K. Sreenivasa Rao And Another, v. K.M Narasimhiah And Another,

1. Civil Revision Petition No. 472/71 arises out of the case in H, R.C 169/66 disposed of by the first Munsiff, Bangalore. Civil Revision Petition No. 546/71 arises out of the case in H.R.C 172/66. These revision petitions are filed under Section 50 of the Mysore Rent Control Act, 1961. In both the cases, the tenants are the petitioners. In C.R.P 472/71, the petitioner was a tenant of shop No. 92, Balepet. Bangalore City. In C.R.P 546/71, the petitioner was a tenant of an office room which was part of the first floor of the building bearing Municipal No. 89, situated in Balepet, Bangalore City, as described in the schedule to the petition. The landlord was in occupation of a portion of the premises using the same for his residential purposes. The other portions of the building were let out to eight tenants including the present petitioners. There were four shops in the ground floor and four rooms in the first floor. The landlord is the first respondent in C.R.P 472/71 and the sole respondent in C.R.P 546/71. The second respondent in C.R.P 472/61 is in occupation of the shops No. 92 in the newly constructed premises as a tenant under the landlord from 21-1-1971. The landlord filed eight petitions H.R.C Nos. 169 to 176 of 1966. All the tenants appear to have initially contested. On 7-12-1967, five of this tenants gave up the contest. Subsequently on 25-7-1970 one more tenant also decided not to contest. Thereafter, it is only the petitioners in the above-said two revision petitions who contested the landlord's petitions. The landlord filed the petitions under Section 21(1)(j) of the Act alleging that the building is very old and that it needs urgent reconstruction after demolition. He also produced the licence issued by the Municipal Corporation along with the sanctioned plan. After five of the tenants gave up the contest, the landlord appears to have started demolition of the portion of the building which was in occupation of the tenants who gave up the contest. When matters stood thus, the two petitioners filed identical memos into court on 12-8-1970. The memos read as follows:

“1. The building requires demolition and reconstruction and I consent to an order being passed in terms of Section 21 clause (j) of the H.R.C Act.

2. I have paid rent upto date amounting to Rs. 70/- by cheque.

3. I have also handed over the key of my shop to the petitioner in the court today.

4. I pray for an order accordingly.”

2. Along with the memo, it is admitted that the key of the premises was handed over to the landlord in court. The order sheet of 12-8-1970 reads as follows:

“Petitioner by Shri M.R.J Respondent by Shri K.N.R Shri M.R.J reports receipt of cheque for Rs. 70/-. Shri K.N.R files a memo. The respondent delivered the key of the premises to the petitioner and the petitioner reports receipt of the key. Orders on 13-8-1970.”

3. As a consequence of this, the trial Court passed a common order on 13-8-1970 allowing both the petitions in H.R.C 169/66 and 172/66. It also directed that the landlord shall start the work of demolition within one month from that date. Against this order. H.R.C Appeals Nos. 146 and 147 of 1970 were filed in the court of the First Additional Civil Judge, Bangalore. The lower appellate court held that the court has no jurisdiction to pass an order on consent of the parties under sub-clause (j) of Section 21(1) of the Act. It also held that since the two tenements in the occupation of the tenants had collapsed, the tenants gave the memo to the court on 12-8-1970, and the tenants handed over the keys to the landlord on 12-8-1970 and therefore the trial court had no Jurisdiction to pass the order under S. 21(1)(j) of the Act. It accordingly allowed the appeals and set aside the common order of the trial court. It is against this common order of the appellate court that the present two revision petitions have been filed by the two tenants. According to the landlord, the portions of the building which were in occupation of these two tenants had collapsed and were not in existence on 12-8-1970. According to the tenants, the said portions of the premises had not collapsed, but were standing though not in a good condition. It is an admitted fact that subsequent to the order of the trial court the building has been reconstructed. The appellate court disposed of the appeals on 21-1-1971. On the same day, the landlord put the second respondent in C.R.P 472/71 in possession of the new shop premises bearing No. 92. The said second respondent has been impleaded in this court. According to the affidavit filed by the landlord, he entered into the lease agreement between the second respondent and himself since he had agreed to let out the said premises to second respondent in case he succeeded in the appellate court. The lease deed dated 21-1-1971 has also been produced. Since the second respondent has been put in possession of part of the new building during the pendency of the proceedings, arising out of the landlord's petition under Section 21(1)(j), the lease in favour of the second respondent in C.R.P 472/71 is hit by lis pendens. Hence, the rights of second respondent are subject to the order that will be passed in the present revision petition.

4. It is not disputed that the petitioners were statutory tenants on 12-8-1970. It has been held in AIR 1967 SC 1853, Hiralal v. Kasturbhai that a statutory tenancy comes to an end only on the passing of an order of eviction under the Act or by the tenant giving up the tenancy himself. The question for consideration, therefore, is that since there was no order of eviction on 12-8-1970 whether the petitioners surrendered their tenancy. The fact that they handed over the key of the premises in court and it was accepted by the landlord in court is not disputed. The question is whether the handing over the key which in effect is handing over of possession by the tenant to the landlord, amounts to surrender of the tenancy. It is not in all cases where possession is handed over by the tenant to the landlord that a surrender takes place. The intention of the tenant in handing over possession to the landlord must be to surrender his tenancy. There may be cases where possession of the leased premises is handed over to the landlord on the understanding that the landlord may effect repairs to the premises leased and restore possession to the tenant after such repairs. Hence, it is the intention with which the possession is handed over by the tenant to the landlord that determines whether there is a surrender of the tenancy or not. It is contended on behalf of the landlord that though he had stated in his main petition that he was agreeable to put the tenants back in possession in the newly constructed premises and though he stated in his own evidence that he would restore possession to the tenants after reconstruction, he had filed the applications I.A Nos. V and VI indicating that he no longer stuck to the said undertaking to restore possession to the tenants. I.A V was for deleting that portion of the petition which stated that he undertook to restore possession to the tenants after reconstruction, I.A No. VI was for deleting certain portions of the statement in his evidence in which he had stated that he would restore possession to the tenants. Both these, I.As had been rejected by the trial court on 25-7-1970. It is contended that though the tenants' memo stated that an order may be passed under sub-clause (j) of Section 21(1), the landlord never agreed to receive the keys on condition that the tenants would be restored to possession after reconstruction. It is no doubt true that there is nothing in the order sheet of 12-8-1970 to show that the landlord consented to the terms of the memos filed by the tenants. But the intention of the tenants in handing over possession of the keys in court is made clear by the terms of the memos filed by them. They have clearly stated that the building requires demolition and reconstruction and that they consent to the order being passed in terms of sub-clause (j) of Section 21(1) of the M.R.C Act, and that an order may be passed accordingly. Hence, the intention of the tenants in handing over possession was with a view to enable the landlord to demolish and reconstruct the premises leased to them reserving their rights of re-entry under the Act which flow from an order under sub-clause (j). Hence, though the landlord was not a consenting party to the conditions laid down in the memos filed by the tenants, by the mere fact of surrender of possession, the tenants did not surrender their tenancies. The lower appellate court seems to have assumed that by the mere surrender of possession the tenants surrendered the tenancy as well.

5. The next contention urged on behalf, of the landlord is that on 12-8-70, the portions of the building which were leased to the present petitioners had collapsed and reliance is placed on the decision in AIR 1964 Mad 453, Md. Sheriff v. Md. Thasim Sahib wherein it is held that a statutory tenancy comes to an end when the house ceases to exist either due to change of identity or destruction of the premises. It is contended on behalf of the petitioners that the building had not collapsed on that date. In the memos filed by the tenants on that day, it is stated that the building requires demolition and reconstruction thereby implying that the premises in the occupation of the present petitioners had not collapsed by that time. There is nothing in the order sheet to show that on 12-8-1970 the landlord stated that the entire building had collapsed. If the entire building had really collapsed it was open to the landlord to state before the court that the building had collapsed and that he would not like to press the eviction petitions. The contention that the entire building had collapsed appears to have been urged for the first time in the appellate court. In the appeal memo filed in the lower appellate court on 6-11-1970, it is stated that the tenants filed the memos as a result of the premises “having come to grief on its own accord”, and was not actuated by the desire on the part of the tenants to put the landlords in possession of the premises for the purposes of reconstruction. Even in this appeal memo, it is to be noticed that the landlord has not stated that the portions of the building leased to the present petitioners had collapsed by 12-8-1970. The expression used is “that the premises had come to grief on its own accord”. This supports the case of the petitioners that the premises had not collapsed but was only in a bad state of repairs. This is also probable in view of the fact that the landlord admittedly had demolished portions of the same building which were formerly in the occupation of the other tenants who gave up their contest. Hence the lower court was wrong in assuming that the portions of the building which was leased to the present petitioners had collapsed by the date the possession was surrendered by the tenants-petitioners i.e on 12-8-1970.

6. It is next contended on behalf of the landlord that the two applications I.As 5 and 6 in H.R.C No. 169 of 1966 and the similar applications I.A Nos. 4 and 5 in H.R.C No. 172 of 1966 were erroneously rejected by the trial court. The two applications relate one to the amendment of the petition filed by the landlord to delete the undertaking given by the landlord to restore possession to the tenants after reconstruction, and the other to delete that part of the statement in the evidence of the landlord wherein he had similarly undertaken to restore possession to the tenants after reconstruction. These applications were rejected by the trial court on 25-7-1970. With regard to these applications the lower appellate court has observed that the landlord by an affidavit has withdrawn the offer to put the tenants back in possession. The reference obviously is to the affidavit of the landlord filed in support of the abovesaid applications. It is contended on behalf of the landlord that if these applications had been allowed by the trial court, it would have naturally dismissed the petitions of the landlord on the ground that there was no undertaking to restore possession to the tenants and that consequently there is no bona fide requirement made out under sub-clause (j). The landlord came to the court asking for relief under sub-clause (j) of Section 21(i) of the Act. On the dates he filed these applications he wanted an order of the court for eviction of the tenants but he wanted to wriggle out of the undertaking that he had to restore possession to the tenants. He also wanted an order of the Court without an imposition of the condition that possession must be restored to the tenants after reconstruction. On the date the tenants surrendered possession there was already an order of the court rejecting these applications. The tenants naturally presumed that the court was entitled to act upon the undertaking given in the main petition as well as in the evidence of the landlord. It is for that reason that they surrendered the possession. If the landlord had been allowed to withdraw the undertaking, it is unlikely that the tenants would have voluntarily surrendered possession of the premises through court. The landlord is estopped from so contending. Since it has already been held that the premises had not collapsed on the date of surrender of possession by the tenants, the landlord must be deemed to have demolished the premises and reconstructed only in pursuance to the order of eviction passed by the trial court under sub-clause (j). Hence it is not open to the landlord now to say that the said applications were wrongly rejected. Since the demolition and reconstruction is in pursuance of the order of the trial Court under sub-clause (j), the consequences provided for under the Act follow and the tenants are vested with the rights conferred on them under the Act, in particular, those under Sections 26, 27 and 28. Hence, it is not open to the landlord now to urge that those applications were wrongly rejected by the trial court.

7. It is next contended that the trial court had no jurisdiction to pass an order of eviction under sub-clause (j) on the basis of the consent given by the tenants as made out in the memos filed by them into court. Reliance was placed on the decisions in (1969) 2 SCJ 145 : ((1969) 1 SCC 59 : AIR 1970 SC 838), in (1970) 3 SCC 181 : AIR 1970 SC 794 and in (1970) 2 Mys L.J 108.

8. In (1969) 2 SCJ 145 : ((1969) 1 SCC 59 : AIR 1970 SC 838), Srimathi Kaushalya Devi & Others v. Shri K.L Bansal , the landlord had filed an eviction petition under Section 13 of the Delhi and Ajmer Rent Control Act (XXXVIII of 1952) alleging that the premises were required bona fide for his own occupation as residence for himself and other members of the family, and that he had no other suitable accommodation to meet his bona fide residential requirements that the defendant already owned a house in Delhi which was suitable for him; and that the defendant had defaulted in payment of rent. The defendant-tenant denied these allegations in his written statement. Issues were framed. Subsequently the parties entered into a compromise and an application was filed by both the parties setting out the terms of the compromise. One of the terms of the compromise provided for an order of eviction being passed in favour of the landlord against the tenant. The court in pursuance of the abovesaid application passed the following order:

“In view of the statement of the parties' counsel and the written compromise, a decree is passed in favour of the plaintiff against the defendant.”

9. The decree was drawn up accordingly. The validity of the decree being challenged, the High Court, on revision, held that the decree was a nullity as the order passed on the basis of the compromise did not indicate that any of the statutory grounds mentioned in Section 13 of the Act existed. Since the court had passed a decree in terms of the compromise without satisfying itself that the ground for eviction existed it was held that the decree was a nullity.

10. In (1970) 3 SCC 181 : AIR 1970 SC 794, Ferozi Lal Jain v. Man Mai, the landlord filed an eviction petition under Section 13(1) of the Delhi and Ajmer Rent Control Act (38 of 1952), on the ground that the tenant had sublet the premises. During the pendency of the suit the landlord and the tenant entered into a compromise on the basis of which the compromise decree was passed by the court. The compromise petition did not make any reference to the alleged sub-lease. The order of the court read as follows:

“As per compromise, decree for ejectment and for Rs. 165/- with proportionate costs is passed in favour of the plaintiff and against the defendant. The parties shall be bound by the terms of compromise. The terms of the compromise be incorporated in the decree-sheet. Orders pronounced. Dated the 4th March, 1965.”

11. The second respondent (the alleged sub-lessee) resisted the execution contending that he is not bound by the decree. Thereafter there was a second compromise between the landlord and the second respondent (the sub-lessee), under the terms of which the second respondent was given some time to vacate the premises. The second respondent did not vacate and in a subsequent execution he raised a plea that the decree having been passed in contravention of Section 13 of the Rent Control Act, it is a nullity and therefore, it is not executable. After referring to the terms of Section 13 of the said Act, the court has observed as follows:

“From this provision, it is clear that after the Rent Control Act came into force, a decree for recovery of possession can be passed by any court only if that court is satisfied that one or more of the grounds mentioned in Section 13(1) are established. Without such a satisfaction, the court is incompetent to pass a decree for possession. In other words, the jurisdiction of the court to pass a decree for recovery of possession of any premises depends upon its satisfaction that one or more of the grounds mentioned in Section 13(1) have been proved. From the facts mentioned earlier, it is seen that at no stage, the court was galled upon, to apply its mind to the question whether the alleged subletting is true or not. Order made by it does not show that it was satisfied that the sub-letting complained of has taken place, nor is there any other material on record to show that it was so satisfied. It is clear from the record that the court had proceeded solely on the basis of the compromise arrived at between the parties. That being so there can be hardly any doubt that the court was not competent to pass the impugned decree. Hence the decree under execution must be held to be a nullity.”

12. In (1970) 2 Mys L.J 108, Pulakurthi Hussain Sahib… v. S. Gururaja Rao…., an eviction petition was filed under Section 21(1)(a) of the Mysore Rent Control Act, 1961 by the landlord on the ground that the tenant had committed default in payment of rent. During the pendency of the proceedings, a joint memo of compromise was filed by the parties. According to the memo, the eviction petition had to be allowed and the tenant had to be given three months time to vacate the premises, and the landlord agreed to waive arrears of rent. The court passed a decree in terms of the joint memo. During the execution proceedings the tenant contended that the decree passed against him was a nullity and that it cannot be executed. The decretal order passed by the court in that case reads as follows:

“This petition coming on before me this day for final disposal upon perusing the petition and the material papers connected therewith and upon hearing the arguments of Shri A. Aswatha Rao Advocate for the petitioner and of Shri H. Mallikarjuna Goud, Advocate for the respondent and the same having stood over to this day for consideration the court allowed the petition, in terms of the joint memo and the joint memo is herewith attached.

2. This court doth order and decree that three months' time is given to the respondent to deliver the vacant possession of the petition schedule mentioned premises to the petitioner.

3. This court further ordered and decreed that each party do bear their costs.”

13. It was observed that the decree passed in that case did not indicate that any of the statutory grounds for eviction mentioned in the Act existed. It was also observed that the tenant disputed that there were any arrears of rent and also alleged that even if there were arrears of rent the same had been waived by the landlord. The decree did not indicate that any arrears of rent were due from the tenant to justify an order being passed under sub-clause (a) of Section 21 of the Act. It was further observed that even if there were any arrears of rent, as per sub-clause (2)(a) of the said section, no order of recovery of possession of any premises could be made by the court, if the tenant makes payment of deposits of rent as required by sub-clause (2)(a) and that according to sub-section (2), the court is bound to grant one month's time for the tenant to pay all arrears of rent, and that it is only after granting such time, that the court is entitled to pass an order of eviction. It was therefore held that the decree passed was opposed to the provisions of Section 21 of the Act. Following the decision of the Supreme Court in (1969) 2 SCJ 145 : ((1969) 1 SCC 59 : AIR 1970 SC 838) it was held that the decree is a nullity.

14. In the present case, the eviction petition has been filed on the ground that the schedule premises are reasonably and bona fide required by the landlord for the immediate purpose of demolition and reconstruction. The tenants filed objections repudiating the claim made by the landlord. The landlord examined himself and had closed his case. The tenant in H.R.C No. 172/66 had been examined; the tenant in H.R.C No. 169/69 has not examined himself, but the two cases had been clubbed together. It is at that stage that a memo was filed in each of these cases on 12-8-1970. In these memos, the terms of which have already been set out above, the tenants stated that the schedule building requires demolition and reconstruction and that they consent to an order being passed in terms of Section 21(1)(j) of the Act. Both the tenants handed over the key of the premises to the landlord, in court. After setting out these circumstances the common order passed in the said two cases are in these words:

“The petitioner has given evidence that the schedule building is in a dilapidated condition and that he wants to demolish the same and put up a new construction. The respondents Shri K. Rama Krishnaiah and Shri K. Srinivasa Rao have now admitted that the schedule building requires demolition and reconstruction and they have also consented for an order being passed under Section 21(1)(j) of the Mysore Rent Control Act, 1961. In view of the evidence given by the petitioner and in view of the admissions made by the respondent Shri K. Ramakrishnaiah and the respondent Shri K. Srinivasa Rao, it is very clear that the petitioner reasonably and bona fide requires the schedule premises for the immediate purpose of demolition and reconstruction. It is therefore seen that the petitioner is entitled to an order of eviction against these two respondents on the ground mentioned in Section 21(1)(i) of the Mysore Rent Control Act, 1961. As already stated both these respondents have handed over the keys of the premises which are in their occupation respectively to the petitioner on 12-8-1970 itself.

In the result, the petitions filed in H.R.C 169/66 and H.R.C 172/66 are both allowed. The petitioner shall start the work of demolition within one month from this date. It is needless to say that the two respondents have their right which are given to them under Sections 26, 27 and 28 of the Mysore Rent Control Act, 1961.

In these circumstances of the case, I direct each party to bear his own costs.

Dictated to stenographer, transcribed by him, revised, corrected and then pronounced by me in open court this 13th day of August 1970.”

15. From the terms of the above-said order of the trial Court, it is clear that the court applied its mind to the respective contentions of the parties, considered the evidence of the petitioner in respect of his plea that the schedule building is in a dilapidated condition and that he wanted to demolish the same and put up a new construction. It is also considered the admissions made by the tenants as set out in the memos filed by them and came to the conclusion that in view of the evidence given by the petitioner and the admissions made by the tenants the petitioner had proved that the schedule premises were required by him reasonably and bona fide for the immediate purpose of demolition and reconstruction. The court, therefore, held that the landlord is entitled to an order of eviction under Section 21(1)(j). It is in pursuance of that finding that an order of eviction was passed by the court under sub-clause (j). In the above-said cases, relied on by the respondent the decree was held to be a nullity since the court had not applied its mind to the question whether the requirements of the law which would enable the landlord to obtain an order of eviction had been satisfied and also because the court had not given a finding that such requirements had been established before passing an order of eviction. In all these cases, the court had merely ordered that a decree may be drawn up in terms of the compromise as if the proceedings were under Order 23, Rule 23 of the Code of Civil Procedure. But in this case, first there is no compromise petition filed by both the parties. It is only the tenants who filed memos admitting that the premises required demolition and reconstruction. In fact, the contention on behalf of the landlord both in the lower appellate court and in this court is that he was not a party to any compromise, and that the filing of the memos by the tenants were only unilateral acts to which the landlord was not a party. His contention is that whatever is stated in the memos filed by the tenants is not binding on him since he never consented to the said terms. Consequently, the court applied its mind to the contest between the parties and has treated the memos filed by the tenants as admissions on their part that the schedule premises requires demolition and reconstruction. The court was entitled to treat the statement in the memos filed by the tenants as admissions which support the allegations made by the landlord in his eviction petition. The court has also given a finding that the landlord has established his case for the passing of an order of eviction under sub-clause (j). Under these circumstances, the principle laid down in the above three cases does not apply to the facts of this case. The decree of the trial court is therefore valid and enforceable. Since a valid order has been passed under sub-clause (i) of Section 21(1) of the Act, the rights and liabilities of the landlord and the tenants are governed by the provisions of Sections 26, 27 and 28 of the Act. Sine the building has admittedly been reconstructed, the relevant provisions that apply are those contained is Sections 27 and 28. It is stated on behalf of the tenants that the tenant in C.R.P 472/71 issued a notice under Section 27 on 11-12-1970 and the tenant in C.R.P 546/71 issued a similar notice on 12-1-1971. The landlord was also said to have issued replies stating that the matter is sub judice since appeals had been filed against the order of the trial court. Since the demolition and reconstruction is in pursuance of the order of eviction passed in sub-clause (j) there cannot be any doubt that the landlord is liable to place the tenants in vacant possession of the reconstructed building as provided in the Act. Since the lease in favour of the second respondent in C.R.P 472/71 came into existence and the second respondent occupied the new building during the pendency of the proceedings arising out the landlord's eviction petition under Section 21(1) sub-clause (j), the rights of the second respondent are subject to the rights of the original tenants conferred on them under Sections 27 and 28 of the Act.

16. with the above-said observations, these revision petitions are allowed. The order of the lower appellate court is set aside, and that of the trial court is confirmed. The respondent shall pay the costs of the petitioner in each of the cases.

Petitions allowed.