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Smart Summary

Concise Analytical Summary of the Opinion

Factual and Procedural Background

This petition was filed by a tenant under Section 15(5) of the East Punjab Urban Rent Restriction Act, 1949, challenging concurrent findings of fact recorded by the two courts below. The lower courts had held that the tenant was liable to be ejected from the demised premises on the ground of non-payment of rent and found that the tenant had been in arrears of rent since 1.4.1999. The courts below also found that a landlord‑tenant relationship existed between the parties and held that the Supreme Court judgment in Rakesh Wadhawan (2002) would not apply because the tenant had denied the relationship of landlord and tenant.

Evidence before the courts included a Rent Note (Exhibit A‑1) dated 18.4.1995 by which the tenant allegedly took the premises at Rs. 750 per month; the scribe of the rent note (AW‑1 Kapil Chopra) proved its execution; the landlord gave consistent testimony; and bank account records (Exhibit A‑4) showed cheques of Rs. 750 debited from the tenant's account and credited to the landlord's account. The tenant admitted signing the rent note in cross‑examination. The tenant asserted he had been paying rent to Banarsi Dass (the landlord's father) and produced three receipts dated 7.5.1999, 3.6.1999 and 5.7.1999, which the courts did not accept.

Procedurally, the petition sought relief against the ejectment findings and complained that an assessment order (and opportunity to deposit arrears) pursuant to the Supreme Court decision in Rakesh Wadhawan should have been framed by the Rent Controller. The courts below rejected that contention and dismissed the tenant's claim, and the present petition was dismissed in limine by the High Court.

Legal Issues Presented

  1. Whether the protection of framing an interim assessment order (and thereby affording the tenant an opportunity to deposit arrears) under the Supreme Court decision in Rakesh Wadhawan applies where the tenant has denied the relationship of landlord and tenant.
  2. Whether the tenant is liable to ejectment for non‑payment of rent where the existence of a rent note and documentary/bank evidence establish a landlord‑tenant relationship and arrears since 1.4.1999.
  3. Whether a tenant who denies the relationship, or claims bona fide belief that rent was payable to a third person (the landlord's father), may nonetheless insist on being allowed to deposit arrears pursuant to an assessment order after the landlord proves the relationship.

Arguments of the Parties

Petitioner's Arguments (Tenant)

  • The protection given to tenants by framing an assessment order under Rakesh Wadhawan should not be denied merely because the tenant initially denied the landlord‑tenant relationship.
  • The tenant had been paying rent to Banarsi Dass (the landlord's father) and produced receipts to that effect; therefore, there was a bona fide belief that rent was payable to the father and not the landlord‑respondent.
  • Counsel relied on Supreme Court decisions including Sheela and others v. Firm Prahlad Rai Prem Prapagh and Rakesh Wadhawan to argue that an opportunity to deposit arrears should have been afforded.

Respondent's / Court‑discerned Arguments (Landlord and Lower Courts)

  • The landlord produced the rent note (Exhibit A‑1) dated 18.4.1995, signed and proved by the scribe AW‑1, and the landlord himself gave consistent evidence, establishing the landlord‑tenant relationship.
  • Bank account statements (Exhibit A‑4) proved that cheques of Rs. 750 issued by the tenant were credited to the landlord's account, demonstrating that rent was regularly paid to the landlord until 1.4.1999, when payments stopped.
  • The receipts allegedly showing payment to the landlord's father were not accepted; the tenant had no justification for defaulting in payment to the landlord once the relationship and payments were established.
  • Lower courts relied on P&H High Court precedents holding that where the tenant denies the relationship, the Rent Controller is not obliged to frame an assessment order; therefore the tenant could not claim advantage of Rakesh Wadhawan.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Rakesh Wadhawan and others v. Jagdamba Industrial Corporation and others, 2002 (2) PLR 370 : 2002 (1) RCR (Rent) 514 (SC) Principle that a Rent Controller may frame an interim assessment order and afford an opportunity to a tenant to deposit arrears (protective measure for tenants). The Court held that the benefit of Rakesh Wadhawan would not apply in the instant case because the tenant had denied the landlord‑tenant relationship; therefore that protection was not available once the relationship was disputed by the tenant.
Ramanand Shastri v. Gian Singh, 2003 (1) RCR (Rent) 735 (P&H) : 2003 (3) Civil Court Cases 62 Held that where a tenant denies the relationship of landlord and tenant, the Rent Controller is under no obligation to pass an assessment order affording the tenant an opportunity to deposit arrears. Relied upon by the High Court and the Appellate Court to support the proposition that the tenant cannot claim the benefit of Rakesh Wadhawan after denying the landlord‑tenant relationship.
Hukma Devi…Petitioners v. Bhagwan Dass…, 2003 (1) RCR (Rent) 533 (P&H) : 2003 (2) Civil Court Cases 475 Similar P&H High Court holding that denial of landlord‑tenant relationship precludes entitlement to assessment order protection under Rakesh Wadhawan. Relied upon in conjunction with Ramanand Shastri to deny the tenant reliance on Rakesh Wadhawan and to affirm ejectment findings.
Sheela and others v. Firm Prahlad Rai Prem Prapagh, 2002 (2) PLR 66 : 2002 (1) RCR (Rent) 351 (SC) Supreme Court authority relied upon by the tenant's counsel in support of the argument that assessment orders and opportunities to deposit rent may be required in certain circumstances. Cited by the tenant's counsel; the High Court considered this reliance but concluded that the circumstances of the present case (denial of relationship) distinguished it from cases where assessment protection is appropriate.
Sankaran Pillai (Dead) by LRs. v. V.P. Venuguduswami and others, 1999 (6) SCC 396 : 1999 (2) RCR (Rent) 173 (SC) Holds that a tenant who denies the landlord‑tenant relationship and pursues specific performance cannot later refuse to deposit arrears of rent; a post‑litigation plea of mistaken belief as to deposit was rejected as not bona fide. The Court invoked this Supreme Court principle to reject the tenant's after‑thought or mistaken‑belief plea and to support refusal to allow the tenant to escape deposit obligations after denying the relationship.

Court's Reasoning and Analysis

The Court engaged in a fact‑based and precedent‑guided analysis, summarized step‑by‑step as follows:

  1. Evaluation of Primary Evidence: The Court observed that the rent note (Exhibit A‑1) dated 18.4.1995, showing possession on rent at Rs. 750 per month, was signed by the tenant and was proved by the scribe (AW‑1). The landlord corroborated the same as his own witness. The tenant admitted signing the rent note in cross‑examination. On this basis the existence of a rent agreement between the parties was found established.
  2. Documentary Bank Evidence: The Court accepted the bank account records (Account Opening Form and statement, Exhibit A‑4) proved by AW‑3, Surjit Singh, which showed several cheques for Rs. 750 issued by the tenant and credited to the landlord's account, confirming that rent was regularly paid to the landlord until payments ceased effective 1.4.1999.
  3. Rejection of Alternate Payment Claim: Although the tenant claimed to have paid rent to Banarsi Dass (the landlord's father) and produced three receipts, the Court found that claim unsubstantial in light of the rent note and bank evidence showing payments to the landlord; thus the receipts were not accepted.
  4. Legal Principle on Assessment Orders: The Court confronted the legal question whether the Rent Controller was obliged to frame an interim assessment order (so as to allow deposit of arrears) in the circumstances of this case. Relying on P&H High Court decisions (Ramanand Shastri and Hukma Devi) and the Supreme Court pronouncement in Sankaran Pillai, the Court reasoned that a tenant cannot first deny the landlord‑tenant relationship and later claim the benefit of an assessment order. The Court described such a tactic as unfair and creating an imbalance of equities — effectively allowing the tenant to litigate the relationship and, if the landlord proves the relationship, to then obtain relief meant for tenants who had conceded the relationship.
  5. Application of Precedents and Rejection of Bona Fide Claim: The Court accepted the principle that post‑litigation pleas of mistaken belief or after‑thought excuses (as rejected in Sankaran Pillai) do not constitute sufficient cause to condone non‑deposit of arrears. The Court therefore rejected the tenant's contention of bona fide belief that rent was payable to the father, noting the continuous payments to the landlord and the absence of any assignment, impleadment order in favour of the father (the father's application for impleadment was dismissed on 12.5.2001), or suit substituting the landlord.
  6. Conclusion on Relief: Given the factual findings (rent note, documentary evidence of payments, cessation of payment from 1.4.1999) and the legal position that denial of relationship precludes benefit of interim assessment, the Court concluded that the petition lacked merit and dismissed it in limine.

Holding and Implications

Holding: The petition was dismissed in limine. The High Court affirmed the approach of the courts below that, on the facts proved (existence of a signed rent note, documentary evidence of payments, and arrears from 1.4.1999), the tenant was liable for ejectment for non‑payment of rent and was not entitled to the interim assessment protection.

Implications: The direct consequence of the decision is that the tenant's challenge failed and the order liable to eject the tenant for non‑payment of rent stands; the tenant cannot invoke an assessment order to deposit arrears after denying the landlord‑tenant relationship. The opinion does not purport to lay down a new general precedent beyond applying and reaffirming existing authorities (Ramanand Shastri, Hukma Devi and Sankaran Pillai) to the facts of this case.

Disposition: Petition dismissed.

Show full summary ...

    Yashpal Singla v. Vijay Kumar

    M.M Kumar, J. — This is a tenant's petition filed under Section 15(5) of the East Punjab Urban Rent Restriction Act, 1949 (hereinafter referred to as the ‘Act’) challenging concurrent findings of fact recorded by both the courts below holding that the tenant-petitioner is liable to be ejected from the demised premises on the ground of non-payment of rent. Both the courts below have found that the tenant-petitioner is in arrears of rent since 1.4.1999 It has further been held that relationship of landlord and tenant existed between the parties and that the judgment of the Supreme Court in Rakesh Wadhawan and others v. Jagdamba Industrial Corporation and others, 2002 (2) PLR 370 : 2002 (1) RCR (Rent) 514 (SC) would not be applicable as the tenant-petitioner had denied the relationship of landlord and tenant. Reliance has been placed on two judgments of this Court in the cases of Ramanand Shastri v. Gian Singh, 2003 (1) RCR (Rent) 735 (P&H) : 2003 (3) Civil Court Cases 62 and Hukma Devi…Petitioners v. Bhagwan Dass…, 2003 (1) RCR (Rent) 533 (P&H) : 2003 (2) Civil Court Cases 475, wherein it was been held that when the tenant has denied the relationship of landlord and tenant, then the Rent Controller would be under no obligation to pass an assessment order granting an opportunity to the tenant-petitioner to deposit the arrears of rent.

    2. Mr. G.S Sandhawalia, learned counsel for the petitioner, has argued that in the instant case, the protection accorded to the tenant by framing an assessment order in pursuance of the judgment in Rakesh Wadhawan's case (supra) could not be denied merely because the relationship has been denied by the tenant-petitioner. According to the learned counsel the tenant-petitioner has been paying rent to Banarsi Dass, father of the landlord-respondent. According to the learned counsel, the tenant-petitioner has produced on record the receipts of rent paid to Banarsi Dass, father of the landlord-respondent. He has further submitted that in any case the opportunity in pursuance of the judgment in Rakesh Wadhawan's case (supra) should have been afforded to the tenant-petitioner after the findings are recorded by the Rent Controller that there is relationship of landlord and tenant between the parties and an assessment order should have been framed calling upon the tenant-petitioner to make payment of rent, failing which he was to face ejectment. In support of his submissions, the learned counsel has placed reliance on two judgments of the Supreme Court in Sheela and others v. Firm Prahlad Rai Prem Prapagh, 2002 (2) PLR 66 : 2002 (1) RCR (Rent) 351 (SC) and Rakesh Wadhawan's case (supra).

    3. Having heard the learned counsel at a considerable length, I am of the considered view that this petition is devoid of any merit because it has been proved on the record that the tenant-petitioner had executed Rent Note Exhibit A-1 vide which the tenant-petitioner had taken on rent the demised premises from the landlord-respondent at the rate of Rs. 750/- per month on 18.4.1995 The rent note is duly signed by him. In support of the rent note, AW-1 Kapil Chopra, who had scribed the rent note, was produced. He had duly proved the execution of the rent note by the landlord in favour of the tenant-petitioner. Same stand has been taken by the landlord-respondent when he himself appeared as his own witness. Even the execution of the rent note by the tenant-petitioner has not been denied. The tenant-petitioner has admitted to have signed the rent note in his cross-examination. On the basis for the aforementioned evidence, it has been found that the rent note was duly executed between the parties. The relationship of landlord and tenant is substantiated from the accounts statement from their bank accounts. Surjit Singh, Clerk, Oriental Bank of Commerce, Sirhind AW-3 has proved the Account Opening Form of the tenant-petitioner and copy of the statement of account has been proved as Exhibit A-4 which shows that several cheques had been issued in favour of landlord-respondent for an amount of Rs. 750/- which have been debited from the account of the tenant-petitioner and those cheques were credited to the account of the landlord-respondent. Therefore, it is evident that the tenant-petitioner had been paying rent regularly to the landlord-respondent. He voluntarily stopped paying rent to the landlord-respondent w.e.f 1.4.1999

    4. It is further clear that the plea of the tenant-petitioner that he, in fact, is tenant of the father of the landlord-respondent, was considered to be without any substance on account of the rent note dated 18.4.1995 The non-payment of arrears of rent with effect from 1.4.1999 has been established and three receipts issued by Banarsi Dass accepting the rent dated 7.5.1999, 3.6.1999 and 5.7.1999 were not accepted as it has been found that tenant-petitioner has been continuously paying rent since 1995 to the landlord-respondent and there was no question of making payment of rent to Banarsi Dass, the father of the landlord-respondent.

    5. The plea with regard to affording of an opportunity to deposit the arrears of rent has been rejected by both the Courts below by placing reliance on two judgments of this Court in Ramanand Shastri's case and Hukma Devi's case (supra). The view of the learned Appellate Court on the basis of the aforementioned two judgments reads as under :

    “The Hon'ble High Court in the said judgment while referring to the observations in Rakesh Wadhawan's case held that the said observations would not apply where the status of a party has not been accepted as a landlord by the other party who denies his status to be his tenant, and consequently dismissed the revision petition filed by the tenant. From the perusal of aforesaid two judgments of our Hon'ble High Court, I find that an exception has virtually been carved out in Rakesh Wadhawan's case to the effect that where a party disputes his relationship with the other party being that of a tenant and landlord, then it does not lie in his mouth to say that he had not been given an opportunity to tender rent. Consequently, in view of the said judgments i.e 2003 Civil Court Cases 62, Ramanand Shastri v. Gian Singh and 2003 (2) Civil Court Cases 475, Hukma Devi…Petitioners v. Bhagwan Dass…, the appellant cannot seek any advantage from Rakesh Wadhawan's case. As such this Court having upheld the findings of the learned Rent Controller on issues No. 1 and 2 regarding relationship of the parties and regarding tenant being in arrears of rent, the inevitable consequence is that the tenant has rendered himself liable for ejectment. Consequently, the findings of the learned Rent Controller on issue No. 4 are perfectly justified and do not call for any interference and the same are hereby affirmed in favour of the applicant and against the tenant.”

    6. The arguments of the learned counsel that the assessment order should have been framed by the Rent Controller as it is a duty enjoined upon him under Section 13(2) of the Act, cannot be accepted because a tenant cannot firstly deny the relationship and then force the landlord to lead evidence establishing the relationship. It would be unfair thereafter to expect the Rent Controller to frame an assessment order giving provisional rate of rent and then ask for payment of arrears of rent in accordance with assessment order. A tenant who denies the relationship despite the existence of a rent note, does so at his own peril. In the case of Sankaran Pillai (Dead) by LRs. v. V.P Venuguduswami and others, 1999 (6) SCC 396 : 1999 (2) RCR (Rent) 173 (SC), the Supreme Court has taken the view that in a case where the tenant has denied the relationship of landlord and tenant on the basis of an agreement to purchase the suit property and pursued his remedy of specific performance, cannot refuse to deposit the arrears of rent as required by Section 11 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. The tenant in that case had lost the litigation concerning specific performance of the contract to purchase the suit property upto the Supreme Court. Thereafter, he had set up the plea that he did not deposit the rent under a mistaken belief and sought condonation on that basis. Rejecting the aforementioned plea on the ground of lack of bona fide, their Lordships observed as under :—

    “….It appears that, after the Supreme Court affirmed the dismissal of the suit filed by the tenant for specific performance of the agreement, the tenant has now come forward with a plea that since he under mistaken belief did not deposit arrears and month to month rent and, therefore, default may be condoned. As noticed earlier, this plea of non-depositing of arrears of rent on account of sufficient cause was not a case set up by the tenant before the Rent Controller, the appellate authority and the High Court. The tenant's consistent stand was that he was not required under law to deposit any arrears of rent and month to month rent as he himself was the landlord of the premises. This plea of the tenant now advanced is an after-thought and is not bona fide and, therefore, we do not find it to constitute “sufficient cause” as to condone the non-deposit of arrears and also month to month rent which was required to be deposited by the tenant. We, therefore, do not find any merit in the submission of the learned counsel for the appellants.”

    7. Once the tenant has denied the relationship of landlord and tenant, then there would be hardly any justification for the Rent Controller to frame an assessment order in pursuance to the provisions of proviso of Section 13(2)(1) of the Act as interpreted by the Supreme Court in the case of Rakesh Wadhawan (supra). After the evidence has been led by the landlord showing the relationship of landlord-tenant, then there would be no justification to permit the tenant to deposit the arrears of rent in accordance with the interim assessment order of rent. Such an approach would create imbalance of equities and would hardly be justified. Therefore, I have no hesitation in rejecting the argument raised by the learned counsel and reiterate my view taken in the cases of Ramanand Shastri (supra) and Hukama Devi (supra).

    8. The other argument that it is not a simple case of denial of relationship but the denial was a based on a bona fide belief that the rent was payable to the father of the landlord-respondent can also not be accepted because the tenant-petitioner has been consistently making payment of rent to the landlord-respondent. The tenant-petitioner could not take any advantage of litigation initiated by Vijay Kumar against his father Banarsi Dass merely on the ground that the learned Additional District Judge had vacated the status quo order on 27.1.1999 which was granted by the Civil Judge on 4.6.1996 That order did not any manner indicated that the tenant-petitioner has changed his relationship with the landlord-respondent. There is no direction with regard to assignment of the tenant by substituting his landlord nor any such effort was made by the tenant-petitioner by filing a suit. It is also pertinent to mention that the application filed by Banarsi Dass under Order 1 Rule 10 of the Code for impleadment as a party in the ejectment petition was also dismissed on 12.5.2001 Even otherwise, the adjudication between the landlord-respondent and his father based on title dispute has got nothing to do with the relationship of the tenant and landlord. Therefore, there is no justification for the tenant-petitioner to commit the default in making payment of rent. The argument is without any merit and merits rejection.

    For the reasons recorded above, this petition fails and the same is dismissed in limine.

    Petition dismissed.

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    Comments

    Yashpal Singla v. Vijay Kumar
    (Apr 22, 2004)