Devki Nandan Nagpal vs Silver Screen Enterprises

Mehar Singh, C.J.—The premises in dispute is a cinema let by the landlord to the tenant. An application was made u/s 13(2)(i) of the East Punjab Urban Rent Restriction Act, 1949 (East Punjab Act 3 of 1949), by the landlord for the ejectment of the tenant on the ground of non-payment of arrears of rent. The application was dismissed by the Rent Controller, and the landlord filed an appeal against the order of the Rent Controller u/s 15 of that Act.

In this High Court as between the same parties another litigation was pending with regard to the same cinema building, and the parties entered into a compromise putting an end not only to that litigation but also to other litigation between them including the litigation about the ejectment of the tenant from the cinema at the stage of the appeal before the Appellate Authority. A compromise was arrived at on January 7, 1964, and it said that the landlord shall withdraw the appeal pending before the Appellate Authority in his application for ejectment of the tenant, and that the tenant will withdraw his application, pending before the Rent Controller, for fixation of fair rent u/s 4 of the Act. The tenant withdrew his application which was of course then dismissed, but the landlord refused to withdraw the appeal before the Appellate Authority against the order of the Rent Controller dismissing his application for ejectment of the tenant. On that the tenant made an application before the Appellate Authority that the compromise between the parties be enforced and the appeal of the landlord be dismissed. The landlord raised a number of objections to that application. The Appellate Authority referred to clauses 12 and 13 of the compromise between the parties which read thus. "12. That in case the landlord does not carry out the terms of this compromise, he shall be held responsible for all the losses that the lessee may suffer because of its breach. 13. That in case, the lessee does not carry out the terms of this compromise, he shall be held responsible for all the losses that the landlord may suffer because of its breach." And the Appellate Authority was of the opinion that if there is some term of the contract of compromise between the parties which has not been carried out by the tenant, the landlord can seek damages under Clause 13, but that he was bound by the compromise in so far as it relates to the withdrawal of the appeal. So the Appellate Authority by its order of January 5, 1965, accepted the application of the tenant and finding that the compromise was lawfully entered into between the parties, he proceeded to dismiss the appeal of the landlord, leaving the parties to their own costs; and it is the landlord, who appeals against the order of the Appellate Authority.

There is just one argument urged by the learned Counsel on behalf of the landlord and that is that, although the landlord entered into the compromise upon which the tenant has relied, but that was an agreement to withdraw the appeal, and the landlord cannot be so to speak physically forced to present an application for withdrawal of the appeal and the Appellate Authority could not treat the Compromise between the parties, not arrived at before it, but in another forum, as an application for withdrawal of the appeal by the landlord. The learned Counsel presses that the landlord has a right to withdraw his appeal and the landlord may withdraw his appeal, but he cannot be forced to make an application for withdrawal of the appeal, nor could the Appellate Authority treat a document signed by him with the tenant in another forum as an application to it for withdrawal of the appeal of the landlord pending before it. The learned Counsel refers to Sub-section (3) of Section 15 of the Act which says that "the Appellate Authority shall decide the appeal after sending for the records of the case from the Controller and after giving the parties an opportunity of being heard and, if necessary, after making such further inquiry as it thinks fit either personally or through the Controller," and he con tends that the Appellate Authority must decide the appeal of the landlord on merits. The reply of the learned Counsel for the tenant is reliance upon Harikisan Vs. The State of Maharashtra and Others, , in which he says further an award in arbitration had been made, the parties having superseded the award by an agreement between themselves, their Lordships held them bound by such an agreement, and he urges that the parties to the present litigation are bound by the terms of the compromise arrived at by them in this Court on January 7, 1964.

The parties may be bound by the terms and conditions of the compromise arrived at by them in this Court on January 7, 1964, but even so the compromise does not amount to an application by the landlord before the Appellate Authority for the withdrawal of his appeal against the tenant. The landlord cannot be compelled to make such an application. The tenant cannot bring it to the notice of the Appellate Authority the compromise and ask the Appellate Authority that it should be treated as an application by the landlord for withdrawal of his appeal. While the landlord has a power and the right to withdraw his appeal and have it dismissed, he cannot be compelled to make an application for withdrawal of the same, nor a document executed by him somewhere else can be treated, not at his instance, but at the instance of the opposite party, as an application by the landlord for withdrawal of the appeal. The approach of the Appellate Authority that the landlord can have recourse to Clause 13 of the compromise because the tenant may have committed breach of the compromise is equally available against the tenant who can have recourse to Clause 12 of the compromise to have himself compensated by damages for any breach committed by the landlord for instance in his refusing to withdraw the appeal against the tenant before the Appellate Authority.

The Appellate Authority was not thus, from any angle, justified in reaching the conclusion that the compromise between the parties arrived at on January 7, 1964, is to be almost treated as an application for withdrawal of the appeal by the landlord. Further, even if the compromise could be treated as an application by the landlord for withdrawal of the appeal, the Appellate Authority could only take cognizance of it and proceed to act upon it if it was presented to it by the landlord and not on the fact of it having been brought to its notice by the tenant. The landlord has not taken any step to withdraw the appeal and so the Appellate Authority was wrong in dismissing his appeal. What are the consequences according to the terms of the compromise on the landlord not having withdrawn the appeal before the Appellate Authority in view of their compromise, is a matter which the parties can, if so advised, have settled in a proper forum. So the order of the Appellate Authority is set aside and the direction is that it shall re-enter the appeal of the landlord in its register of appeals and then set it down for hearing on merits at an early date. There is no order in regard to costs in this revision application.