Moolchand Gupta vs The Madras Piecegoods Merchants Charitable Trust by Secretary V.S. Devanathan

Kunhamed Kutti, J.—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. The suit C. S.

163 of 1962, by the plaintiff-respondent was for vacant possession of door No. 184-186 China Bazar 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.

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-S. (2) of S. 3 of the Central Act XXX of 1952 and, therefore, the relief prayed

in E. P. 35 of 1964 was limited against the judgment-debtor-applicant in respect of the portion in his occupation. Mean-while, Act XI of 1964

which had the effect of a hating certain pending proceedings as a result of certain amendments to the Madras Buildings (lease-and-Rent Control)

Act 1960, had come in to force and it omitted Cl. 3 of S. 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 mere than Rs. 400 also came within the purview

of the Act.

In 1963, one Raval and Co. had filed a writ petition 79 L.W. 331 (F.B.) 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 on this reference, while dealing with the

point urged by the learned Counsel for the applicant stated inter alia that the wording of S. 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 Cl. (iii) of S. 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 Art. 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. 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 Act 19 and equally so, Act XI of 1964. There 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 land owner by Art. 19 (1) (f) were reasonable. He observed.

Indeed, we think it would be alters impossible to sustain any doctrine of the (sic) liability of contractual rights, in the control 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 land cord and tenant may apply for the determination In 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 Art. 14 or on the ground that there has been an unreasonable

restriction of fundamental right guaranteed under Art. 19 (1) (f) of the Constitution. Application has now been posted and argued before me for a

final disposal, the prayer therein being for dismissal of E. P. 35 for vacant possession of the property in the possession of the applicant.

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 where account rent is payable for a building and includes the surviving

spouse, or any son, or daughter, on 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 in possession after the termination of the tenancy in his favour, but does

not include a person placed in occupation of a building by its tenants or a person to whom the collection of rents or fees in a public market, cart

stand or slaughter house or of rents 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. New Delhi Municipality AIR 1962 S.C. 564. 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.

Sri Thiruvcnkatachari 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 CPC - S. 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 at ""rent"".

A tenant in Act XVIII of 1960 is not liable to be evicted under S. 10 of the Act, whether in execution of a decree or otherwise except in

accordance with the provisions of the said section or Ss. 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 re-occupy after repairs (sic) his right to occupy the building if it is not (sic) had. It is not

urged before me that the (sic) in the present case, was entitled to (sic) against the applicant any of the (sic) set out in Sub-S. (2) of S. 10. The (sic)

is that C. S. 163 having been com-(sic) 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 S. 10 (1) of the Act which specifies that a tenant shall not be evicted whether in execution of a

decree or otherwise does not seem to justify this contention. In Sanjeevi 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 S. 7 (1) of the Act, which is now identical with S. 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 S. 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 S. 7 (1), a person in persuasion of a building shall

not be evicted there from 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 (sic) filed by Sanjeevi for eviction.

A similar view was taken by the learned (sic) Justice sitting with Ganapathia Pillai, J in Pena Parayan Ambalam Vs. Venkatachalam Chettiar

and Others, . That was a case which hid come up in Letters Patent Appeal against the order of this Court in A.A.A.O. 130 of 1954, arising from

an execution petition in the Munsif''s Court, Tiruchirapalli. The view expressed by the learned Chief Justice in this case is that it is not correct to say

that S. 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 ill 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 S. 7. It appears to have been argued before the learned Judges that S. 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 1964, 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 the Act had come into force. The executing Court which was bound to apply

the provisions in the statute, 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 S. 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 and contest.

For the respondent, Sri Chari would urge that the definition of ''tenant'' in S. 2(8) of the 1960 Act, second part, means argument continuing in

possession under circumstances contemplated in S. 116 which deals with the effect of holding over and that was the (sic) of the decision in

Sanjeevi Naidu''s case (1953) 1 M.L.J. 260 and the principle laid down therein does not clearly to a case, like the present, were the (sic) come to

an agreement that the real ownership shall not be that of landlord and tenant. In this context, Sri Chari referred to the first amendment of S. 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 Cl. (ii) or (iii) of S.

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 right in respect of nonresidential 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 S. 3 of Act XI of 1964 and emphasised the

words ""proceeding...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 compromised between the respondent and the applicant and indeed, portion of the leased property 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 S. 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 S. 10 (1) and S. 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 Shyamlal Lachman Vs. Umacharan Ramdulare Tiwari, ), 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 comes under Delhi and Ajmer Merwara Rent Control Act, 1947 and the question for

consideration was whether S. 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 the Act came into force. The learned Judges held that the expression ""makes any order in

execution of a decree evicting any tenant"", in S. 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 O. 7, R. 1, O. 20 Rr. 6 and 12, O. 21, R. 35, Order 21 Rule 35 Form

No. 23 Appendix 6 and Form No. 11 Appendix E, C. P. Code. The learned Judges further held that as S. 9 (1) expressly governs transactions

occurring before or after the commencement of the Act, S. 15 of the Act instead of preventing the application of S. 9 (1) of the Act to the

execution of decrees passed before the Act came into force is subject to the provisions of S. 9 (1) of the Act.

In Shyamlal v. Umacharan AIR 1951 PUNJ. 52 (F.B.), a Full Bench of the Madhya Pradesh High Court, while emphasising that the

protection afforded in Ss. 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 Ss. 4 and 17 of the Act. The question before the Full Bench was

whether in a suit pending en 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 S. 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 s. 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, expressed that the protection afforded in Ss. 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. S. 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.......''in Cls. (a) to (n) those

exceptional grounds are enumerated. There can be no doubt that S. 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-

Sec. 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 S. 4 of the Act.'' The clear language of S. 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, Box the suit for eviction must have been brought

after determining the lease. If tenant (sic) only a tenant, his tenancy is subsisting. It is difficult to see for whose benefit S. 17 was enacted.

Retrospectively (sic) of S. 17 makes it dint plain that its protections cannot be denied to a tenant whose lease was determined before the

commencement of 1955 Act.

Sec. 10 of Act XVIII of 1960 goes a stop further and prohibits eviction even in execution of a decree except in accordance with the

provisions of the said section or Ss. 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 ''proceeding'' referred to in S. 3 of Act XI of 1964 can

apply both to pre decree and post decree proceedings including proceedings in execution by reason of S. 141, C. P. C. It seems to me, however,

that in the present case, subsequent to the passing of the decree which was on a compromise and that circumstance, 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 S. 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 sufferance agreeing to pay mesne profits at Rs. 1340 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 as 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

pursue 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 dispersal of E. P. No. 35 of 1964. This application is accordingly

dismissed with costs. The applicant is given 3 month''s time to surrender the portion in his possession.