Pandit Raja Ram v. Sham Lal

1. The point for decision in this second appeal is from what date the rent fixed by the Rent Controller takes effect. Does it take effect from the date upon which the rent was fixed by the Rent Controller or on appeal by the appellate authority or from the date on which the application for the fixation of the rent was made? The Madras High Court has in four different cases held that the date of the application is the relevant date. See -- 'Rajammal v. Chief Judge, Court of Sm. C. C. Madras', AIR 1950 Mad 185 (A); -- 'Dr. G. V. Subba Rao V. Deviji Govindji', AIR 1950 Mad 555 (B); -- 'George Oakes Ltd., v. Chief Judge Sm. C. C., Madras', AIR 1951 Mad 222 CO. and -- 'Hari Rowji v. Malabar District Board, Kozhikode', AIR 1951 Mad 493 (D). I have also been referred to the decision of Kapur J., in an unreported case, -- 'Sheo Shankar v. G. D. Kha-nna', Civil Revn. No. 340 of 1948 (E), and Mr. Chiranjiva Lal Aggarwal has drawn my attention to a decision of the Supreme Court which has some bearing on the facts of this case, -- 'Brij Raj Krishna v. S. K. Shaw and Brothers', AIR 1951 S. C. 115 (P). This matter is likely to arise in other cases and I therefore feel, though somewhat reluctantly, that it should be considered by a larger Bench. I therefore direct that these papers be laid before my Lord the Chief Justice for the constitution of a Division Bench to hear this appeal.

ORDER Khosla, J.

This second appeal arises out of a suit for the recovery of Rs. 725/- on account of arrears of rent. The matter arose in the following way. The respondent who is a tenant of the premises in suit made an application to the Rent Controller for the fixation of rent on 27-5-1947. The Controller fixed the rent at Rs. 5/- per mensem on 17-8-1048. The landlord appealed against this order and the Appellate Authority fixed the rent at Rs. 25/- per mensem. This order was made on 14-5-1949. The landlord then filed the present suit on 27-3-1950 for the recovery of the arrears of rent on the basis that rent at Rs. 25/- per mensem was payable from the date on which the tenant had made his application, namely 27-5-1947. It may be mentioned here that the contractual rate was Rs. 25/- per mensem. The lease of the respondent began on 19-3-1944. Therefore the effect of the order of the Appellate Authority was that the contractual rent was recognised as the fair rent due from the tenant. The suit was resisted on the ground that the date from which rent at Rs. 25/- per mensem must be computed is the date on which the Appellate Authority passed its order, more particularly because the Rent Controller had fixed the rent at a lower rate. While the suit was pending the landlord also made an application to the Rent Controller for the ejectment of the tenant. This application was made on 19-6-1950. The Rent Controller took the view that under the provisions of the Punjab Rent Restriction Act the date on which the Appellate Authority passed this order was the relevant date for computing the fair rent and therefore there had been no nonpayment of the rent by the tenant. The application for ejectment Was therefore dismissed on 30-3-1951. An appeal was filed against this order and was dismissed on 8-3-1952 by the Appellate Authority.

2. The present suit was decided on 20-3-1951 and the Senior Subordinate Judge took the view that the date of the order made by the Appellate Authority was the date from which the rent payable must be computed. He followed an unreport-ed decision of Kapur J., in -- 'Civil Revn. No. 340 of 1548 (Punj) (E)', in which Kapur J., held that the order of the Rent Controller fixing fair rent takes effect from the date of the order. There was an appeal. The District Judge followed that ruling and dismissed the appeal. It is to be observed that the District Judge who heard the appeal in the suit was also acting as the Appellate Authority under the Rent Restriction Act. The District Judge dismissed the appeal in the present suit on 8-3-1952, i. e., the date upon which he dismissed the appeal in the ejectment matter.

3. Therefore the District Judge, following Kapur J's Judgment, held that rent was payable from the date of the order made by the Appellate Authority and so there had been no non-payment of rent and the landlord was not entitled to an order of ejectment, nor could he recover the arrears claimed by him. The landlord came up in second appeal to this Court and when the appeal came up before me sitting singly my attention was drawn to Kapur, J.'s decision. Although I have the greatest respect for the judgment of Kapur, J., I felt constrained to take a somewhat different view and so I considered it fit to have the matter placed before a larger Bench. The appeal has now been heard by my Lord the Chief Justice and by myself.

4. Mr. Sarin on behalf of the landlord has argued that the order fixing rent is a declaratory order and although the Rent Controller can fix a date from which his order should become effective, if he does not do so the order becomes effec-tive from the date upon which the application for the fixing of rent is made. He relied upon four Division Bench decisions of the Madras High Court. He further contended that the object of the Rent Restriction Act is to make it impossible for landlords to demand excessive rents, and therefore any contract by which an excessive rent is made payable by the tenant can be set aside. This contract is set aside from the date upon which it was entered into but certain restrictions are placed by the Legislature, namely that the tenant cannot demand back the excess amount paid by him except within certain limits. The landlord cannot recover any deficiency if the fair rent is higher than the contractual rent. Subject to these qualifications which are set out in Section 8 of the Act the rent as fixed by the Rent Controller is to be deemed for all practical purposes the rent which was agreed upon between the parties. He further contended that the function of the Rent Controller is merely to fix rent and not to determine the rights of the parties 'inter se'.

On the other hand it is contended by Mr. Chiranjiva Lal that the Rent Controller has been given the exclusive jurisdiction in all matters connected with the fixation of fair rent and eviction from leased premises. The order of the Rent Controller cannot act retrospectively and it can only take effect from the date upon which it is made. From this Mr. Chiranjiva Lal deduced two conclusions. In the first place, the rent as fixed by the Appellate Authority is recoverable only from the date of the order of the Appellate Authority. In the second place, since the landlord's application for ejectment was dismissed on the ground that there was no non-payment, the landlord cannot by means of a separate suit recover arrears because the Rent Controller and the Appellate Authority have already held that no arrears are due to the landlord. Mr. Chiranjiva Lal relied upon a Supreme Court decision reported as -- 'AIR 1951 8. C. 115 (F)', Section 4 of the Punjab Act authorises the Rent Controller to fix fair rent after making enquiry The Act does not contain an express provision au the-rising the Rent Controller to fix the date from which the standard rent fixed by him shall take effect. There is such a provision in the Delhi Ajmer-Merwara Act of which Section 1 (5) is in the following terms:

"In every case in which the Court determines the standard rent of any premises under this section it shall appoint a date from which the standard rent so determined shall be deemed to have effect."

5. Under the Punjab Act, too, the Rent Controller has the power to flx the date from which his order shall take effect but this date cannot be antecedent to the filing of the application. He can, however, flx a subsequent date. He can even fix two separate dates as may well happen in a case where certain improvements or additions to the premises have been made by the landlord. But it seems to me that if there is no direction fixing the date from which the standard rent shall take effect the standard rent becomes payable from the date of the application because that is the date on which the landlord or the tenant comes to Court and prays that his rights be determined. It is quite clear that the order passed by the Rent Controller is in the nature of a declaratory decree. It cannot be executed by itself and the landlord must file a separate suit for the recovery of the standard rent due to him.

Mr. Chiranjiva Lal tried to argue that this order is analogous to the order passed by a Civil Court in a partition suit or a suit for accounts of a suit for dissolution of partnership. In my view, however, there is no analogy between the two cases. The decree in a partition suit is executable 'per se'. So are decrees in suits for rendition of accounts and suits for dissolution of partnership. In the case of a declaratory decree the decree-holder has to go to the Civil Court to get the benefit of the decree and the same is the case when the Rent Controller fixes standard rent. Fom this it follows that it is not the date of the order but the date of the application with effect from which the rights of the parties are determined.

This is the view clearly expressed by the Madras High Court in no less than four cases. In AIR 1950 Mad 185 (A), a Division Bench of the Madras High Court considered the case of a landlord who applied for the fixation of fair rent and the fair rent was fixed at a figure higher than the contractual rent. The Madras High Court held that the date from which the order became effective was the date of his application and the landlord could recover the additional amount due to him from the date of his application. In AIR 1950 Mad 555 (B), the same view was expressed and Rajamannar C. J., observed:

"On an application under Section 4 of the Act, the only jurisdiction which the appellate authority and the Rent Controller have is to flx the fair rent. What rights accrue to the landlord and the tenant is not within their province on an application under Section 4."

This merely means that the Rent Controller gives a declaration to the effect that this shall be the fair rent payable by the tenant. In that case the Appellate Authority after fixing the fair rent held that it should come into operation only from the Sate of its order. The Madras High Court held that this view was entirely erroneous. In AIR 1951 Mad 222 (C) and in AIR 1951 Mad 493 (D) the same view was expressed in clear terms.

7. Our attention has also been drawn to a Division Bench decision of this Court given by Harnam Singh and Kapur JJ. in -- 'Janeshwar Das v. Bishambar Nath', AIR 1953 Punj 197 (G), in which Kapur J. observed :

"The words 'when the Controller has fixed the fair rent' as occurring in Section 6 of the East Punjab Urban Rent Restriction Act, 1949, do not connote time but they refer to a case where the Controller has fixed a fair rent and do not refer to the date on which the fair rent is fixed."

The view taken in that case was that the date of the application was the date from which the fair rent must be deemed to have been payable The question now before us was not considered directly by Kapur J. in that case, but his remarks-are more consistent with the view I am inclined to take, namely the date upon which the application is made is the date from which the fair rent becomes payable.

8. I now come to the second argument of Mr. Chiranjiva Lal that the dismissal of the application for ejectment is conclusive between the parties and that the landlord cannot by means of a suit challenge that decision which implies that no arrears of rent are due to the landlord, I have already mentioned the dates upon which the various applications before the Rent Controller were made and the date upon which the present suit was filed. The object of the present suit was not to challenge any finding of the Rent Controller. Indeed its object was to implement it On 27-3-1950 when the suit was filed the order of the Appellate Authority allowing rent at Rs. 25/-per mensem was in force and the plaintiff merely wanted to recover arrears due to him on the basis or this order.

Subsequently he also filed a suit for ejectment. The Rent Controller did not interpret the statute correctly and held that no arrears were due because the amount became payable at the date on which the Appellate Authority passed its order. In doing this the Rent Controller appears to have followed the decision of Kapur J. in --'Sheo Shankar v. G. D. Khanna (E). The District Judge acting as the Appellate Authority also followed the same decision and dismissed the application for ejectment. The Supreme Court ruling cited by Mr. Chiranjiva Lal, AIR 1951 SC 115 (F), has therefore no application to the facts of the present case. In that case the plaintiff brought a suit to challenge collaterally a decision of the Rent Controller. In the present case the suit was intended to implement rather than challenge the orders passed under the Rent Restriction Act. The landlord's subsequent application for ejectment had nothing whatsoever to do with h is suit.

9. The result therefore is that the landlord is entitled to recover rent at the rats of Rs. 25/-per mensem from 1-2-1947 because the contractual rent has been found to be the fair rent and the landlord can claim rent at the rate of Rs. 257- per mensem from the date upon which the tenant made the application because fair rent.

was fixed on his application and from 1-2-1947 because the contractual rate has not been found to be excessive. The plaintiff is therefore entitled to recover the entire amount of Rs. T25/-claimed by him. I would therefore allow this appeal and modifying the orders of the Courts below grant the plaintiff a decree for Rs. 725/- and costs throughout.

10. Bhandari, C.J.

I agree.