Autar Singh vs Sohan Lal

S.M. Fazl Ali, C.J.—This is a revision application against an order passed by the District Judge Jammu in a Rent Control matter. The facts

giving rise to the present revision may be summarised as follows.

The petitioner Autar Singh was a lessee of a shop in Bazar Babrian Jammu from one Sohan Lal at a fixed rent of Rs. 9 per month. Subsequently

on being persuaded by the landlord, the petitioner executed a rent deed in his favour enhancing the rent to Rs. 35 per month. The petitioner then

applied to the Rent Controller Jammu on 23-10-1962 for fixation of fair rent. In this proceeding, however, the parties arrived at a compromise and

an agreed rent of Rs. 25 per month was fixed as fair rent for the premises. Thereafter the petitioner continued paying rent at the agreed rate. On

30-10-1964 the petitioner made Anr. application to the Rent Controller for refixation of fair rent. This application was resisted by the landlord

firstly on the ground that the application was barred by the principle of res judicata and secondly on the ground that having agreed to pay a

particular rent the petitioner was estopped from asking the Controller to reassess the rent The petitioner, however, contended before the

Controller that as the previous order was passed on the basis of the agreement of the parties and the Court did not go into the various factors

mentioned in Section 8(1) of the Act, there was no estoppel against the express provisions of the statute. The Rent Controller, however, overruled

the plea of the petitioner and held that the rent already fixed could not be disturbed. The petitioner then went up in appeal to the District Judge who

upheld the order of the Rent Controller and dismissed the appeal.

The civil revision application was In the first instance heard by a Division Bench, which referred it to a Full Bench in view of a substantial

question of law of great public importance being involved in the case.

The point that has been canvassed before us is as to whether or not the order of the Rent Controller dated 6-11-1962 by which an agreed rent

was fixed by the Controller would operate as an estoppel against the petitioner in the instant case. The learned Counsel for the petitioner submitted

that Section 8(a) provides in express terms that the Court should take into consideration several factors before fixing rent and even if the parties

agreed to an order being passed, that will not prevent the Court from complying with the requirements of the law. It was further argued that at any

rate even if the petitioner had given his tacit consent to the previous order there could be no estoppel against statute. In support of this contention

the learned Counsel for the petitioner relied upon a decision of the Supreme Court in Waman Shriniwas Kini Vs. Ratilal Bhagwandas and Co., and

submitted that this decision overrules some of the cases relied upon by the learned District Judge.

Before, however, we go into this question it will be necessary to examine the scope and ambit of Section 8 of the Houses and Shops Rent Control

Act Section 8 runs as under--

In any of the following cases the Controller shall, on application by any landlord or tenant, fix the fair rent as set forth hereunder--

(a) Where the provisions of Sch. A apply and there is no cause for the alteration of the rate of fair rent as determined according to the schedule for

any of the reasons mentioned in the following uses in accordance with the provisions Sch. A.

(a) Where during the currency of fair (sic) payable for any house or shop there (sic) been an increase in the Municipal (sic) rates or cesses in

respect of the (sic) or shop by adding to it the amount such increase as is payable by the landlord by agreement with the tenant (sic) and above

what is payable by the landlord himself under the local Municipal (sic) law.

(b) Where during the currency of a fair (sic) payable for any house or shop the landlord has made some addition, (sic) or improvement in the house

or shop, (sic) being tenantable repairs necessary or (sic) for such house or shop, by adding (sic) such fair (sic) payable in one year ten (sic) centum

of the amount reasonably spent the landlord in making the said (sic) alteration or improvements, the (sic) amount being divided amongst

installments for payment of rent of the year would be just and convenient.

(c) Provided that when the house or shop (sic) occupation of a tenant at the time (sic) said addition, alteration or (sic), the additional rent shall not

be (sic) from such tenant, unless such (sic), alteration or improvement has (sic) made at the written request of the (sic).

(d) Where during the currency of fair (sic) the landlord has supplied any furniture for use of the tenant in the house or (sic) by adding to such fair

rent payable one year ten percentum of the price of said furniture as on the day they are supplied, the added amount being divided amongst

instalments for payment of (sic) of the year as would be just and (sic).

(e) Excepting the case covered by Clause (f) (sic) the provisions of Sch. A for determining the fair rent do not apply, either (sic) the house or shop

or the whole the house or shop was not let during 12 months prior to 1st Baisakh, 1998, for some other reasons, or where any house or shop has

been let rent free or normal rent, or for some consideration (sic) than money rent, or in addition to (sic) rent, by fixing the fair rent at a (sic) in

accordance with Sch. A, taking the (sic) which would have been reasonably able for the house or the shop if let Basic rent' under the said

schedule.

(f) Where any house or shop has been (sic) or substantially constructed after last day of Chet 2005, by fixing the rent payable for one year at a

rate less than 4 percentum and not more then six percentum of the reasonable cost (sic) construction added to the reasonable (sic) of the land,

included In the house or shop, as on the day of the commence (sic) of such construction, taking into account the prevailing rate of rent in the

locality for similar accommodation, with similar advantages and amenities and the comparative advantages or disadvantages of accommodation in

the house or shop.

Provided that where the house or shop in respect of which fair rent is to be fixed form a part of the construction, the fair rent shall be fixed at a rate

which is fairly proportionate to the total fair rent of the entire construction.

(g) Where no provisions of this Act for fixing fair rent apply to any premises, by determining the fair rent at a rate which is fair and reasonable.

(2) If, in fixing the fair rent, the Controller is required by this Act to determine (sic) during the 12 months prior to 1st Baisakh, 1998, but it is not

reasonably practicable to obtain sufficient evidence for determining the said rent, he shall determine approximately the rent, at which in reasonable

probability the house or shop was let on the date and the rent so determined shall be deemed to be the rent at which the premises were let during

12 months prior to 1st Baisakh 1998 and for the said purpose he may have regard to the fair rents of similar houses or shops in the

neighbourhood, and may make presumptions either against the landlord or the tenant who, in his opinion, is in a position to produce relevant

evidence but is refraining from doing it.

The section no doubt prescribes a particular mode and sets out a detailed standard for fixing fair rent of a house or shop taking into

consideration various factors, for instance, the price of the land included in the house, the date of construction etc. There is, however, no provision

which either impliedly or expressly prohibits the parties from fixing a fair, rent by agreement, nor do these provisions prevent the Controller from

giving effect to such an agreement. In these circumstances it seems to us that the doctrine of estoppel against Statute cannot be called into aid in the

instant case. Furthermore, what has happened in the present case is that the parties by agreeing to a compromise and asking the Court to fix fair

rent in terms of their agreement dissuaded It from discharging its statutory obligations in following the procedure laid down in Sub-clauses (a) to (f)

of Section 8 (Supra). Not only this, but it is manifest that the Court could have considered various circumstances mentioned in sub-clauses (a) to

(g) of Section 8 only if the parties had produced relevant evidence before it. Where the parties did not head any evidence on any of the factors

mentioned in Section 8, but asked the Court to pass an order in terms of their agreement, such a conduct of the parties clearly operates as an

estoppel.

In Pulavarthi Venkata Subba Rao and Others Vs. Valluri Jagannadha Rao and Others, their Lordships of the Supreme Court held that a decree

based on a compromise creates estoppel by conduct. In this connection their Lordships while describing the nature of a compromise decree

observed as follows:

The compromise decree was not a decision by the Court It was the acceptance by the Court of something to which the parties had agreed. It has

been said that a compromise decree merely sets the seal of the Court on the agreement of the parties. The Court did not decide anything. Nor can

it be said that a decision of the.

Court was implicit in it.

* * * * *

The decree might have created an estoppel by conduct between the parties.

Their Lordships of the Supreme Court in that case pointed out that even though the principle of res judicata could not be attracted because the

law was amended after the previous order, yet their Lordships recognized that a decree might create an estoppel by conduct between the parties.

In our opinion once the agreement merged into the order of the Court, it was not an agreement simpliciter, but an agreement to which was super-

added the command of the Court. Thus it was not a case where the parties by a bilateral agreement sought to contract out of the statutory

provisions of the Act as happened in Waman Shriniwas Kini Vs. Ratilal Bhagwandas and Co., In that case it appears that under the agreement of

lease the landlord had permitted the tenant to sublet"" the premises but the statute, namely, the Bombay Rents, Hotel and Lodging House Rates

Control Act (57 of 1947) expressly prohibited any sub-letting by the tenant. Their Lordships held that in view of the express prohibition the

agreement stood overruled and it was not open to the tenant to sublet the premises. Their Lordships further held that since the prohibition

contained in the Act was not only meant for the protection of the landlord or the tenant but was in public interest the principle of Waiver of

Statutory rights could not be called into operation in this connection their Lordships observed as follows in that case:

There is thus a manifest distinction between this case where the plaintiff asked the Court to afford him a remedy against one who by contravening

Section 15 of the Act has made himself liable to eviction and those cases where the Court was called upon to assist the plaintiff in enforcing an

agreement the object of which was to do an illegal act The respondent Is only seeking to enforce his right under the statute and the appellant

cannot be permitted to assert In a Court of justice any right founded upon or growing out of an illegal transaction: Gibbs and Sterrett

Manufacturing Co. v. Brucker (1884) 111 US 597 . In our opinion Section 15 of the Act is based on public policy and it has been held that if

public policy demands it even an equal participant in the illegality is allowed relief by way of restitution or rescission, though not on the contract.

* * * * *

Assuming that to be so, and proceeding on the facts found in this case the plea of waiver cannot be raised because as a result of giving effect to

that plea the Court would be enforcing an illegal agreement and thus contravene the statutory provisions of Section 15 based on public policy and

produce the very result which the statute prohibits and makes illegal.

* * * * *

In the instant case the question is not merely of waiver of statutory rights enacted for the benefit of an individual but whether the Court would aid

the appellant in enforcing a term of the agreement which Section 15 of the Act declares to be illegal.

This case is clearly distinguishable from the facts of the present case. To begin with, the first distinction lies in the fact that in the present case the

statutory provision as quoted above does not constitute an express prohibition against fixation of fair rent by consent of the parties. Secondly the

provision, if at all, is meant purely for the benefit of the tenant in order to protect him from greedy landlords who taking advantage of the helpless

position of tenants charge exorbitant rents. The various sub-clauses of Section 8 are inserted in order to achieve this statutory end. No question of

public interest is at all involved in making these provisions. Finally in the present case the agreement of the parties had merged into an order of the

Court which by the conduct of the parties had been dissuaded from performing its statutory obligations. Thus the order fixing an agreed rent would

operate as a clear estoppel by conduct against the petitioner.

We are fortified in our view by a decision of the Bombay High Court in Popatlal Ratansey Vs. Kalidas Bhavan, where in similar circumstances

fixation of fair rent by consent of the parties was upheld. In that case their Lordships observed as follows:

Standard rent cannot be a constant figure. Standard rent depends upon circumstances, and as circumstances change, the standard rent would also

vary. There can be no immutability about it. Besides the tenant having once given the Court to understand to the satisfaction of the Court, that he

considered the rent proposed by the landlord during trial or appeal to be a just and reasonable standard rent which was acceptable to him and

having invited the Court to decide the question accordingly and incorporate the decision in its decree, it would not be open to him to say

subsequently, as between the same parties and in respect of the same premises, that the previous decision of the Court would not bind him,"" (See

page 4 of the Reports).

These observations apply precisely to the facts of the instant case. In fact if we allow the petitioner to reagitate the question of rent after having

agreed to get the same fixed by the Court, it will run against the well-known principle that a person cannot be allowed to approbate and reprobate

at the same time. In AIR 1933 167 (Privy Council) their Lordships of the Privy Council while citing an earlier case observed as follows:

It is a well accepted principle that a party cannot both approbate and reprobate. He cannot, to use the words of Honeyman, J. in Smith v. Baker,

8 C.P. 350, at the same time blow hot and cold. He cannot say at one time that the transaction is valid and thereby obtain some advantage to

which he could only be entitled on the footing that it is valid, and at Anr. say it is void for the purpose of securing some further advantage'.

In Vas Dev Sharma Vs. Milkhi Ram Bhatia, Grover, J., took almost the same view in similar circumstances and held that where in a decree for

ejectment the tenant agreed to vacate and admitted the fact that the landlord was entitled to possession, a consent decree could be validly passed

even if there was no evidence to show the existence of personal necessity. Grover, J., pointed out that in such cases the conduct of the tenant in

agreeing to be evicted amounted to a clear admission of the facts pleaded by the landlord. The same view has been taken by one of us (Bhat, J.) in

1963 KLJ 133 : (AIR 1963 J & K 59). In that case Bhat, J. pointed out that where the tenant agrees to vacate the premises the Court had no

option but to pass a decree for eviction. Indeed if the Court refuses to pass a decree for eviction a most anomalous situation would arise. For

instance A, a landlord brings a suit for eviction against B, his tenant on the ground of personal necessity Before A gives his evidence. B enters into

a compromise with him agreeing to vacate the premises. In such cases it cannot be argued with any show of force that a decree should not be

passed unless the statutory provisions of personal necessity are satisfied. The tenant may say 'I walk out today; let the landlord do what he likes'.

Thus the Court cannot force the tenant to remain in the premises. In such cases a compromise decree can always be passed, because the provision

is purely for the benefit of the tenant and if the tenant is ready to waive the benefit there can be no objection to the Court in passing a compromise

decree. The same view was taken in a later decision of this Court in 1964 Kash LJ 176 : AIR 1966 J & K 22.

A Full Bench of the Allahabad High Court took the same view as we have taken in the present case, in an application for fixation of fair rent. In

Daulat Ram Sawhney Vs. Trilokinath, their Lordships observed as follows:

The second part of the question is whether there could be a valid and enforceable agreement of fixation of rent in respect of any accommodation

before an allotment order is passed in .... respect of the said accommodation under the provision of the U.P. (Temporary) Control of Rent and

Eviction Act.

* * * * *

We have examined the language of Section 7 of the U.P. (Temporary) Control of Rent and Eviction Act and we have found in it no prohibition to

an agreement for fixation of rent between landlord and a person who may later become a tenant under the provisions of that section, being arrived

at prior to the order of allotment.

* * * * *

In fact neither in the U.P. (Temporary) Control of Rent and Eviction Act, nor in the rules framed under that Act, nor in any orders made by the

District Magistrate of Mathura under the provisions of that Act which have been brought to our notice, is there any prohibition against an

agreement for fixation of rent between any landlord and his tenant. The only provision about agreement for fixation of rent between a landlord and

a tenant in the U.P. (Temporary) Control of Rent and Eviction Act is contained in Section 5(1) and that only lays down that if there is an agreement

the rent shall be payable in accordance with that agreement.

As against these authorities, the only case taking a contrary view cited before us was that of a single judge of the Punjab High Court in

Niranjan Singh, S. Inder Singh Vs. Murti Shri Bhagwan Ram, For the reasons that we have already given we respectfully express our dissent from

the view taken by Bhandari, J. in the case.

Reliance was also placed on Mayor Aldermen and Citizens of Norwich v. Norwich Electric Tramways Co. (1906) 2 KB 119 at page 126

where Vaughan-Williams L.J. observed as follows:

It appears to me therefore, that the legislature having to the interests of the public provided that disputes of the kiwi mentioned in the section shall

be determined by an expert nominated by the Board of Trade, the contention that there was a waiver of that provision so as to give Jurisdiction to

the High Court is not open to the plaintiffs. The same considerations appear to me to apply to the argument that there was something in the nature

of an estoppel, which indeed was not very seriously pressed upon us.

The decision of the King's Bench Division is clearly distinguishable on the ground that there the Court held that the statutory provision was not

merely for the benefit of the party but was in public interest. In other words the King's Bench Division has taken the same view as the Supreme

Court in the case (Supra).

Thus after a careful consideration of the authorities the following propositions emerge:

In cases where there is a statutory provision for the benefit of a party, the same can be waived and the parties can contract out of the statute by

entering into a compromise only in the following circumstances:

(1) Where there is no express prohibition or clear inhibition forbidding the contract so that a breach of the statutory provisions may amount to a

patent illegality. In such cases no amount of agreement can be used to neutralize the effect of an express provision engrafted by the Statute.

(2) Where the statutory provision is purely personal to the party concerned and meant for his benefit and Is not in public interest it follows that

where there is a statutory provision which is not for the personal benefit or protection of a party alone but is also in public interest, the parties

cannot be allowed to contravene such a statutory provision. We are fortified in our view by the following observations made In Volume 92 of

Corpus Juris Secundum at pp. 1066-68:

The doctrine of waiver extends to rights and privileges of any character, and, since the word 'waiver' covers every conceivable right, it is the

general rule that a person may waive any matter which affects his property, and any alienable right or privilege of which he is the owner or which

belongs to him or to which he is legally entitled, whether secured by contract, conferred by statute, or guaranteed by Constitution, provided such

rights and privileges rest in the Individual, are intended for his sole benefit, do not infringe on the rights of Ors. and further provided the waiver of

the right or privilege is not forbidden by law, and does not contravene public policy, and the principle Is recognized that everyone has a right to

waive, and agree to waive, that advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity, if it

can be dispensed with and relinquished without infringement on any public right, and without detriment to the community at large. Whether the right

relinquished is of great or little value does not affect the capacity of its owner to relinquish it.

We respectfully agree with the observations made above and which in our opinion correctly lays down the law of waiver on the subject.

Lastly we are of the view that as the petitioner by agreeing to a particular rent to be fixed as fair rent did not choose to adduce any evidence

before the Controller nor allowed the respondent to adduce any such evidence, in the eye of law, the order fixing fair rent must be deemed to have

taken into consideration the factors mentioned in Section 8 and it was on this ground also a valid order.

For the reasons given above, we hold that the learned District Judge took the right view in thinking that the tenant was estopped from

reagitating the question of fixation of fair rent. The application is therefore, dismissed with costs.

J.N. Bhat, J.

I agree.

Anant Singh, J.

I agree.