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Smart Summary

Factual and Procedural Background

This is a tenant's appeal against the judgment and decree dated 5 March 1991 of the Additional District Judge, Delhi, which decreed the landlord's suit for possession. The subject property is Flat No. B, Ninth Floor, Atma Ram House, 1 Tolstoy Marg, New Delhi (941.52 sq. ft.). The landlord (now respondent) filed a suit for possession under ordinary civil law, alleging that the defendant-appellant was his tenant at a monthly rent of Rs. 4,000 with effect from 1 April 1988, and therefore outside the purview of the Delhi Rent Control Act, 1958. The plaintiff alleged he had served a notice terminating the tenancy and thereafter instituted the suit, which was decreed with costs.

The parties' admitted background includes an initial letting on 18 June 1974 at a monthly rent of Rs. 2,655. The lease deed contained a clause that any increase in house-tax would be borne by the lessee. The rent was increased on several occasions (to Rs. 3,155 w.e.f. April 1982; to Rs. 8,750 w.e.f. 1 April 1985; and to Rs. 4,000 w.e.f. 1 April 1986) purportedly on the plaintiff's representations regarding house-tax. The tenant challenged the termination notice and contended the Delhi Rent Control Act was applicable.

During hearing it was noted the entire building had been sealed following a fire incident in March 1990; the tenant was reportedly not in possession and could not enter unless permitted. The landlord stated rent had not been paid since March 1989, though the court observed that was not the issue in the present appeal. The appeal was dismissed.

Legal Issues Presented

  1. Whether the termination notice was validly served on the defendant-tenant.
  2. Whether the Delhi Rent Control Act, 1958 applied to the premises (i.e., whether the rent was properly treated as Rs. 4,000 per month and thus the premises fall outside the Act).

Arguments of the Parties

Appellant's Arguments (tenant)

  • The notice terminating the tenancy was not properly served on the defendant.
  • The Delhi Rent Control Act is applicable because the rent increases were not validly imposed in terms of the lease; the lease required any increase to be tied to house-tax and the tenant relied on the landlord's representations about house-tax increases.
  • The tenant had no means independently to verify house-tax increases and therefore relied on the plaintiff's representations regarding rent increases.
  • The validity of the amendment to the Delhi Rent Control Act was said to be pending challenge in the Supreme Court (raised to contest application of the Act), though this was not argued as a bar to disposal of the appeal by the court.

Respondent's Arguments (landlord / caveator)

  • The agreed rent was Rs. 4,000 per month w.e.f. 1 April 1988, placing the tenancy outside the Delhi Rent Control Act and making a civil suit maintainable.
  • The notice terminating the tenancy was properly addressed and sent by registered A.D. post to the defendant at its office address; a notice was also sent to Capt. K.C. Saigal at his residential address.
  • During hearing the landlord (Caveator) stated rent had not been paid since March 1989 (noted by the court as not being the issue in the appeal).

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court addressed the two principal points raised on appeal.

  1. On the question whether rent increases were effected in terms of the lease: the court observed that the lease clause permitted the tenant to bear increases in house-tax. However, the pattern and amounts of rent increases did not correlate with house-tax increases; indeed, house-tax had decreased at one point. The court concluded the rent increases were not occasioned by house-tax increases but were the result of agreement between the parties. The court further noted Section 7 of the Delhi Rent Control Act (as referenced) provides that house-tax etc. is to be payable by the landlord where the section is applicable; the court found Section 7 not applicable because the rent here was increased by agreement, not due to house-tax.
  2. On service of the termination notice: the court found the notice had been addressed to the tenant at its office by registered A.D. post, and an additional notice was addressed to Capt. K.C. Saigal at his residence. Although the acknowledgement card did not bear Capt. K.C. Saigal's own signature, the court held that if someone at the defendant's office received the registered notice on its behalf, service could not be said to be improper. There was no substantive challenge to the validity of the notice itself.
  3. The court rejected the submission that a pending challenge in the Supreme Court to the amendment (previously upheld by this Court) justified delaying disposal of the appeal; the court considered the law as laid down by this Court upholding the amendment to be controlling for present purposes.
  4. The court noted, as a factual circumstance, that the building had been sealed after a March 1990 fire and the tenant claimed inability to occupy; the landlord asserted non-payment of rent since March 1989 but the court observed that issue was not before it in the appeal.

Holding and Implications

DISMISSED.

Holding: The appeal was dismissed and the judgment and decree of the learned Additional District Judge decreeing the landlord's suit for possession were affirmed.

Implications: The direct effect is that the trial court's decree for possession in favour of the landlord is maintained and the tenant's contentions regarding service and applicability of the Delhi Rent Control Act were rejected. The opinion does not purport to set a new broader precedent beyond affirming the application of the legal reasoning described above.

    Interocean Shipping v. Lt. Col. Y.R Puri .

    D.P Wadhwa, J.— This is tenant's appeal against the judgment and decree dated 5 March, 1991 of the learned Additional District Judge, Delhi, whereby he decreed the suit of the plaintiff landlord for possession. The property in question is Flat No. B on the Ninth Floor in Atma Ram House, 1, Tolstoy Marg, New Delhi, with a floor area of 941.52 sq. ft. The plaintiff is now respondent before us. He filed a suit for possession under the ordinary civil law stating that the defendant-appellant was his tenant at a monthly rent of Rs. 4,000/- and, thus, outside the purview of Delhi Rent Control Act, 1958. He said this rate of rent was agreed w.e.f 1st April, 1988. The plaintiff also said that he had served a notice terminating the tenancy of the defendant and thereafter filed the suit which, as noted above, was decreed with costs.

    2. It is unnecessary for us to refer to all the issues as in this appeal two principal points were raised by Mr. Rawal who appeared for the appellant. He said the notice terminating the tenancy was not served on the defendant and further that the Delhi Rent Control Act was in fact applicable in the facts and circumstances of the case. He said that it was admitted case of the parties that the premises were let out to the defendant on 18 June, 1974 at a monthly rent of Rs. 2,655/-. The lease deed clearly stipulated that any increase in house-tax etc. shall be borne and payable by the defendant as the lessee. He said on the representation of the plaintiff that house-tax had since increased the rent was increased by a sum of Rs. 500/- and w.e.f April 1982 rent was being paid at the rate of Rs. 3.155/-. Again on the similar representation of the plaintiff the rent was increased to Rs. 8,750/- per month w.e.f 1 April, 1985. The last increase in rent happened on the similar representation of the plaintiff and w.e.f 1 April, 1986 the rent was increased to Rs. 4,000/- per month. It can at once be seen from the increase in rent that it has no correlation with any increase of the house tax. In fact it was found that the house-tax had in fact decreased. Mr. Rawal said the tenant had no means to find out if the house-tax had increased and the solely depended on the representation of the plaintiff-landlord. This to our mind cannot be so. We are, thus, of the opinion that the learned Additional District Judge was right in holding that rent was not increased in terms of the lease deed between the parties which provided any increase in payment of house-tax by the tenant-defendant. Section 7 of the Delhi Rent Control Act to which renference was made and so far as it is applicable provided that house-tax etc. is to be payable by the landlord. This Section to our mind is not applicable in the present case as the rent in the present case has not been increased because of any increase in house-tax but because of agreement between the parties. Once it is held that the rent is Rs. 4,000/- per month the premises fall outside the purview of provisions of the Delhi Rent Control Act and a civil suit is maintainable. Mr. Rawal then said that the validity of the amendment Act though upheld by this Court is pending challenge in the Supreme Court. But that certainly cannot be a reason for keeping the appeal pending when law has been laid down by this Court itself upholding the amendment to the Delhi Rent Control Act. Coming to the question of notice terminating the tenancy we find that notice was properly addressed to the tenant at his address by registered A.D post. A notice was also addressed to Capt. K.C Saigal. Proprietor of the defendant, at his residential premises. There is no dispute that the addresses as given of the defendant were not correct. Mr. Rawal says acknowledgement card which was returned does not bear the signature of Capt. K.C Saigal himself. The fact, however, remains that the notice was addressed at a proper address at the office of the defendant. If somebody received the registered A.D notice on behalf of the defendant, it cannot be said that the defendant has not been properly served. Otherwise there is no challenge to the validity of the notice as such. This contention of Mr. Rawal also fails. Accordingly, we do not find any merit in the appeal and the same is dismissed.

    3. During the course of hearing it was pointed out that the whole of the building in which the premises in question are situate has been lying sealed because of a certain fire incident that occured there in March 1990. Mr. Rawal said that the defendant-tenant is not presently in possession of the premises and he cannot enter therein unless permitted by the authorities and after premises are declared safe. Mr. Nayyar who appeared for the Caveator-land-lord said that rent has not been paid to him as from March 1989, but that is not the issue in the present appeal.

    Appeal dismissed.
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    Comments

    Interocean Shipping v. Lt. Col. Y.R Puri .
    (Aug 8, 1991)