All these three revisions were heard together and they arise out of judgment dated 31st of May, 2011 passed by the Judge, Small Causes Court/Additional District Judge, Court No.10, Kanpur Nagar in SCC Suit No.56 of 2004.
Revision No.327 of 2011 has been preferred by the tenant against his eviction decree, passed in favour of two landlords namely Rajendra Prasad Agrawal and Om Prakash Agrawal. It was treated as lead case by the learned counsel for the parties. The defendant tenant who has filed the above revision , hereinafter referred to as tenant and the plaintiff landlords hereinafter referred to as landlord No.1 Rajesh Prasad Agrawal and landlord no.2 Om Prakash Agrawal.
The property no.562 A, S.K. Building Rail Bazar situate just opposite to Kanpur Railway Junction, a three storeyed building is the subject matter of the dispute between the parties. Indisputably, the landlords are owners of the property in question. It consists of one big hall on ground floor, store and kitchen, twelve rooms on the first floor and one big hall on the second floor. In the year 1946 the said property was let out on a monthly rent of Rs.1,000/- to late Munshi Ram Kohali, father of the present tenant, by Kamta Prasad, the ancestors of landlords.
SCC suit No.56 of 2004 giving rise to these revisions was instituted by the landlord nos.1 and 2 against the tenant for eviction on the ground that the building in dispute was taken on rent for running a hotel business and it has been put to inconsistent user by opening a bar therein without consent of the landlord as envisaged in section 20(2) (d) of the U.P. Act No.13 of 1972.
The suit has been filed on the pleas inter alia that the tenant has paid the rent up to 31st December, 1979 and has deposited the rent in Court w.e.f. 1st of October, 1979 to 31st of December, 1979 in Misc. Case No.84/70 of 1980 and thereafter he has not paid any rent. The tenant has also started the hotel business in the accommodation in suit in the name and style of Central Hotel and also established a dormitory in the big hall by letting it out unauthorizedly without there being any permission by the landlords. The tenant has also started a bar by obtaining a bar licence. A legal notice dated 27.6.2004 was given. It was replied on 17th of July, 2004 on incorrect facts. It was further pleaded that arrears of rent w.e.f. 1st of September, 2001 to 2nd of August, 2004 amounting to Rs.35,064.50 is within time and the arrears of rent w.e.f. 1st of January, 1980 to 31st of August, 1981 being time barred is not being claimed.
By way of amendment in the plaint para 6A was added therein which provides that since the very inception of tenancy the defendant (tenant) is using and utilizing the entire accommodation in suit for hotel, restaurant and bar purposes. As per the government order of the State, hotel business shall be deemed to be a factory and as such is exempt from the operation of the U.P. Act No.13 of 1972.
The suit was contested by denying the plaint allegations but the relationship of landlord and tenant was admitted. The liability of water tax at the rate of 18 per cent was denied. In para 4 it was stated that no portion of tenanted accommodation is being used and utilized as dormitory, contrary to system of hotel business. The customers are permitted to stay one or two days. It was further stated that running of bar is not against public policy as the same is being done as per licence granted by the State of U.P.. The plea that the tenant is in arrears of rent was refuted by pleading that he has paid a sum of Rs.2,84,000/- to the Cantonment Board as per the notice issued under section65/257 of the Cantonment Act of 1924 beginning from 10th of June, 1980 to 15th of March, 2004 as detailed in para 10 of the written statement. It was further stated that the cantonment is realising water tax at the rate of 11.50 per cent and that the defendant(tenant) is entitled to seek protection of section 20(4) of the Act.
In the additional written statement, reply to para 6 A of the plaint has been given. It has been pleaded that in the notification issued by the State Government nowhere it provides that hotel business shall be deemed as factory for the purposes of the U.P. Act No.13 of 1972. In other words, the provisions of U.P. Act No.13 of 1972 are applicable.
On the basis of the pleadings of the parties, the trial Court framed four issues for determination, enumerated in the judgment.
The trial Court on issue no.1 has held that the provisions of U.P. Act No.13 of 1972 are applicable to the building in question and the notification relied upon by the landlords is not applicable so far as the provisions of the U.P. Act No.13 of 1972 are concerned. Under issue no.2, notice dated 27.6.2004 determining the tenancy was found valid. Under issue no.3, it came to the conclusion that the tenant has put the building to use for a purpose other than for which it was let out, without the written consent of the landlords and is therefore, liable for eviction. On this ground decree for eviction was passed. Under issue no.4 the trial Court in absence of any contrary evidence except the payment of taxes to the tune of Rs.2,84,000/- to the Cantonment Board by the tenant, held that the said amount shall be given set off towards the arrears of rent. On the first date of hearing the tenant has deposited Rs.80,000/-. The tenant has, thus, deposited Rs.8,069.30 in excess and therefore is entitled to get the benefit of section 20(4) of the Act. In other words, he was found in arrears of rent but he was relieved from eviction by extending the benefit as provided for in Section 20(4) of the Act. Therefore, the decree of eviction on the basis of default in payment of rent was not passed.
Challenging the aforesaid judgement and decree, primarily the finding returned under issue no.3, the revision no.327 of 2011 has been preferred by the tenant. The two landlords who were original plaintiff nos.1 and 2 filed separate revisions being revision nos.369 and 737 of 2011. The landlords have sought decree for eviction on the ground of subletting also. Certain documents by way of additional evidence were produced in the revisions by them to support the above plea of subletting.
All the three revisions were heard together.
Sri Ravi Kiran Jain, learned senior counsel along with Sri Vishnu Gupta appeared on behalf of the tenant, learned Senior Counsel Sri Zafer M. Naiyer along with Sayed Murtaza Ali appeared on behalf of Om Prakash Agrawal (landlord no.2) and Shri M.K. Gupta on behalf of the landlord no.1, Rajesh Prasad Agrawal.
Sri Ravi Kiran Jain, learned senior counsel for the tenant, submitted that the finding returned by the trial Court under issue no.3 legally and factually is incorrect. The various paragraphs of the plaint were referred by him to show that since the very inception, the property in dispute was let out for hotel purposes. Bar in the modern times is essentially part of hotel business. Opening a bar in a portion of the tenanted accommodation after obtaining licence from the concerned excise authority does not in any manner amount the change of user of the tenanted accommodation for a purpose other than it was let out, submits the counsel for the tenant.
In reply, Sri Zafer M. Naiyer, learned senior counsel and Sri M.K. Gupta, Advocates, supports the judgment and decree of the Court below and submitted that the landlords never agreed to run bar, restaurant etc. from the tenanted accommodation. The purpose of letting was hotel and hotel alone.
Considered the respective submissions of the learned counsel for the parties and perused the record. It is desirable to have a look to the pleadings of the parties in this regard. The plaint consists of only nine paragraphs and it appears that the relevant averments in this regard have been made in paragraphs 5 and 6A thereof. It may be placed on record that except the aforesaid two paragraphs none of the counsel for the parties invited the attention to any other portion of the plaint. For the sake of convenience, paragraphs 5 and 6A are reproduced below:-
"5. That the defendant, has also started a Bar by obtaining a Bar Licence which also opposed the Public Policy for which the plaintiff has already issued a notice dated 27.6.2004 through their counsel Sri H.R. Siddiqui, Advocate which notice was personally served upon the defendant on 3.7.2004. Not only this, the defendant has also replied the said notice through his counsel Sri Ajai Bhalla dated 17.7.2004 on the basis of untrue and incorrect facts.
6-A. That since the very inception of tenancy the defendant is using and utilizing the entire accommodation in suit for Hotel restaurant and bar purposes. As per Government Order of the State Hotel purpose shall be deemed to be a factory and as such is exempted from the operation of U.P. Act No.13 of 1972."
A reading of the paragraph no.5 would show that the landlord initially pleaded without specifying the date of commencement of starting of bar that the opening of bar is opposed to the public policy. Nothing more and nothing less has been said therein. In para 6A which was introduced through the amendment subsequently, the landlords have come out with the case that the tenant from very inception of tenancy is using and utilizing the entire accommodation in suit for hostel, restaurant and bar purposes. In the next sentence it has been added that in view of the government order, the State of U.P. has treated the hotel business as a factory, with which at the present moment we are not concerned.
Reading of plaint as a whole indicates that the accommodation in suit was let out for the hotel business.
Section 20 of the U.P. Act No.13 of 1972 in Chapter IV provides for regulation and eviction of tenant. Its sub section (1) says that no suit for eviction shall be instituted against a tenant from a building except on the grounds mentioned in sub section (2). The suit giving rise to the present revisions was apparently instituted on the ground mentioned in clause (d) of section 20(2) of the Act, which reads as follows:-
Section 20 (2) (d). "That the tenant 1[ has without the consent in writing of the landlord used it for a purpose other than the purpose for which he was admitted to the tenancy of the building or otherwise done any act which is inconsistent with such use], or has been convicted under any law for the time being in force of an offence of using the building or allowing it to be used for illegal or immoral purposes."
The above clause shows that a tenant will be liable for eviction if he has without the written consent of landlord used the tenanted building for a purpose other than the purpose for which it was let out or otherwise done any act which is inconsistent with such use etc. with which we are not concerned. The burden to prove for what purpose the building was let out initially and its change of user would obviously lie on such landlord. The landlord has to plead and prove the change of user of the tenanted accommodation. The relevant paragraphs from the plaint have already been reproduced above. To say the least in this regard, the pleadings are wholly vague and inadequate. It is neither pleaded nor proved as to for what purposes the property in question was let out. On the contrary, the newly added paragraph 6A has demolished the entire case of the landlords wherein it has been stated that the tenant from very inception is using and utilizing the entire accommodation in suit for hotel, restaurant and bar purposes. The said paragraph itself is complete reply to the landlords' claim. It is destructive to their claim for eviction under clause (d) of sub section (2) of section 20 of the Act.
Sri Ravi Kiran Jain, learned senior counsel for the tenant, referred the following cases in support of his argument that opening of bar in hotel business does not amount the change of user. In other words, the bar is a necessity of modern time in hotel industry. Running of bar is not alien to hotel business, rather it is incidental to this business. Existence of good hotel in a metropolitan city like Kanpur necessarily requires a bar for joyful and comfortable stay of its inmates, submits the learned counsel for the tenant. He has gone to the extent of submitting that a good hotel without bar, is beyond imagination in the present time. Be that as it may, as noticed herein above, in absence of necessary pleadings and proof of the essential conditions of clause (d) of sub section (2) of section 20 of the Act, the trial Court was not justified in passing a decree for eviction. The trial Court has proceeded in the matter on the footing that the tenanted accommodation was let out for hotel and restaurant business and on the own showing of tenant, he is using a portion of it as bar (selling liquor) and dormitory which is different from hotel and restaurant business and being without written consent of the landlords falls within the mischief of clause (d) of sub section (2) of section 20 of the Act. Tenant's senior counsel placed reliance upon a judgement of the Apex Court on Mohan Lal Vs. Jai Bhagwan, AIR 1998 SC 1034 in support of his submission that selling of liquor and running of dormitory is merely ancillary to the specific and original purpose of hotel and restaurant. Further reliance was placed on Gurdial Batra Vs. Raj Kumar Jain, AIR 1989 SC 1841, a case under the East Punjab Urban Rent Restriction Act where eviction on account of change of user was sought for, it has been held that in the let out premises running of cycle repair shop was permitted; later on, sale of television was also carried on temporarily along with the repair business, is not inconsistent user of the main object of letting for running of cycle repair shop. It has been further held that small changes of the user is not actionable when the landlord is not prejudiced.
Virendra Kumar Agrawal Vs. District Judge, Mirzapur (2001) ARC 393 was relied upon to show that putting up printing machine is not change of user when the letting was for operating stitching machine, rolling machine for making copies, file cover, boxes of sweetmeats etc..
The Apex Court in the case of Bharat Lal Baranwal Vs. Virendra Kumar Agarwal, (2003) 2 SCC 343, a case under the U.P. Act No.13 of 1972 interpreted section 20 (2) (d) thereof. It has been held that a building probably can be let out for three purposes namely residential, business and manufacturing. If the dominant purpose for which a building is let out is maintained a tenant may not become liable to be evicted. But if the building is let out for residential or business purposes and the tenant starts manufacturing activity or vice versa then it would amount to change of user subject to the provisions of the U.P. Act No.13 of 1972. The ratio laid down in the above case is fully applicable to the facts of the present case. Herein, the building was let out for hotel and restaurant purpose on the own showing of the landlords, which is business purpose, the opening of bar and dormitory will not amount in any manner the change of user of hotel and restaurant business. The activity of hotel and restaurant embraces the selling of liquor and dormitory. 'Dormitory' in common parlance means where sleeping cots are provided to several customers in a big hall and the big hall is allowed on common sharing basis. At any rate, such a provision cannot be said to be inconsistent, contrary or not in harmony with the hotel and restaurant business. The other case relied upon by the tenant namely DC Oswal Vs. V.K. Sabhaiya and others, 1992 SC and Full Bench Rent Cases is to the effect that if a landlord permitted a change of user for a long time, the implied permission for change in user of the premises may be inferred from his conduct.
As against the above, the learned counsel for the landlords could not place any material before this Court to take a different view of the matter. It is difficult to agree with the judgement of the trial Court holding that the tenant is liable for eviction for using the tenanted portion for the purposes other than the purpose for which it was let out as selling liquor and establishment of dormitory by the tenant has put the building in question for a purpose other than the purpose for which he was admitted to the tenancy of the building in question. The finding recorded by the trial Court on issue no.3, therefore, cannot be sustained and is hereby reserved. Consequently, the eviction decree being dependant on the said finding cannot be sustained and is liable to be reversed.
At this stage, both the counsel for the landlords No.1 and 2 submitted that the decree for eviction should be sustained on another ground available to them namely subletting of premises in dispute by the tenant to other persons, in the alternative.
Certain documents by way of additional evidence were also filed to show that the tenant has sublet a big hall to the hotel "Land Mark" owned and run by Soam Dutt Builders Limited, a company incorporated under the provisions of Indian Companies Act for consideration of Rs.21,565/- per month. The photostat copies of bills have been collectively filed as Annexure-SA 1 to the supplementary affidavit in civil revision No.327 of 2011 along with an application that the same may be considered as an integral part of the present case. Its reply has been given through an affidavit titled as "SCA" sworn on 17.1.2012. Paragraphs 5 and 6 which were referred to, are reproduced below:-
"5. That the contents of para-3 of the affidavit are totally false, incorrect and denied. It is totally false and incorrect that accommodation in question or any part thereof has been sublet to the hotel 'the Land Mark'. It is also totally false, incorrect and denied that the revisionist had no knowledge that the accommodation of the deponent's hotel is taken by customers including hotel 'the Land Mark' for its employees.
6. That the alleged demand bill filed as Annexure No.1 to the aforesaid supplementary affidavit disclosed that it relates to monthly rent. The bill has been raised for use of part of deponent's hotel by the employees of hotel 'the Land Mark'. It does not reflect either subletting or payment of rent and the documents filed as Annexure No.S.A-1 to the supplementary affidavit under reply have no bearing on the issues involved in the above revision."
The foremost question is whether at this stage of proceedings, the landlords can be permitted to raise a plea of subletting not raised before the trial Court. Shri Zafer M. Naiyer, learned senior counsel for the landlord, submitted that subletting is a thing which is entered into by a tenant in a clandestine manner. It is very difficult to collect the relevant evidence. Elaborating the argument, he submits that in view of the documentary evidence which could not be seriously disputed, the landlord should be permitted to raise the aforesaid plea. Refuting the above, the learned counsel for the tenant submits that there being no such pleadings at the earlier stage of proceedings, this Court while exercising the jurisdiction under section 25 of the Provincial Small Causes Court Act should not permit such a plea to be raised.
Coming to the pleadings of the parties, the plaint sans necessary averments with regard to the subletting. However, a feeble attempt was made by the landlord with the help of paragraph 4 of the plaint to substantiate the pleadings with regard to the sub tenancy. This was the solitary paragraph which he could refer and therefore, it is desirable to have a look to it. For the sake of convenience, the said paragraph is reproduced below:-
"4. That the defendant and prior to that his predecessors in interest had paid the rent of the accommodation in suit, the boundaries of which are given at the foot of this plaint, upto 31.12.1979 in view of the fact that the rent w.e.f. 1.10.1979 to 31.12.1979 was deposited by the defendant in the Court of Munsif City, Kanpur Nagar in Misc. Case No.84/70 of 1980 and thereafter the defendant has not paid rent to plaintiffs w.e.f. 1.1.1980. Not only this, the defendant has also started the Hotel business in the accommodation in suit in the name and style of Central Hotel and also has established a dormitory in the big hall by letting it for which the defendant was neither authorized nor empowered nor was given any permission in any manner whatsoever."
On a careful reading of paragraph reproduced above, it is difficult to find any such pleading with regard to subletting. The earlier portion of the said paragraph relates to deposit of rent by the tenant in Court and in the remaining thereof only this much has been stated that the tenant has also started the hotel business in the accommodation in suit in the name and style of Central Hotel and also established a dormitory in the big hall by letting it out for which tenant was never authorized nor empowered nor was given any permission in any manner in whatsoever. Two ingredients are required to be pleaded to establish subletting namely (1) parting of exclusive possession by the tenant to the alleged sub tenant and (2) receiving of rent from the alleged sub tenant by the tenant. None of the aforesaid ingredients find place in the aforesaid paragraph. In a hotel, letting of dormitory to customers is its very nature. There is no pleading of parting exclusive possession by the tenant. The subletting is a mixed question of fact and law. In absence of proper pleadings and evidence, it will not be proper to permit a person to raise a new issue beyond the scope of pleadings at the revisional stage specially. Suffice it to say that this Court is not inclined to investigate and record any finding on the question of subletting at this stage of proceeding and it shall be open to the landlords to raise it, if so advised, in a proper proceeding before a forum of competent jurisdiction.
Shri M.K. Gupta, learned counsel for the landlord no.2 then urged that the finding recorded by the trial Court on issue no.1 is not in accordance with law. To support his argument, reliance was placed upon a government order issued by the State Government. Attention of the Court was invited towards para 6A of the plaint. He submitted that in view of the fact that the State Government has declared hotel as tourism industry, the provisions of the U.P. Act No.13 of 1972 will not be applicable to the building in question. Section 2 of the Act provides that certain buildings are exempt from operation of Act. Clause (d) of section 2(1) states that nothing in this Act shall apply to any building used or intended to be used for any other industrial purpose (that is to say for the purposes of manufacture, preservation or processing of any goods). The hotel industry does not fall in any of these categories of industrial purposes and therefore, clause (d) would not be available to the landlords. Under clause (C)any building used or intended to be used as a factory within the meaning of Factories Act, 1948 where the plant of such factory is leased out along with the building is exempt. There being no such case of letting any plant to the tenant, the said clause would also not be applicable. In other words, the finding of trial Court holding that the provisions of the U.P. Act No.13 of 1972 are applicable and the building in question and the building is not exempt from operation of the Act under issue no.2, is perfectly justified and no interference is warranted. The above point raised in two revisions preferred by the landlords is meritless and is liable to be rejected and is hereby rejected.
Here is a case where the suit was validly instituted for ejectment of the defendant on two grounds and one of them is that the defendant tenant is in arrears of rent for a period more than four months, a fact which is not in dispute. On the contrary, the said fact is admitted by the defendant as per his pleading in the written statement. It has been referred above that the defendant-tenant was in arrears of rent since January, 1980 and failed to clear the arrears in spite of notice of demand which led the filing of suit for ejectment in the year 2004. The defendant-tenant cleared the arrears of rent etc. by making the deposit as required under section 20(4) of the Act. For the sake of convenience, the said section is reproduced below:-
" In any suit for eviction on the ground mentioned in clause (a) of sub-section (2), if at the first hearing of the suit the tenant unconditionally pays or [tenders to the landlord or deposits in court - substituted by U.P. Act No.28 of 1976. Originally, the words were, "tenders to the landlord."] the entire amount of rent and damages for use and occupation of the building due from him (such damages for use and occupation being calculated at the same rate as rent) together with interest thereon at the rate of nine percent per annum and the landlord costs of the suit in respect thereof, after deducting therefrom any amount already deposited by the tenant under sub-section (1) of Section 30, the court may, in lieu of passing a decree for eviction on that ground, pass an order relieving the tenant against his liability for eviction on that ground:
Provided that nothing in this sub-section shall apply in relation to a tenant who or any member of whose family has built or has otherwise acquired in a vacant state, or has got vacated after acquisition any residential building in the same city, municipality, notified area or town area.
[Explanation.-- For the purposes of this sub-section--
(a) the expression "first hearing" means the first date for any step or proceeding mentioned in the summons served on the defendant.
(b) the expression " cost of the suit" includes one-half of the amount of counsel's fee taxable for a contested suit.] The aforesaid section is akin to section 114 of the Transfer of Property Act. It grants another opportunity to such tenants to clear the arrears of rent etc. who are defaulters by making the requisite payment on the first date of hearing. The sub clause (4) of section 20 empowers the Court that it may, in lieu of passing a decree for eviction on the ground of default in payment of arrears of rent, pass an order relieving the tenant against his liability for eviction subject to fulfilment of conditions of section 20(4). The use of word 'may' is indicative of the fact that a discretion has been given to the Court to refuse the passing of an eviction decree. The words " Court may, in lieu of passing of a decree for eviction.................., pass an order relieving the tenant/lessee against his liability for eviction" used in section 114 of the Transfer of Property Act have also been used in sub clause (4) of section 20. The Apex Court had an occasion to interpret these words in Namdeo Lokman Lodhi Vs. Narmadabai and others, AIR 1953 SC 228, in connection with the question whether the tenant should have been given relief against forfeiture. In this case, the High Court had exercised the discretion not to give relief to the tenant against forfeiture as the tenant was a chronic defaulter and held that this was not a case for exercise of equitable jurisdiction. While affirming the decision of the High Court, the Apex Court has held that a discretion vests in the Court to grant relief against forfeiture to a tenant. The principal that a person who seeks equity must do equity was invoked and it has been laid down that each case must be adjudged by itself, delay, the conduct of the parties and the difficulties to which the landlord has been put should be weighed against the tenant." The relevant extract is quoted below:-
"In our opinion, in exercising the discretion, each case must be judged by itself, the delay, the conduct of the parties and the difficulties to which the landlord. has been put should be weighed against the tenant, This was the view taken by the Madras High Court in Appaya Shetty v. Mohammad Beari (2) , and the matter was discussed at some length. We agree with the ratio of that decision. It is a maxim of equity that a person who comes in equity must do equity and must come with clean hands and if the conduct of the tenant is such that it disentitles him to relief in equity, then the court's hands are not tied to exercise it in his favour. Reference in this connection may also be made to A.I.R. 1914 Mad. 706 (H), and A.I.R. 1928 Mad. 250 (v) Ramabrahmam v. Rami Reddi."
The argument that there no discretion vests in the court in such matters, was repelled.
In Hindustan Petroleum Corporation Ltd. Vs. Chandra Prakash Bubna and others, 1995 Suppl. (3) SCC 167 it has been laid down that section 114 is a discretionary relief based on equitable consideration. There may be cases where the tenant by its conduct may disentitle himself in seeking discretionary relief of section 114 of the T.P. Act. The relevant paragraph 7 is reproduced below:-
"As regards the application under section 114 of the Transfer of Property Act it is one of the settled principles that "law abhors forfeiture". However, Section 114 is a discretionary relief based on equitable consideration. Having regard to the above conduct of the tenant, the courts below had justified in its conclusion. In other words, the tenant by its conduct has disentitled itself in seeking the discretionary relief of section 114 of the Act. Therefore we see no scope for application of the ruling in R.S. Lala Praduman Kumar v. Virendra Goyal2. In the result the CA No.795 of 1993 will stand dismissed."
Section 20 (4) of the Act is a paramateria provision and akin to section 114 of the T.P. Act. The same principle will also be applicable herein. The material part of section 20(4) and 114 of the T.P. Act are worded identically which also lends support to the view that discretion vests in the Court not to relieve a tenant against his liability for eviction on the ground of default in payment of rent in appropriate cases. The yardstick to judge an appropriate case would be as laid down by the Apex Court, noted herein above, the conduct of tenant, delay and hardship to which the landlord was put.
Viewed as above, it would be clear that in the present case, the trial Court proceeded on the wrong assumption that as soon as the requisite deposit under section 20(4) has been made, the court has no option but to refuse passing of eviction a decree on that ground. Looked from this angle the order of the trial Court is vitiated for the reason that in the case on hand, the tenant has not paid the rent, admittedly, for the last more than two decades. He is enjoying the property on a paltry sum of Rs.1000/- which was fixed in the year 1946 and is earning many times more than that from the property in dispute on his own showing. On the attending facts and circumstances of the case, the rent @ Rs.1,000/- per month is not a meaningful rent. The reprehensible conduct of the tenant does not entitle him to get equitable relief from the Court but on the condition of enhancement of rent the relief, is being granted.
To exercise a discretion in favour of such tenant by relieving him against eviction decree, he must be put on terms to pay enhanced rent so that equities between the parties may be adjusted. Otherwise, the tenant's eviction decree cannot be sustained. Having regard to this established fact, the retrial of suit before the trial Court will only be redundant.
The next question which falls for determination is as to what order should be passed with regard to the rent/damages deposited under the interim order dated 3rd of August, 2011 and for future period. The order dated 3.8.2011 is reproduced below:-
"Heard Shri Vishnu Gupta, learned counsel for the applicant and Shri Zafar Nair, Learned Additional Advocate General along with Shri M.K.Gupta, for the respondent nos. 1 & 2.
Learned Additional Advocate General informs the Court that the accommodation in dispute is a big accommodation which consist of 12 rooms, 2 big halls and other accommodation situate in the heart of the city just opposite to Railway Station of Kanpur. A hotel is being run in the accommodation in dispute.
The submission is that the said property can easily fetch a sum of more than Rs. 1,00,000/- (Rupees one lac) per month as rent. There is no equity in favour of the applicant-tenant.
In contra, Shri Vishnu Gupta, learned counsel for the applicant-tenant submits that the tenant is prepared to enhance the rent/damages to a reasonable extent. The tenant will henceforth pay the damages @ Rs.75,000/- per month.
It may also be placed on record that the tenancy is of the year 1946 and the tenant was paying the rent @ 1000/- per month. Shri Gupta states that the applicant-tenant will pay the damages at the rate of Rs.75,000/- p.m, to save his eviction.
Taking into consideration the entire facts and circumstances of the case, the eviction decree against the applicant is stayed subject to fulfillment of the following conditions cumulatively:
i) Within one month from today, the applicant-tenant shall deposit the entire decreetal amount including arrears of rent and damages at the decreed rate before the trial court after adjusting the amount already deposited, for the period up to July 2011.
ii) The applicant-tenant shall pay the damages @ Rs.75,000/- per month, hence forth commencing from the month of August. The first deposit shall be made on or before 7th of September.
iii) The amount shall be paid by way of bank draft. If the landlords provide in writing the particulars of their bank account. The applicant-tenant is given liberty to deposit the amount in the said bank account on or before 7th of each month.
iv) The applicant tenant shall deposit the damages in the like manner for the subsequent months by 7th of each succeeding month.
In case of default in any of the conditions as stipulated above, the stay order shall stand vacated.
Three weeks time is granted to file counter affidavit. Two weeks thereafter for rejoinder affidavit.
List in the month of October 2011."
By way of interim order, the execution for decree of eviction was stayed subject to the condition of paying damages @ Rs.75,000/- per month instead of Rs.1000/- per month. It is not in dispute that the property in dispute was let out on the monthly rent of Rs.1000/- in the year 1946. Admittedly, the building in dispute is situate in metropolitan city, namely, Kanpur just opposite to Kanpur Railway Junction. A hotel, restaurant and bar are being run therein.
Sri Ravi Kiran Jain, learned senior counsel for the tenant submits that in the event, decree for eviction is set aside, the tenant would be liable to pay agreed rent only i.e. Rs.1000/- per month, manifold increase of the value of immovable properties notwithstanding. He distinguishes the judgment of the Apex Court given in the case of Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., (2005) 1 SCC 705 on the ground that in the said judgment, the Supreme Court was considering the terms on which stay order against eviction decree be passed. The observations made therein should be understood in that context. Strong reliance has been placed by him on State of Maharashtra versus Super Max International Pvt. Ltd. (2009) 9 SCC 772 and Sunita Rani and others versus Sri Chand and others (2009) 10 SCC 628. Reference was also made to another judgment in Niyas Ahmad Khan versus Mahmood Rahmat Ullah Khan and another (2008) 7 SCC 539.
Sri Jafar Nayyar and Sri M.K. Gupta, Advocates for the landlord, on the other hand, submit that this Court should take notice of the ground realities of life. The prices of immovable properties have skyrocketed during the last three decades. On the record, the evidence was placed to show manifold increase in the prices of immovable properties. Elaborating the argument, they submit that apart from the fact that due to population explosion, the prices of properties have been skyrocketed. Even if, the price of gold is taken as benchmark which was Rs.83 per gram in the year 1946 and compared with the current price, this Court should impose reasonable conditions while setting aside the eviction decree so that the landlord may get reasonable amount as rent by way of compensation for the use and occupation of the property in dispute. Sri M.K. Gupta has placed reliance upon two judgments one of this Court in Khursheeda v. A.D.J. 2004 (2) ARC 64 and of the Apex Court in Mohammad Ahmad and another versus Atma Ram Chauhan and others, (2011) 7 SCC 755.
In the case of Atma Ram Properties (P) Ltd. (supra) the appeal before the Apex Court was against an interim order granting stay, staying the eviction of the tenant during pendency of appeal before subordinate court. A question arose on what terms, in such matters, the appellate or revisional court should grant stay, staying the operation of eviction decree against a tenant. The court examined the matter and took note of the fact that in landlord tenants' matters, litigation goes on for unreasonable length of time and the tenants in possession of premises do not miss any opportunity of filing appeals or revisions so long as they can thereby afford to perpetuate the life of litigation and continue in occupation of the premises. The Court considered that the successful party at the end of litigation would be justified in demanding compensation and being placed in the same situation in which it would have been if the interim order would not have passed against it. In this scenario, it was held that landlord is not bound after passing of the eviction decree, by the contractual rate of rent. He is entitled to get the damages at the prevailing current rate. Sri Ravi Kiran Jain, learned senior counsel rightly points out that the observations therein should be understood in the context of the controversy involved therein i.e. while considering the question of interim application and different position would emerge if ultimately, the eviction decree is set aside by higher court exercising of the revisional or appellate jurisdiction.
In Niyas Ahmad Khan (supra), the eviction suit against the tenant was dismissed by the trial court and in pending appeal at the instance of landlord, the rent was enhanced from Rs.150/- per month to 12,050/- per month, was held unjustified. Relevant para-10 of the said judgment is reproduced below:
"To sum up, in writ petitions by landlord against rejection of eviction petitions, there is no scope for issue of any interim direction to the tenant to pay higher rent. But in writ petitions by tenants against grant of eviction, the High Court may, as a condition of stay, direct the tenant to pay higher rent during the pendency of the writ petition. This again is subject to two limitations. First, the condition should be reasonable. Second, there should not be any bar in the respective State rent control legislation in regard to such increase in rent. Be that as it may."
The aforesaid decisions were considered by the Apex Court in State of Maharashtra versus Super Max International Pvt. Ltd. (supra), heavily relied upon by the learned senior counsel for the tenant. Reference in particular was made to two paragraphs 46 & 48. For ready reference, paras 46 and 48 are reproduced below:
"46. In light of the discussions made above we hold that in an appeal or revision preferred by a tenant against a order or decree of an eviction passed under the Rent Act it is open to the appellate or the revisional Court to stay the execution of the order or the decree on terms, including a direction to pay monthly rent at a rate higher than the contractual rent. Needless to say that in fixing the amount subject to payment of which the execution of the order/ decree is stayed, the Court would exercise restraint and would not fix any excessive, fanciful or punitive amount.
47. ............................................................
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48. Before concluding the decision one more question needs to be addressed: what would be the position if the tenant's appeal/revision is allowed and the eviction decree is set aside? In that event, naturally, the status quo ante would be restored and the tenant would be entitled to get back all the amounts that he was made to pay in excess of the contractual rent. That being the position, the amount fixed by the court over and above the contractual monthly rent, ordinarily, should not be directed to be paid to the landlord during the pendency of the appeal/revision. The deposited amount, along with the accrued interest, should only be paid after the final disposal to either side depending upon the result of the case. In case for some reason the Court finds it just and expedient that the amount fixed by it should go to the landlord even while the matter is pending, it must be careful to direct payment to the landlord on terms so that in case the final decision goes in favour of the tenant the payment should be made to him without any undue delay or complications."
Learned counsel for the landlord has placed strong reliance on Khursheeda v. A.D.J. (supra). The judgment of the Khursheeda v. A.D.J. has been followed in subsequent case in Narendra Pal Singh vs. Ilam Chand Sharma, 2008 (3) ARC 808. This was the writ petition at the instance of landlord. Therein, the judgment of the Apex Court in M.V. Acharya v. State of Maharashtra, AIR 1998 SC 602 has been considered. This Court has held that frozen rents coupled with difficulty in seeking eviction of the tenant is driving the landlords to frustration. It took note of the fact that in many cases, the tenants are very old and rents were fixed a few decades ago. These old and frozen rents bear little relation to the present day maintenance costs, or to the current returns from alternative investments, or to the prevailing market rents in respect of new accommodation. The underline idea is that in a given case, if the tenanted building is fetching a very normal rent which is no rent as a matter of fact, the Court can adjust the equities between the parties by enhancing the rent to a reasonable extent.
In a very recent decision of the Apex Court in Mohammad Ahmad and another (supra), the Supreme Court has noticed that majority of these cases are filed because the landlords do not get reasonable rent akin to market rent, then on one ground or the other litigation is initiated. They have fixed some guidelines and norms for such type of litigation, so as to minimize landlord-tenant litigation at all levels. These are as follows:
" (i) The tenant must enhance the rent according to the terms of the agreement at least by ten percent, after every three years and enhanced rent should then be made payable to the landlord. If the rent is too low (in comparison to market rent), having been fixed almost 20 to 25 years back then the present market rate should be worked out either on the basis of valuation report or reliable estimates of building rentals in the surrounding areas, let out on rent recently.
(ii) Apart from the rental, property tax, water tax, maintenance charges, electricity charges for the actual consumption of the tenanted premises and for common area shall be payable by the tenant only so that the landlord gets the actual rent out of which nothing would be deductible. In case there is enhancement in property tax, water tax or maintenance charges, electricity charges then the same shall also be borne by the tenant only.
(iii) The usual maintenance of the premises, except major repairs would be carried out by the tenant only and the same would not be reimbursable by the landlord.
(iv) But if any major repairs are required to be carried out then in that case only after obtaining permission from the landlord in writing, the same shall be carried out and modalities with regard to adjustment of the amount spent thereon, would have to be worked out between the parties.
(v) If present and prevalent market rent assessed and fixed between the parties is paid by the tenant then landlord shall not be entitled to bring any action for his eviction against such a tenant at least for a period of 5 years. Thus for a period of 5 years the tenant shall enjoy immunity from being evicted from the premises.
(vi) The parties shall be at liberty to get the rental fixed by the official valuer or by any other agency, having expertise in the matter.
(vii) The rent so fixed should be just, proper and adequate, keeping in mind, location, type of construction, accessibility with the main road, parking space facilities available therein etc. Care ought to be taken that it does not end up being a bonanza for the landlord."
In the present case, the Court is faced with a situation when in view of the decision of State of Maharashtra versus Super Max International Pvt. Ltd. (supra) it has been laid down that status quo ante would be restored and the tenant would be entitled to get back all the amounts that he was made to pay in excess of the contractual rent the even in the eviction suit fails. There are cases that the Court may enhance the rent to a reasonable limit in the case of very old tenancy like the present one.
The matter has come up before this Court in revision filed under Section 25 of the Provincial Small Causes Court Act. The exercise of revisional jurisdiction is discretionary. Meaning thereby, even if, an order passed by the trial court is wrong, certain amount of discretion vests in the Court to refuse to entertain the revision if substantial justice has been done to the parties.
Coming to the facts of the present case, it may be noted that the interim order referred to above directing the tenant to deposit the damages at Rs.75,000/- per month was passed on the agreement of the learned counsel for the parties. However, an application being Modification Application No. 226035 of 2011 subsequent thereto was filed on behalf of the tenant stating that instead of Rs.75,000/- per month it was understood by the tenant as Rs.25,000/- per month. The tenant has stated that on 3rd August, 2011 when the case was taken up, he could not understand the amount of damages that may be paid by him to the respondent and gave his consent with the understanding that the amount of rent being offered is Rs.25,000/- per month vide para3 of the affidavit. The said paragraph is reproduced below:
"That on 3.8.2011 when the above case was taken up before this Hon'ble Court, the deponent could not understand the amount of damages that may be paid by the deponent to the respondents and gave his consent with the understanding that the amount of rent being offered is Rs.25,000/- per month."
The Court instead of going into that question as suggested by the learned counsel for the parties, proceeded to decide the revision finally. During pendency of the revision, the parties also brought on record valuers report of M/s S.S. Dash & Associates (Engineers, Valuers, Surveyors). The said report was filed on behalf of the tenant, who has described the property as double storied building part of ground floor (covered area 128.0 sq.mt.) as well as first floor (covered area 530.0 sq.mt.) are in possession of the tenant and part from that there exist one room (covered area 5.0 sq.mt.) on terrace floor. Total covered area has been taken 663.0 sq.mt. By adopting land and building method, value of tenanted land has been estimated at Rs.47,24,000/- and cost of construction at Rs.53,04,000/- and thereafter, depreciation was allowed on construction to the extent of Rs.41,37,120/- and has been valued at Rs.11,67,000/-.
The tenant in para-9 of the supplementary rejoinder affidavit, has stated that as per above registered Valuer's Report, monthly rent comes to Rs.41,000/-. (The figure of 41,000/- appears to be wrong instead it should be 49,000/-. The said figure can be obtained by taking 10% of the valuation of the property i.e. 5,89,000/- divided by 12 which comes to 49,000/-). This is own case of the tenant. As against above, the landlord's valuer report suggests rental value of the disputed property is Rs.1,22,000/-. The area of ground floor wherein Bar and Restaurant are running, has been taken as 127.30 sq.mt., the areas of first floor wherein rooms, toilets, halls are situated, has been taken as 532.50 sq.mt. and the areas of second floor wherein rooms and store are situated, has been taken as 18.60 sq.mt. Total area is 678.40 sq.mt. As per the D.M. rate list fixed for determination of rental value of property of railway colony are being used for hotel purpose situated on 18.28 m. wide road = Rs.180/- per sq.mt. per month. There appears to be vast different in the report of two valuers but for the purposes of the case, let the report of the tenant's valuer for the time being may be taken on its face value. In other words, on own showing of the tenant, the property would fetch Rs.49,000/- per month.
Reference was made by Sri M.K. Gupta to the gold price with the help of chart made available by the Association of Bullion Dealers in Bombay. Price of 10 gm. of gold as per chart in the year 1946 was around Rs.83/- and at present time, it is around Rs.27,000/- per ten gram. Thus, there is increase of about 325 times in the price of gold since the year 1946. If the price of gold is considered as benchmark, the rent would be around Rs.3,25,000/- per month. Admittedly, the tenant is running bar, restaurant besides the hotel business in the property in dispute. By no stretch of imagination, it can be said that he is paying a reasonable amount of rent. It is the case where landlords have been virtually deprived of their property for all time to come on a nominal rent which is no rent in actual terms. The Court cannot shut eyes to the fact that the tenant is getting monthly rent of Rs.5,335/- towards Room No. 2. A sum of Rs.6,615/- for new dormitory per month and Rs.9,615/- for another dormitory total comes to Rs.21,565/- besides the income from running bar and restaurant and hotel. The above referred bills relate to the month of July, 2011. They have been brought on record by way of supplementary affidavit and correctness and genuineness of those bills were not disputed by the tenant.
Para-10 of the written statement has also been reproduced in para-11 of the affidavit of the defendant filed under Order 18 Rule 4 of C.P.C. would show that the defendant-tenant has paid a sum of Rs.6000/- annually towards tax in the account of the landlord to the cantonment board. Resultantly, the landlord is getting a sum of Rs.6000/- per annum.
The aim and object of enactment of tenancy legislation is to protect a tenant from unscrupulous landlord. The necessity for such enactment was felt after the second world war. There was shortage of accommodation and rise in price as after effect of the war. To protect the tenants who represented the weaker section of society, an ordinance was passed and thereafter U.P. Act No. 3 of 1947 was passed which has been replaced by the present U.P. Act No. 13 of 1972. It would be travesty of justice to permit the profiteering by a tenant at the cost of landlord by pegging the rent at contractual rate. There has been a sea change in this situation in the last five decades. In a case where a tenant is well off and is earning huge income and the tenanted property is ideally situate as the present one, the interest of justice would be served by asking the tenant as a condition to save his eviction to pay the rent which according to his own showing is payable, notwithstanding that the current rent is much more. The Court cannot loose sight of the fact that there has been gradual increase in the rent and value of the property but the tenant continued to pay the rent at the fixed rate. In the present case, there is no equity in favour of the tenant as he was not paying even the said meager amount of rent and was in arrears of since January, 1980. By virtue of sub clause (4) of Section 20 of the Act, determination of tenancy on the ground of non payment of rent has been saved.
In D.C. Oswal v. V.K. Subbiah and others, AIR 1992 SC 184, the Apex Court while allowing the appeal of tenant and dismissed the decree for eviction has observed that 'judicial' notice can be taken of the fact that rental value has escalated everywhere and appropriate rent in the present case should be raised to Rs.400/- per month from. The tenant should have a direction to pay the rent in advance from month to month as stated by him. On similar lines, there is another decision in Ansuyaben Kantilal Bhatt v. Rashiklal Manilal Shah and another, AIR 1997 SC 2510, the Apex Court took note of the prevailing market rent. In FGP Ltd. v. Saleh Hooseini Doctor & another, JT 2009 (12) SC 210, a case under the Transfer of Property Act, taking note of the fact that a tenant is paying a meagre sum of Rs.900/- per month and has permitted the flat to be occupied by total outsider, refused to entertain the petition under Article 136 of the Constitution. Paragraphs 61 & 62 are reproduced below:
"61. As against all these facts when we find that the Suit is for reasonable requirement and was filed by the grandchildren of the testatrix, this Court, in our judgment, should not exercise its discretionary jurisdiction by interfering with the eviction proceeding which culminated in the revisional order of the High Court.
62. Reference in this connection be made to a decision of this Court in Balvantrai Chimanlal Trivedi, Manager, Raipur Mafg. Co. Ltd. Ahmedabad Vs. M.N. Nagrashna and Ors. [AIR 1960 SC 407]. In para 5 at page 408 of the said report, a three-Judge Bench of this Court posed a question whether this Court should interfere under Article 136 of the Constitution and when in the facts of the case there is no failure of justice. The question has been answered by this Court as follows:
"5. The question then arises whether we should interfere in our jurisdiction under Article 136 of the Constitution, when we are satisfied that there was no failure of justice. In similar circumstances, this Court refused to interfere and did not go into the question of jurisdiction on the ground that this Court could refuse interference unless it was satisfied that the justice of the case required it; see: A.M. Allison Vs. B.L. Sen (1957) SCR 359: ((S) AIR 1957 SC 227). On a parity of reasoning we are of the opinion that as we are not satisfied that the justice of the case requires interference in the circumstances, we should refuse to interfere with the order of the High Court dismissing the writ petition of the appellant."
In Shakuntala Bai & Ors. V. Narayan Das & Ors. JT 2004 (Suppl.1) SC 538, in para-15, the following observations have been made:
"There is no warrant for interpreting a Rent Control legislation in such a manner the basic object of which is to save harassment of tenants from unscrupulous landlords. The object is not to deprive the owners of their properties for all times to come."
In Malpe Vishwanath Acharya v. State of Maharashtra, (1998) 2 SCC 1, the Apex Court has laid down that when there is shortage of accommodation it is desirable, nay, necessary that some protection should be given to the tenants in order to ensure that they are not exploited. At the same time such a law has to be revised periodically so as to ensure that a disproportionately larger benefit than the one which was intended is not given to the tenants. In Satyawati Sharma v. Union of India and another, (2008) 5 SCC 287, in para-12, the Apex Court has noticed that the recent trend of Court while interpreting the rent control legislations. It is appropriate to reproduce para-12 from the said judgment:
"Before proceeding further we consider it necessary to observe that there has been a definite shift in the Court's approach while interpreting the rent control legislations. An analysis of the judgments of 1950s' to early 1990s' would indicate that in majority of cases the courts heavily leaned in favour of an interpretation which would benefit the tenant Mohinder Kumar and Others vs. State of Haryana and Another [1985 (4) SCC 221], Prabhakaran Nair and Others vs. State of Tamil Nadu and Others (supra), D.C. Bhatia and Others vs. Union of India and Another [1995 (1) SCC 104] and C.N. Rudramurthy vs. K. Barkathulla Khan [1998 (8) SCC 275]. In these and others case, the Court consistently held that the paramount object of every Rent Control Legislation is to provide safeguards for tenants against exploitation by landlords who seek to take undue advantage of the pressing need for accommodation of a large number of people looking for a house on rent for residence or business in the background of acute scarcity thereof. However, a different trend is clearly discernible in the latter judgments."
The upshot of above discussions is that the Apex Court has laid down from time to time that in a given case, the Court while exercising appellate or revisional jurisdiction may enhance the rent while setting aside the decree for eviction. The Court has also laid down that the enhancement of rent should not be unreasonable or penal. In the case on hand, care has been taken to fix rent as per own showing of the tenant. Even in the case of Super Max International Pvt. Ltd. (supra), strongly relied by the learned counsel for the tenant, there was enhancement of rent from Rs.5236.58/- per month besides water charges @ Rs.515.35 per month to Rs.5,40,000/- per month, which was not disturbed by the Apex Court.
Viewed as above, I find that there is no equity in favour of the tenant. It would be travesty of justice if in the case on hand, the argument of the learned senior counsel for the applicant that the tenant should be asked to pay contractual rent is accepted. In the peculiar facts of the case, the interest of justice would be served by directing the tenant to pay the future rent @ Rs.49,000/- per month henceforth confirming of the eviction decree instead. The amount which was paid towards damages by the tenant under the stay order shall stand adjusted towards the rent for those months and will not in any manner, adjustable towards any other period.
In view of the above discussions, the Civil Revision no. 327 of 2011, Ashwani Kumar Kohli v. Rajesh Prasad Agrawal and another is allowed and eviction decree is set aside subject to the aforesaid condition of payment of rent henceforth @ Rs.49,000/- per month. It is further provided that provisions of U.P. Act No. 13 of 1972 shall continue to apply on the building in question for a period of five years in terms of the conditions laid down by the Apex Court in the case of Mohammad Ahmad and another (supra). The tenant shall enjoy immunity from being evicted from the premises for a period of five years.
The Civil Revision nos. 369 of 2011 and 373 of 2011 filed by the landlord are disposed of in terms of order passed in Civil Revision no. 327 of 2011.
In view of the divided success of the parties, no order as to costs.
(Prakash Krishna, J.) Order Date :- 15.05.2012 LBY