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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • For the Appellant: P.V.R.Sharma, T.Veerabhadraiah, Advocates.
Judges
  • N.D Patnaik, J.
Acts
  • Hyderabad Act 20 of 1954. The Rent Control Act
  • provisions of Hyderabad Act, 20 of 1954.
  • Section 32(b) of the Rent Control Act,
  • section 32(b) of the Rent Contro Act
  • provisions of the Rent Control Act
  • provision of section 32(b)
  • Rent Control Act: 1960
  • Rent Control Act
  • section 32(b)
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • For the Appellant: P.V.R.Sharma, T.Veerabhadraiah, Advocates.
Judges
  • N.D Patnaik, J.
Acts
  • Hyderabad Act 20 of 1954. The Rent Control Act
  • provisions of Hyderabad Act, 20 of 1954.
  • Section 32(b) of the Rent Control Act,
  • section 32(b) of the Rent Contro Act
  • provisions of the Rent Control Act
  • provision of section 32(b)
  • Rent Control Act: 1960
  • Rent Control Act
  • section 32(b)
See more information ...
Smart Summary

Structured Summary of the Opinion — Second Appeal Concerning Jurisdiction and Rent Control Act

Factual and Procedural Background

Respondents 1 and 2 (the plaintiffs) filed OS No. 11/77 in the Court of the District Munsif, Kothagudem against the 1st defendant seeking eviction from a shop (the suit premises) and arrears of rent. The 2nd defendant was later impleaded. The 1st defendant died during the suit and his legal representatives became defendants 3 to 8. The suit was transferred to the Court of the Subordinate Judge, Kothagudem and renumbered OS No. 75/82.

The 4th defendant filed an appeal (this second appeal) against the judgment of the Additional District Judge, Khammam. At trial the defendants contended that the Civil Court had no jurisdiction because the premises were governed by the Rent Control Act; the trial court accepted that contention and held the Civil Court lacked jurisdiction. The Additional District Judge reversed on the jurisdiction point (holding the Rent Control Act provisions were not applicable to the premises in question) and ordered eviction within three months and Rs. 419-24 paise towards arrears for 1-1-1976 to 31-12-1976. The 4th defendant (appellant) brought the present second appeal, and the plaintiffs filed cross-objections aggrieved by the quantum of arrears allowed.

Legal Issues Presented

  1. Whether the Civil Court had jurisdiction to entertain the suit (i.e., whether the suit was maintainable in a Civil Court).
  2. Whether the Rent Control Act was applicable to the building in question (and thus whether the Civil Court was ousted of jurisdiction).
  3. Whether the subsequent quashing of clause (b) of Section 32 of the Rent Control Act (by the Supreme Court) affects the jurisdictional position in respect of a suit filed when that clause was in force.
  4. Whether the notice under Section 106 of the Transfer of Property Act (TP Act) terminating the tenancy was valid.

Arguments of the Parties

Appellant's / Defendants' Arguments

  • The Civil Court had no jurisdiction because the premises were governed by the Rent Control Act; the trial court accepted this view.
  • After the Supreme Court struck down Section 32(b) of the Rent Control Act as unconstitutional, that provision should be treated as void and therefore the plaintiffs cannot rely on that provision to claim the suit was properly in a Civil Court even though it was in force at the time of filing. The appellant relied on the effect of Article 13 and authorities saying a statute declared void is to be treated as non-existent.
  • The appellant also urged reconsideration of the single-judge decision (Lakshman Rao, J.) in S.A. Hakim Saheb v. P.V.K. Setty and asked for a Division Bench reference on the correctness of the principle followed there.

Plaintiffs' / Respondents' Arguments

  • The building was constructed in 1965, and under Section 32(b) (as it stood at the time of filing in 1977) buildings constructed on or after 26 August 1957 were exempted from the operation of the Rent Control Act; therefore the suit was properly instituted in the Civil Court.
  • Even though Section 32(b) was subsequently struck down by the Supreme Court, a vested right to sue had crystallised on the date of filing the suit (1977) and that vested right cannot be divested by the later quashing of the provision except by express statutory provision or necessary implication; pending proceedings should be completed according to the law in force when rights accrued and the proceedings commenced.
  • The notice under Section 106 TP Act (Ex. A-12) terminating the tenancy was valid because the lease commenced 1-11-1970 and after expiry of the initial 2-year period the tenancy became a month-to-month tenancy; the tenant was called upon to quit and hand over possession within the prescribed time.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Gundikota Kamalakar Rao v. Abida Begum (1) 1984 (1) ALT 218 Territorial applicability: Kothagudem area prior to the Rent Control Act was governed by Hyderabad Act 20 of 1954; notification No.15 dated 3-6-1955 included parts of Kothagudem under Hyderabad Act. The decision was considered in assessing whether the Rent Control Act applied to the Kothagudem notified area and which parts remained subject to the Rent Control Act.
Motor General Traders v. State of A.P. (2) (1984) 1 SCC 222 : AIR 1984 SC 121 The Supreme Court struck down Section 32(b) of the Rent Control Act as unconstitutional. The court acknowledged the quashing of Section 32(b) by the Supreme Court and considered the effect of that quashing on suits filed while the clause was in force.
S.A. Hakim Saheb v. P.V.K. Setty (3) 1989 (2) ALT 28 (Lakshman Rao, J.) Where a suit is filed when a statutory exemption is in force, the civil court had jurisdiction on the date of filing; subsequent quashing of the exemption does not divest the right already exercised. The court followed this reasoning and held that rights crystallise on the date of institution of the suit; since the suit was filed when Section 32(b) was in force, the suit was maintainable in the Civil Court.
Atma Ram v. Iswar Singh (4) (1988) 4 SCC 284 : AIR 1988 SC 2031 Principle that rights of parties crystallise on the date of institution of the suit; a meaningful construction is that an exemption available for a period continues until suit is disposed of or adjudicated. Cited to support the proposition that rights at the time of filing govern adjudication and that exemptions subsisting at filing operate until final disposal of the suit.
Om Prakash Gupta v. Dig Vijendrapal Gupta (1982) 1 SCC 626 : AIR 1982 SC 1230 Well-settled principle that rights of parties crystallise on the date of institution of the suit. Relied upon as authority for the proposition that adjudication must proceed according to the law as it stood when the suit was instituted.
R.K. Gupta v. Sartaj Karan (5) 1989 (1) APLJ 218 Where an exemption was in force when suit was filed but ended during pendency, the exemption would meaningfully continue until final disposal; parties governed by rights on the date of institution. The court used this to support the conclusion that the exemption operative at filing protects the suit's adjudication and the decree is not fettered by subsequent changes.
Nand Kishore v. Samundri Devi (6) (1987) 4 SCC 382 : AIR 1987 SC 2284 It is well settled that rights of parties will be determined on the basis of rights available on the date of the suit. Referred to in support of the rule that the law at the time of filing governs the rights and adjudication.
P. Neelakanteswara Raju v. J. Mangamma (7) AIR 1970 AP 1 (Full Bench) A jurisdiction once vested cannot be divested unless the legislature has expressly or by necessary intendment directed otherwise; Section 56 cannot have retrospective operation to divest civil court jurisdiction already seized. Cited to support the proposition that a civil court already seized of jurisdiction cannot be divested by subsequent provisions or proceedings; used to buttress the plaintiffs' position.
Behran Khurshid v. Bombay State (8) AIR 1955 SC 123 Once a statute is declared void under Article 13(1)/(2), that declaration has the force of law and the statute so declared is no longer law qua persons whose fundamental rights are infringed. Relied upon by the appellant to argue that the quashing of Section 32(b) means the provision is void and cannot be invoked even for past filings; the court considered this submission but ultimately rejected it for reasons set out in other authorities.
Lakshmi v. Narayanaswami (9) AIR 1963 Kerala 330 Once a statute is declared void under Article 13, that declaration has the force of law and the statute is no longer law for affected persons. Also relied on by the appellant to support the contention that a struck-down provision should be treated as non-existent; the court took note but placed greater weight on authorities about crystallisation of rights.
Munwar Khan v. Hyderabad State (10) AIR 1956 Hyderabad 22 (Full Bench) Pending proceedings should be completed according to the law applicable at the time when the rights and liabilities accrued and the proceedings commenced. Invoked by the plaintiffs to support that the suit filed in 1977 must be adjudicated according to the law in force then; the court accepted this position as part of its reasoning.
Ramjilal v. Income Tax Officer, Mohindargarh (11) AIR 1951 SC 97 Authority followed for the principle that pending proceedings are to be completed according to the law when rights accrued and proceedings commenced. Referred to in support of the above Full Bench authority and the general principle relied upon by the plaintiffs and the court.

Court's Reasoning and Analysis

The court began by identifying the central question — whether the Civil Court had jurisdiction to entertain the suit — which turns on whether the Rent Control Act applied to the premises at the date the suit was filed.

The court reviewed the findings at trial (which held that the Rent Control Act applied and that the Civil Court lacked jurisdiction) and at first appeal (which held the Rent Control Act provisions were not applicable to the premises and therefore the suit could be maintained in a Civil Court; the first appellate court also found the notice under Section 106 TP Act to be valid and granted eviction and specified arrears).

A key legal complication was that clause (b) of Section 32 of the Rent Control Act — the clause providing an exemption for buildings constructed on or after 26 August 1957 — had been struck down by the Supreme Court as unconstitutional. The court analysed competing lines of authority on the legal effect of a provision that was in force at the time a suit was instituted but subsequently declared void.

The court surveyed applicable authorities: it noted decisions (including the single-judge decision in S.A. Hakim Saheb v. P.V.K. Setty and Supreme Court decisions such as Atma Ram and Om Prakash Gupta) which establish the well-settled principle that the rights of the parties "crystallise" on the date of the institution of the suit and that proceedings instituted under the law in force at that time should be adjudicated according to that law. The court also considered Division Bench and Full Bench authorities (R.K. Gupta, Nand Kishore, P. Neelakanteswara Raju, Munwar Khan) to the same effect.

The appellant's contention based on Article 13 and authorities such as Behran Khurshid and Lakshmi v. Narayanaswami — that a provision struck down is to be treated as having never existed and therefore cannot support rights asserted earlier — was expressly considered. The court weighed this against the line of authorities emphasizing crystallisation of rights at the time of filing.

Applying those authorities, the court concluded that where a suit was instituted while an exemption (Section 32(b)) was in force, the rights of the parties are determined by the law as it stood on the filing date and such rights are not divested by the subsequent quashing of the exemption except by express statutory provision or by necessary implication. Consequently, because the plaintiffs had filed their suit in 1977 when Section 32(b) was operative, their right to proceed in a Civil Court vested and remained enforceable for adjudication.

The court also addressed the challenge to the validity of the notice under Section 106 TP Act. It accepted the lower appellate court's analysis: the lease began on 1-11-1970, the initial period expired, and in the absence of contrary contract the tenancy became monthly; Ex. A-12 was the terminating notice, and the notice was therefore valid.

Finally, on the question of arrears of rent, the court observed that the lower appellate court had reasoned about deductions and arrived at Rs. 419-24 paise. That determination was a finding of fact and, being so, was not open to interference in a second appeal.

Holding and Implications

Holding: Both the appeal and the cross-objections are dismissed.

Implications (direct consequences on the parties):

  • The suit is maintainable in the Civil Court because it was instituted in 1977 when Section 32(b) of the Rent Control Act (the exemption claimed) was in force; the court held that the rights of the parties crystallised on the date of filing and are to be adjudicated according to the law then in force.
  • The notice under Section 106 of the Transfer of Property Act was valid and the eviction decree of the lower appellate court stands (the Additional District Judge had ordered eviction within three months).
  • The plaintiffs are entitled to Rs. 419-24 paise as arrears of rent as determined by the lower appellate court; that factual conclusion is not interfered with in this second appeal.
  • No costs were awarded and the appellant was granted two months' time to vacate the premises.

Broader precedent impact: The court expressly followed and relied on authorities establishing the principle that rights crystallise on the filing date and that suits instituted under law then in force continue to be adjudicated according to that law. The opinion does not indicate the setting of any new legal precedent beyond applying these established principles.

Show full summary ...

    Morisetti Mohan Rao v. Tata Subbaiah & Others

    1. The question that is involved in this Second appeal is whether the Civil Court has got jurisdiction to entertain the suit.

    2. This appeal is filed by the 4th defendant in OS No. 75 of 1982 in the Court of the Subordinate Judge, Kothagudem. Respondents 1 and 2 filed a suit OS No. 11/77 in the Court of the District Munsif, Kothagudem against the 1st defendant for eviction from the suit premises and for arrears of rent. Subsequently the 2nd defendant was impleaded as a party. As the 1st defendant died during the pendency of the suit, his legal representatives were added as defendants 3 to 8. The suit was transferred to the Court of the Subordinate Judge Kathagudem and is numbered as OS No. 75/82. The suit premises consists of a shop. One of the contentions raised by the defendants is that the Civil Court has no jurisdiction because it is governed by the Rent Control Act. The trial court accepted the contention of the defendants and held that the building is constructed in the year 1965 and the period of 10 years granted by the Government was over even by the date of filing of the suit, the suit house is not exempted from the Rent Control Act and as such, the Civil Court has no jurisdiction to entertain the suit.

    3. The plaintiff preferred an appeal against the said judgment in AS No. 19/86 in the Court of the Additional District Judge, Khammam. The learned Additional District Judge, held that no notification extending the Rent Control Act to the Kothagudem which is a notified area was given and therefore, the provisions of the Rent Control Act are not applicable in respect of the premises in question and so the suit can be maintained in a Civil Court. He has negatived the other contention of the defendants that the notice under Section 106 of TP Act is not proper and ordered eviction of defendants within 3 months and also directed them to pay an amount of Rs. 419-24 ps. towards the arrears of rent from 1-1-1976 to 31-12-1976. The 4th respondent preferred the second appeal against the said judgment.

    4. The plaintiffs i.e respondents 1 and 2 have also filed cross-objections aggrieved by the judgment of the lower appellate court granting only Rs. 419-24 ps. towards arrears of rent.

    5. The main question which arises for consideration in this appeal is whether the Rent Control Act is applicable to the building in question.

    6. The trial court went on the basis that the period of 10 years of exemption granted by the Government under Section 26 of the Act has expired by the time of the filing of the suit. The lower appellate court took the view that there is no notification extending the Rent Control Act to Kothagudem notified area, in Gundikota Kamalakar Rao… v. Abida Begum…. (1) 1984 (1) ALT 218 it was held that Kothagudem area, prior to the Rent Control Act: 1960 was governed by the provisions of Hyderabad Act, 20 of 1954. By notification No. 15, dated 3-6-1955, the area included within the limits of Kothagudem was notified under Hyderabad Act 20 of 1954. The Rent Control Act continues to apply to that part of Kothagudem which is covered by the notification referred to above. Therefore, the learned counsel for the plaintiffs-respondents 1 and 2 had taken a different contention that under section 32(b) of the Rent Control Act, buildings constructed on or after 26th August, 1957 are exempted from the operation of the said Act and since the building in this case was constructed in the year 1965, it was not covered by the Rent Control Act by the time the suit was filed in the District Munsif's Court, Kothagudem in the year 1977 and therefore, the suit is maintainable in the Civil Court.

    7. The Supreme Court had struck down section 32(b) of the Rent Control Act as unconstitutional in the decision reported in Motor General Traders v. State of AP (2) (1984) 1 SCC 222 : AIR 1984 SC 121. In the decision reported in SA Hakim Saheb v. PVK Setty (3) 1989 (2) ALT 28 a learned single Judge of this Court, Lakshman Rao, J. held that “In the instant case, the suit was filed at the time when clause (b) of Section 32 was in force. On the date of filing of the suit, the Civil Court had the jurisdiction to entertain and dispose of the suit. It means that the right of the party to file a suit for eviction of the tenant has orystalised on the date of the institution of the suit. Such right, in my view, is not affected by the quashing of clause (b) of Section 32 subsequent to the filing of the suit. Apart from that once a right to file a suit which is vested in a party has been exercised, that party cannot be divested of that right except by express statutory provision or by necessary implication. No provision is brought to my notice which can be said to have taken away the right of the respondent to continue the suit. Therefore, I am unable to accept the contention of the learned counsel for the appellant that the Civil Court had no jurisdiction to try the suit after clause (b) of Section 32 was quashed as unconstitutional.”

    8. The learned counsel for the appellants has canvassed that the correctness of the view taken by Lakshman Rao, J. requires reconsideration and urged that the matter may be referred to a Division Bench.

    9. In the decision reported in SA Hakim Saheb v. PVK Setty (3) 1989 (2) ALT 28 Lakshman Rao, J. has followed a decision of the Supreme Court in Atma Ram v. Iswar Singh (4) (1988) 4 SCC 284 : AIR 1988 SC 2031 wherein it was observed;

    “In our opinion, bearing in mind the well-settled principles that the rights of the parties crystalise on the date of the institution of the suit as enunciated by this Court in Om Prakash Gupta v. Dig Vijendrapal Gupta. (1982) 1 SCC 626 : AIR 1982 SC 1230 (2), the meaningful construction must be that the exemption would apply for a period of 10 years and will continue to be available until suit is disposed of or adjudicated. Such suit or proceeding must be instituted within the stipulated period of 10 years. Once rights crystalise the adjudication must be in accordance with law.”

    10. In the decision reported in R.K Gupta v. Sartaj Karan (5) 1989 (1) APLJ 218, a Division Bench of this Court, held that the parties are governed by the rights which accrued to them on the date of the institution of the suit. The learned Judges were dealing with a case where the suit was filed when the 10 years exemption granted by the Government under Section 26 was in force, bu had come to an end during the pendency of the litigation. They held that the meaningful construction would therefore, be that exemption would apply for a period of 10 years and will continue to be available until the suit is disposed of or adjudicated finally and the decree passed in such a suit is free from the fetters of section 10. They have referred to the decision of the Supreme Court in Nand Kishore v. Samundri Devi (6) (1987) 4 SCC 382 : AIR 1987 SC 2284 in which the Supreme Court pointed out “It is well settled that the rights of the parties will be determined on the basis of the rights available to them on the date of the suit”. Relying on these decisions, the leared counsel for the plaintiffs contended that on the date of the filing of the suit, since section 32(b) was not struck down, this building was exempted from the operation of the Rent Control Act and so, only a civil suit could have been filed and since the suit was filed in the year 1977, the rights of the parties have crystalised according to the law then in force and so, that right cannot be taken away subsequently. section 32(b) was struck down by the Supreme Court. He has also referred to a Full Bench decision of the Andhra Pradesh High Court in P. Neelakanteswara Raju v. J. Mangamma (7) AIR 1970 AP I in which it was held:

    “A jurisdiction once vested cannot be divested unless the legislature has expressly or by necessary intendment directed otherwise. The object of sec. 56 is to prescribe an authority to settle a dispute of the kind referred to therein; and a dispute that is not already seized by some authority cannot be said to ‘arise’ and will arise only when steps are taken for having it adjudicated…………………

    Section 56 of the Act cannot have retrospective operation and a civil court cannot be divested, of its jurisdiction when it is already seized of jurisdiction to decide matters contemplated by sec. 56 of the Act. Where the plaintiff sues for recovery of possession and profits even after abolition of an estate, the civil court has jurisdiction to entertain a suit for such relief which cannot be given by the Settlement Officer under section 56 of the Act and the questions contemplated by section 56 of the Act can be incidentally by the civil court”.

    11. On the other hand, the learned counsel for the appellant sought to make a distinction between a law which has been struck down as unconstitutional and cases where the exemption granted from the purview of the Act have come to an end during the pendency of the litigation. His contention is that under Art. 13 of the Constitution, any law which is inconsistent with the provisions of the Constitution shall be void and since the Supreme Court had struck down sec. 32(b) on the ground that it contravenes Article 14 of the Constitution, the effect is that such a provision is void or non existing. He has referred to the decision of the Supreme Court in Behran Khurshid v. Bombay State (8) AIR 1955 SC 123 in which it is stated at page 146 (para 53) that once a statute is declared void under Article 13(1) or 13(2) by the Supreme Court that declaration has the force of law, and the statute so declared void is no longer law qua persons whose fundamental rights are thus infringed. He also referred to the decision of the Kerala High Court in Lakshmi v. Narayanaswami (9) AIR 1963 Kerala 330 in which it is held that “Once a statute is declared void under Article 13(1) or 13(2), that declaration has the force of law and the statute so declared void is no longer law qua persons whose fundamental reghts are thus infringed”. Thus, the post-Constitution laws which are inconsistent with the provisions of the Constitution must be considered to have never come to life but were still born as it were.” He has, therefore, contended that when once the Supreme Court has declared section 32(b) of the Rent Control Act as unconstitutional, the effect is that, that law/provision was never in existence. So, his contention is that even though the suit was filed in the year 1977 when that provision was in force, the plaintiffs cannot rely upon it after that provision has been struck down by the Supreme Court.

    12. The learned counsel for the plaintiffs i.e respondent 1 and 2 has argued that in this case, a vested right has been created in favour of the plaintiff when they filed the suit in the year 1977. To have their case adjudicated in accordance with law in force at that time, that right cannot be taken away even if the provision of section 32(b) is struck down subsequently. Lakshman Rao, J. who has rendered the decision in SA Hakim v. PVK Setty (3 supra) has also stated that “Apart from that, once a right to file a suit which is vested in a party has been exercised, that party cannot be divested of that right except by express statutory provision or by necessary implication.”

    13. The learned counsel for the plaintiffs has also referred to the Full Bench decision of Hyderabad High Court in Munwar Khan v. Hyderabad State (10) AIR 1956 Hyderabad 22 in which it is held that pending proceedings should be completed according to the law applicable at the time when the rights and liabilities accrued and the proceedings commenced following a decision of the Supreme Court in Ramjilal v. Income Tax Officer, Mohindargarh (11) AIR 1951 SC 97.

    14. The decisions which are referred to above have uniformly laid down the principle that when once the proceedings are instituted under the law which was in force, the rights of the parties are crystalised according to the law in force and the suit should be disposed of in accordance with the law which was inforce as on the date of the filing of the suit. Though section 32(b) of the Rent Contro Act was subsequently struck down as un-constitutional by the Supreme Court, since the plaintiff had already filed a suit in the year 1977, when the exemption granted under section 32(b) was in operation, the rights of the parties have been crystalised as on the date of the filing of the suit. Therefore I am not able to agree with the contention of the learned counsel for the appellant that the decision rendered by Lakshman Rao, J., in S.A Hakim Saheb v. P.V.K Setty (3 supra) requires reconsideration by the Division Bench. I agree with the reasoning given by the learned Judge that since the suit is filed when section 32(b) was in force, the suit is maintainable. Therefore I am unable to accept the contention of the learned counsel for the appellant that the suit is not maintainable in the Civil Court. Another contention that is taken is that the notice under section 106 of TP Act is not proper. As pointed out by the lower appellate court, the lease commenced on 1-11-1970 and ended after the expiry of 2 years and thereafter the tenant continued and in the absence of contract to the contrary, the tenancy is a monthly tenancy. Ex. A-12 is the notice issued terminating the tenancy. Therefore as it ends month to month and as the tenant was called upon to quit and handover the premises within 15 days from the date of the receipt of the notice on the expiration of the tenancy on 31-2-1976, the notice issued under section 106 TP Act is valid.

    15. The plaintiff has filed cross objections regarding a portion of the arrears of rent disallowed by the lower appellate court in paragraph 12. The lower appellate court considered about the arrears of rent and the deductions which have to be made and ultimately arrived at the figures Rs. 419-24 ps. to which the plaintiffs are entitled. This being a purely finding of fact, cannot be interfered within the second appeal. Therefore, both the appeal and Cross objections are dismissed. No costs. The appellant however, is granted two months time in order to enable them to vacate the premises.

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    Comments

    Morisetti Mohan Rao v. Tata Subbaiah & Others
    (Dec 9, 1991)