had set up title in himself as owner and the landlord on that ground had obtained a decree for ejectment. Rajamannar, C.J., speaking for the Bench held in the above case that the person in possession cannot be evicted in execution of the aforesaid decree as the defendant would be a tenant holding over entitled to rely on the provisions of the Madras Buildings (Lease and Rent Control) Act, 1949 except in accordance with the provisions of Section 7(1) of the Act which is now identical with Section 10 of Act XVIII of 1960. I may mention here that the definition of 'tenant' under the aforesaid Act is also identical. The learned Chief Justice referred to the general law in Section 111 of the Transfer of Property Act and held that the tenancy in favour of Chittibabu had been duly terminated; but he would still be a 'tenant' under the Rent Control Act who had continued in possession after the termination of the tenancy and must, therefore, be deemed to have continued in possession as a tenant; in other words, he would be a tenant holding over and under the general law, a tenant holding over is governed by the terms of the tenancy under which he came into occupation. The learned Chief Justice further pointed out that under Section 7(1), a person in possession of a building shall not be evicted therefrom whether before or after the termination of the tenancy whether in execution of a decree or otherwise except in accordance with the provisions of that section and this provision. is a complete answer to the execution petition filed by Sanjeevi for eviction.

8. A similar view was taken by the learned Chief Justice sitting with Ganapathia Pillai, J., in Thalaivadivu Anandar v. Venugoapala Chettiar : (1960)1MLJ356 . That was a case which. had come up in Letters Patent Appeal against the order of this Court in A.A.A.O. No. 130 of 1954 arising from an execution petition in the Munsif's Court, Thiruchirapalli. The view expressed by the learned Chief Justice in this case is that it is not correct to say that Section 7 of the Madras Buildings (Lease and Rent Control) Act would apply only to cases of decrees in ejectment passed after the coming into force of the Act. The section prohibits eviction of tenants in execution of decrees whether the same is made before or after the Act and whether the decree is based on a compromise or after contest. Where an execution petition is filed after the coming into force of the Act, the tenant could Invoke the protection under Section 7. It appears to have-been argued before the learned Judges that Section 7 would apply only to a decree passed in suits after the passing of the Act. This contention was not upheld by the learned Chief Justice, nor was he inclined to hold that the principle against the retrospective operation was offended in the case. He observed:

It is not as if during the pendency of E.P. No. 240 of 1954, out of which this appeal arises, that the Rent Control Act came to be extended to the suit village. By the date of the filing of the present execution petition that Act had come into force. The executing Court which was bound to apply the provisions in the statute, which had come into force even before the date of the execution petition which it was called upon to dispose of. In our opinion, there is no substance in the contention of the learned Counsel for the appellant.

Then, dealing with the argument that Section 7 would not apply to compromise decrees, the learned Chief Justice pointed out:

Once a decree is passed, we can see no difference on principle between a decree passed on a compromise and a decree passed after contest.

9. For the respondent, Sri Chari would urge that the definition of ' tenant' in Section 2(8) of the 1960 Act, second part, means a tenant continuing in possession under circumstances contemplated in Section 116 which deals with the effect of holding over and that was the basis of the decision in Sanjeeva Naidu's case (1953) 1 M.L.J. 260 and the principle laid down therein does not apply to a case, like the present, where the parties come to an agreement that the relationship shall not be that of landlord and tenant. In this context, Sri Chari referred to the first amendment of Section 30 by Act II of 1962 which had the effect of determining all rights and privileges which, may have accrued to any landlord by virtue of Clause (ii) or (iii) of Section 30 of the Principal Act in so far as they relate to a building or part thereof which is not exempt under the aforesaid clauses and made them unenforceable. Act XI of 1964 similarly determined the landlord's rights in respect of non-residential buildings and in consequence brought such buildings within the purview of Act XVIII of 1960. But the contention is that the compromise entered into in the present case between; the applicant and the respondent had come into force long before this Act, that a consent decree had been passed on such compromise, and therefore the applicant having ceased to be a tenant from that moment the subsequent Amending Act of 1964 cannot have the effect of restoring the relationship and that the transition-from a common law tenant to a statutory tenant cannot be taken advantage of by the applicant when actually there was no relationship of landlord and tenant. Sri Chari also drew my attention to the language of Section 3 of Act XI of 1964 and emphasized the words 'proceedings...pending' and 'instituted' and urged that what was intended by the amendment was that if proceedings in respect of any non-residential building was pending or instituted, they were to abate and in the present case, there was no such proceeding as the matter had already been surrendered as per the said compromise. The applicant was, according to him, therefore, in the position of a permissive occupant and not a tenant holding over. But in the case on hand, there was not only a decree by consent for eviction which would normally put an end to the tenancy and the relationship arising out of it; but the provisions of Section 3 of Act II being vague and meaningless, the same cannot apply in any event to cases after the decree. Sri Chari would thus make a distinction between cases which are pending and cases which have proceeded to decrees. This, however, is not possible to my mind if we read Section 10(1) and Section 19 together and as a result of Act XI of 1964, the limit on the basis of rent has been removed in respect of non-residential buildings. The question then arises whether Act XI of 1964 could be given retrospective effect. A Full Bench of the Punjab High Court held in Shamsunder v. Ramdas A.I.R. 1951 P.&H.; 52 that a statute, unless it be a statute dealing with procedure only, should not be construed as having retrospective effect unless the statute expressly makes its provisions retrospective or retrospective effect is given by necessary implication or intendment. The case before the Full Bench came under Delhi and Ajmer-Merwara Rent Control Act, 1947 and the question for consideration was whether Section 9(1) of the Act is retrospective in its operation. The Act prohibited all Courts from making any order evicting any tenant in execution of decree passed before or after that Act came into force. The learned Judges held that the expression ' makes any order in execution of a decree evicting any tenant', in Section 9(1) applies to the stage when execution of a decree for ejectment is sought by the decree holder and that the argument that in ejectment suits the order for eviction is made when the decree is passed and that no order of eviction is passed in execution proceedings does not receive support from what is contained in Order 7, Rule 1, Order 20, Rules 6 and 12, Order 21, Rule 35, Form No. 23 Appendix 6 and Form No. 11 Appendix E, Civil Procedure Code. The learned Judges further held that as Section 9(1) expressly governs transactions occurring before or after the commencement of the Act, Section 15 of the Act instead of preventing the application of Section 9(1) of the Act to the execution of decrees passed before the Act came into force is subject to the provisions of Section 9(1) of the Act .

10 In Shyamalal v. Umacharan : AIR1961MP49 (F.B.) a Full Bench of the Madhya Pradesh High Court, while emphasising that the protection afforded in Sections 4 and 17 of the Madhya Pradesh Accommodation Control Act, is to a tenant, held that a person whose tenancy has been determined but who continues to remain in possession of the tenanted premises without the assent of the landlord after the determination of the tenancy is a tenant for the purposes of the Act and is entitled to the benefit of Sections 4 and 17 of the Act. The question before the Full Bench was whether in a suit pending on the date of the commencement of the Madhya Pradesh Accommodation Control Act, a decree for eviction can be passed except on one or more of the grounds mentioned in Section 4(2) of the Act; whether a decree for eviction obtained before 1st January, 1959, can be executed against a tenant so long as the Act is in force except on any of the grounds mentioned in Section 4 and whether a person whose tenancy had come to an end before the commencement of the Act is a tenant for the purposes of the Act and can claim the protection given under the Act. Shiv Dayal, J., in his opinion emphasised that the protection afforded in Sections 4 and 17 is to a tenant. He observed:

In the strict legal sense of the term, a tenant is one whose tenancy subsists. In common parlance, however, a tenant who continues to occupy a tenanted premises in spite of the determination of the lease, is also called a tenant. It is then to be seen whether it was its strict meaning or popular meaning which was intended by the Legislature when they used the term ' tenant' in those sections. Section 4 opens thus: ' 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...' and in Clauses (a) to (n) those exceptional grounds are enumerated. There can be no doubt that Section 4 is not an enabling provision in the sense that a tenant can be ejected even without determining the lease. It is primarily a disabling provision, although in the circumstances provided in Clauses (a) to (n) the protection given to the tenant is withdrawn To put it differently this section imposes a restriction on the right of the landlord to eject his tenant, over and above those provided in the Transfer of Property Act. The section does not confer any new benefit on the landlord; nor does it enlarge his rights under the Transfer of Property Act.

The learned Judge further observed:

Section 17 further strengthens the interpretation of the word ' tenant' as to include ex-tenant. It reads thus:

17. In all suits for eviction of tenants from any accommodation pending on the date of the commencement of the Act, no decree for eviction shall be passed except on one or more of the grounds mentioned in Section 4 of the Act.

The clear language of Section 17 pre-supposes that in a suit which was pending on the day when the 1955 Act came into operation the lease must have been determined before the commencement of the Act, for the suit for eviction must have been brought after determining the lease. If tenant means only a tenant, his tenancy is subsisting, it is difficult to see for whose benefit Section 17 Was enacted. Retrospectively (sic.) of Section 17 makes it quite plain that its protections cannot be denied to a tenant whose lease was determined before the commencement of 1955 Act.

11. Section 10 of Act XVIII of 1960 goes a step further and prohibits eviction even in execution of a decree except in accordance with the provisions of the said section or Sections 14 to 16 and, therefore, if matters rested there alone, I should have agreed with the contentions of the learned Counsel for the applicant that the decree obtained against him cannot be enforced since 'proceedings' referred to in, Section 3 of Act XI of 1964 can apply both to pre-decree and post-decree proceedings including proceedings in execution by reason of Section 141, Civil Procedure Code. It seems to me, however, that in the present case, subsequent to the passing of the decree which was on a compromise--and that circumstances, as I stated, cannot, on principle, make any difference--there had been a surrender of part of the holding by the applicant's sub-tenant which, as regards the applicant, must be deemed to be on his behalf and thus there was a disruption of the entire holding. In the circumstances, he cannot be deemed to be a person continuing in possession after the termination of the tenancy in his favour and thus a statutory tenant within the meaning of Section 2(8) of Madras Act XVIII of 1960. If he is not such a tenant and that appears to be the position even on the date of the decree as by the terms of the compromise the portion in the occupation of Panachand was agreed to be taken delivery of by the decree-holder-respondent and the rest of the portion was held by him on sufference agreeing to pay mesne-profits at Rs. 1,340 per month for the period from 1st November, 1960 to 31st January, 1963 subject to his right to get credit for the amount already paid as per Court's order and future mesne-profits at Rs. 800 per month from 1st February, 1963, he cannot get relief as a tenant. In this view of the matter, the applicant is not entitled to rely on the 1964 Amendment of the Act when pursuant to the decree, Panachand's possession has already been recovered by the decree-holder. In the circumstances, therefore, I am inclined to hold that the applicant is not entitled to the relief prayed for by him, namely, the dismissal of E.P. No. 35 of 1964.

12. This application is, accordingly dismissed with costs. The applicant is given three months' time to surrender the portion in his possession.


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