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Smart Summary

Factual and Procedural Background

This revision under section 15(5) of the East Punjab Urban Rent Restriction Act, 1949, challenges the judgment of the Appellate Authority, Kangra at Dharamsala, which upheld the Rent Controller’s decision dismissing the landlord Behari Lal’s application for ejectment of the tenant Ajudhia Das. The landlord alleged that the tenant had not paid rent since 28th May 1958, owed Rs. 1620 as arrears, had partitioned the shop without consent, and materially impaired the value and utility of the premises. The tenant admitted some arrears but claimed the landlord refused rent payments and tendered the assessed arrears with interest and costs in court. The landlord withdrew the ejectment ground based on non-payment of rent. The Rent Controller framed issues regarding partition and impairment and dismissed the ejectment application. The landlord appealed, which was also dismissed, leading to this revision.

Legal Issues Presented

  1. Whether the payment of arrears tendered by the tenant on the first hearing was valid and unconditional for the purposes of section 13(2)(i) of the Act.
  2. Whether the Rent Controller was obligated to independently ascertain the actual arrears of rent due despite the landlord’s acceptance of payment and withdrawal of that ground for ejectment.
  3. Whether the Rent Controller was required to frame an issue concerning non-payment of arrears after the landlord gave up that ground.

Arguments of the Parties

Appellant's Arguments

  • The Rent Controller must ensure compliance with the law independently, regardless of the parties’ conduct, and cannot allow parties to contract out of statutory provisions.
  • Section 13(2)(i) imposes a mandatory duty on the Rent Controller to determine the actual arrears and whether the tenant has paid or tendered them before granting protection under the proviso.
  • The landlord could not validly waive the ground of non-payment of arrears as that would amount to contracting out of the Act’s provisions.
  • Section 4 of the Act mandates fixation of standard rent by the Rent Controller, and agreements between landlord and tenant on rent amount are not binding if not so fixed.
  • The payment tendered by the tenant was conditional and therefore invalid, necessitating an enquiry into the actual arrears.

Respondent's Arguments

  • The payment made by the tenant was valid, accepted by the landlord, and the landlord’s counsel gave up the ground of non-payment of arrears.
  • The tenant’s statement reserving the right to recover any excess paid did not amount to a conditional payment.
  • According to precedent, a tenant may make payment under protest if he believes he is paying more than due, without invalidating the payment.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Nirajan Singh v. Murli Shri Bhagwan Ram, AIR 1956 Punj. 95 Duty of Rent Controller to fix fair rent notwithstanding agreements between landlord and tenant. Supported the principle that agreements on rent amount not fixed by Rent Controller are not binding.
George Oakes v. Chief Judge, Small Cause Courts, AIR 1961 Mad 222 Similar principle on fixation of fair rent and non-binding nature of agreements not fixed by Rent Controller. Reinforced the necessity of statutory fixation of rent to protect tenants.
Dial Chand v. Mahant Kapoor Chand, 1967 69 PLR 248 Tenant’s right to make payment under protest and conditions for claiming benefit of proviso to section 13(2)(i). Held that payment under protest is valid and tenant may recover excess if overpaid.
Jiwana Mal v. Khushi Ram, AIR 1953 Punj 70 Validity of payment under protest when payment is withheld until final decision. Distinguished facts; held payment invalid when withheld until final decision.
Gulshan Rai v. Devi Dayal, 1966 68 P.L.R 668 Concession by landlord’s counsel on tenant’s compliance with proviso and effect on eviction proceedings. Held that landlord’s concession negated ground for eviction on non-payment.

Court's Reasoning and Analysis

The Court analyzed the statutory provisions of sections 4 and 13 of the East Punjab Urban Rent Restriction Act, 1949, distinguishing their purposes. Section 4 mandates the Rent Controller to fix fair rent irrespective of agreements, protecting tenants from exorbitant demands. Section 13(2)(i) provides that a tenant must pay or tender arrears to claim protection from ejectment. The Court found no statutory duty on the Rent Controller to independently assess arrears beyond the landlord’s demand if the tenant pays the amount demanded along with interest and costs.

The Court held that the tenant’s payment on the first hearing was valid and unconditional despite his reservation of the right to recover any excess, referencing Dial Chand v. Mahant Kapoor Chand which confirmed a tenant’s right to pay under protest. The landlord’s withdrawal of the non-payment ground meant the Rent Controller was justified in not framing an issue on that point. The Court rejected the appellant’s argument that the Rent Controller should have conducted an enquiry into the actual arrears irrespective of the landlord’s acceptance and withdrawal.

Accordingly, holding an enquiry into the actual arrears in this context would serve no practical purpose and would lead to anomalous situations. The Court agreed with the Appellate Authority’s conclusion that the payment was valid and the landlord had effectively waived the ground for ejectment based on non-payment.

Holding and Implications

The revision petition is dismissed with costs.

The Court’s decision directly upholds the validity of the tenant’s payment under protest and the landlord’s ability to waive grounds for ejectment, thereby affirming the Rent Controller’s discretion not to inquire further when arrears are tendered and accepted. No new precedent altering statutory interpretation was established; the ruling reinforces existing principles concerning tenant protections under the Act and the procedural role of the Rent Controller.

    Behari Lal v. Ajudhia Dass .

    V.D Misra, J.:— This revision under section 15(5) of the East Punjab Urban Rent Restriction Act. 1949, has been filed against the Judgment of Appellate Authority, Kangra at Dharamsala, upholding the judgment of Rent Controller, Kangia and dismissing the application for ejectment filed be Behari Lal. Briefly stated, the facts are that Behari Lal is the landlord and Ajudhia Das is a tenant under him on the ground floor of his double storeyed shop No. 231, Dehra Gopipur, District Kangra. The landlord filed an application for ejectment of the tenant under; sections 13(2)(1), 13(2)(ii), and 13(2)(iii) of the East Punjab Urban Rent Restriction Act, (1949) (hereinafter rrferred to as the ‘Act), The allegations were that the tenant had not paid the rent since 28th May, 1958, and thus owed the landlord a sum of Rs. 1620.00 as arrears of rent at the rate of Rs. 20.00 per month. It was also alleged that the tenant had partitioned the shop without the written consent of the landlord. The third allegation was that the tenant has committed various acts and has impaned materially the value and the utility of the shop in question. Tretenant controverted the allegations made by the landlord. He, however, admitted that some rent was due from him but it was due to the fact that the landlord was not cccepting payment of rent from him. He expressed his willingness to tender and pay in the Court the arrears due along with requisite interest and costs assessed by the Controller in terms of the provision of Proviso to section 13(2)(i) of the Act. On 3rd April, 1965, the first hearing of the application for ejectment after due service, the tenant tendered Rs. 2074.44 paise on account of rent, interest and costs as assessed by the Controller. His counsel made a statement that rent on excess was being taken for which an application had been made. The application of that date made by the tenant states that he had already paid rent upto 31st October, 1963, and the landlord petitioner was not entitled for the period before 6th January, 1961 and that the tenant was entitled to recover the amount which has already been paid to the landlord and for which he was not entitled. On the same day the learned counsel for the landlord made a statement giving up the ground of ejectment based on the non-payment of arrears of rent.

    2. The Rent Controller framed the following issues:—

    (1) Whether the respondent has partitioned the shop and is liable to ejectment on that ground?

    (2) Whether he has materially impaired the value or utility of the building?

    3. After going through the evidence produced by the parties the Rent Controller dismissed the application for ejectment filed by the landlord. An appeal was filed before the Appellate Authority by the landlord which was also dismissed.

    4. The only contention raised before the Appellate Authority was that the payment made by the tenant on the first date of hearing was not unconditional and so was not a valid payment in the eyes of law, and therefore, the tenant should have been ejected on that ground. The Appellate Authority came to the conclusion that the payment was valid and, in view of the statement made by the counsel for the landlord giving up this ground; the Rent Controller was justified in not framing any issue in respect of this ground.

    5. Mr. Rup Chand Chaudhry on behalf of the petitioner has contended that it was the duty of the Rent Controller to see that law is complied with irrespective of the conduct of the parties since the parties could not contract out of the provisions of this Act, and he should have framed an issue He further submitted that the provisions of section 13(2)(i) are mandatory and lay down a duty on the Rent Controller to find out what the arrears of rent are and whether the tenant has paid or tendered the payment of such arrears before the tenant could be entitled to the protection of the proviso to clause (i) of sub section (2) of section 13 of the Act. According to him, the landlord could not give up the ground of non-payment of arrears of rent since this will amount to his contracting out of the relevant provisions of the Act. He tried to seek support from section 4 of the Act which lays down a duty on the Rent Controller to fix the standard rent of the premises and contended that any agreement between the landlord and the tenant in respect of the amount of standard rent would not he binding on the parties.

    6. Sections 4 and 13 of the Act have been enacted to meet entirely two different sets of circumstances. The landlord taking advantage of the paucity of accomodation; had started demanding exorbitant rent of the premises from’ the tenants and the tenants were forced to pay those amounts in order to have roofs over their heads The tenants had gone to the extent of entering into Any type of agreement dictated by the landlord so that they should somehow get some place to live in. In these circumstances. It was necessary for the legislature to step in and provide for a rent which could be termed fair. Section 4 of this Act provide in detail the various factors which have to be taken into consideration by the Rent Controller in order to determine what the fair rent of the premises in question would be, not with standing anything contained to the contrary in any agreement arrived at between the parties. Under these circumstances it was held by some of the High Courts that any agreement between the landlord and the tenant in respect of amount of standard rent, would not be binding on them since it had not been fixed by the Kent Controller according to the terms of section 4. To hold otherwise would amount to nullify the effect of the provisions enacted for fixation of fair rent and to perpetuate the stranglehold of the landlords over the tenants.

    7. The learned counsel for the petitioner referred to various judgments of the High Courts including Nirajan Singh v. Murli Shri Bhagwan Ram . A.I.R 1956 Punj. 95, and George Oakes v. Chief Judge, Small Cause Courts . AIR 1961 Mad 222., to show the duty cast upon the Controller in respect of fixing the fair rent.

    8. As regards section 13 of this act, the terminology used by the legislature does not show that any duty was cast on the Kent Controller to assess the arrears of rent due independent by of the stand taken by the landlord. In other words, in a case where the landlord had demanded a particular amount as arrears of rent and the tenant had paid that amount along with interest and costs as required by the proviso to section 13(2)(1), the Rent Controller had no authority to enter on an enquiry to find out as to what the arrears in fact were, before dismissing the application of the landlord on this aspect. If that were not, so, it would give rise to various anomalous stuations. One of such situations will be where the landlord may be demanding a lesser amount as an ears than what was, in fact, due. In such a situation after the Rent Controller had found as to what the arrears were, has the Rent Controller now to force the landlord to accept the additional amount and has the tenant now to be non suited on the round that he has not paid the rent due faced with this situation, the learned counsel for the petitioner had to admit that in such a situation the tenant could not be non-suited because he could be only ejected if the amount paid by him turned out to be less than the rent due as demanded by the landlord. He, however, submitted that in the instant case the payment by the tenant was conditional and so it was the duty of the Rent Controller to go into the question at to what amount of rent was due from the tenant, irrespective of the fact that the landlord accepted the payment unconditionally and gave up this ground for ejectment. I asked him that supposing the Rent Controller, on holding an enquiry, came to the conclusion that the rent paid by the tenant was not in excess of the amount demanded by the landlord, would the Rent Controller be justified in non suiting the tenant and ordering his ejectment. I also asked him if the Kent Controller came to the conclusion that, in fact, excess amount has been paid would he be justified in directing the landlord to pay back the excessive amount. The leamed counsel for the landlord-petitioner had to admit that in the former case the Rent Controller could not order the ejectment of the tenant while in the latter case he could order the repayment to the tenant but the case would not be affected. Holding an enquiry in such circumstances would be a sheer waste of time.

    9. As I read the relevant portion of this section I find that the only duty cast on the Rent Controller is to see whether on the first date of hearing the tenant has paid or tendered the arrears of rent as desired by the landlord along with interest and costs. The moment he finds that such an amount has been paid it is his duty to dismiss the application of the landlord on that aspect without holding any enquiry as to what is the amount due as arrears of rent. The question of holding such an enquiry would only arise, where the tenant has specifically raised this question and wants the enquiry to be held by the Rent Controller in order to be successful in his averments. In this case when the payment of full amount claimed by landlord was made by the tenant, he had only stated as fact that according to him he was paying more than the rent was due and he reserved his right to recover back the excess paid by him. This does not show that he was making any conditional payment. Had this not been the case, the landlord would have never accepted the payment and would not have given up this important ground of his ejectment. A reference was made to Dial Chand v. Mahant Kapoor Chand . 1967 69PLR 248. where it was held as under:—

    “The proviso to clause (i) of sub-section (2) of section 13 of the East Punjab Urban Rent Restriction Act (3 of 1949) being for the benefit of the tenant, if he wishes to take advantage of it, he has to comply with it strictly, and in a case where there is a dispute as to the quantum of rent, he can take one of the three courses. He can under protest make payment or tender of the arrears at the rate claimed by the landlord in the ejectment application, and if the rate is found subsequently to be less, he can hope for adjustment of the excess payment He can come forward with a straight statement of what is the true rate of rent and on that proceed to comply with the proviso, in which case he has the benefit of the proviso, if the finding is that the rate stated by him is the rate of rent for the tenancy. Lastly, he can enter into a dispute with the landlord, as in this case, and insist upon his lower rate of rent and then take the consequence if he is not able to prove that that is the actual rent. If he fails to establish this ground, obviously he fails to have advantage of the proviso”.

    10. The learned counsel for the petitioner relies on this judgment and contends that according to this judgment the payment made by the tenant should be held as conditional and not in accordance with law. I am afraid, this judgment on the other hand, clearly lays down the right of the tenant to make a payment under protest if he feels that he is being asked to pay more than the rent due. I am in respectful agreement with this judgment which has correctly laid down the rights of the tenant in such a situation.

    11. The learned counsel for the petitioner also referred to a judgment of the Punjab High Court in Jiwana Mal v. Khushi Ram . A.I.R 1953 Punj 70. I find that the facts in that case were entirely different inasmuch as the tenant while depoisting the rent under protest, had pleaded that it should not be paid to the landlord until the final decision of the case. It was in these circumstances that it was held that there was no valid payment in terms of this section. Reference was also made to notes on unreported cases in A.I.R 1955 N. U. C. 1978. The bare reading of this note shows that the question there was that the payment made by the tenant was Jess than the amount of arrears of rent claimed and in those circumstances it was held that the landlord was not estoppsd from urging that the payment made by the tenant did not fulfil the requirements of law. The learned counsel for the respondent has invited my attention to a decision of the Punjab High Court reported in Gulshan Rai v. Devi Dayal . 1966 68 P.L.R 668 In this case also the counsel for the landlord had conceded that the tenant had complied with the requirements of the proviso and his eviction could not be ordered on that account. Later on, it was contended that the concession was on a question of law and the party was not bound by it. In these circumstances it was held as under:—

    “The only other thing that I wish to point out is that before the Appellate Authority on the side of the landlord it was contended that the tenant had compiled with the requirements of the proviso with regard to the tender of arrears and interest on the first hearing and his eviction could not be ordered on that ground The learned counsel for the landlord has contended that the counsel for the landlord before the Appellate Authority could not make a concession on a question of law but did he make a concession on a question of law for a party who is entitled to a payment can always forgo that payment at the stage of the Appellate Authority the side of the landlord was no longer wanting the payment of the costs then the ground of eviction for noncompliance with the proviso to section 13(2)(i) cease to exist and as much was conceded before the Appellate Authority.”

    12. In my opinion the Appellate Authority was right in holding that the payment made by the tenant and accepted by the landlord was a valid payment in terms of section 13(2)(i) and once the landlord had given up this ground of ejectment, the Rent Controller was justified in not framing any issue on that aspect. The result is that this revision fails and is dismissed with costs.

    13. Revision dismissed.

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    Comments

    Behari Lal v. Ajudhia Dass .
    (Sep 26, 1969)