Aftab Alam, J.— Leave granted. The Government of Maharashtra, the appellant before us, is in occupation of an area of 9000 sq ft (11,050 sq ft as per the affidavit-in-reply filed by the appellant) comprising the sixth floor of a building on a monthly rental of Rs 5236.58, besides water charges at the rate of Rs 515.35 per month.
2. The suit premises, used for housing the Office of the Registrar, Cooperative Societies is situate at Fort, opposite GPO (near CST Railway Station) in the heart of the city of Mumbai. The appellant is in occupation of the suit premises since 1966. At that time the building belonged to the Maharaja of Travancore. Respondents 1 to 3 purchased it under a deed of assignment dated 5-5-1982 and stepped into the shoes of the landlord.
3. The appellant suffered a decree of ejectment passed by the Court of Small Causes on 30-6-2003 in RAE & R Suit No. 1233/3730 of 1986 on grounds of (i) default in payment of taxes and water charges as stipulated under Section 13(3)(a); and (ii) reasonable and bona fide need of the landlords, Respondents 1 to 3 for their own use and occupation in terms of Section 13(1)(g) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (“the Bombay Rent Act” or “the Act”, hereinafter). Its appeal (No. 752 of 2003) against the decree was dismissed by the Division Bench of the Small Cause Court by judgment and order dated 28-4-2005.
4. The appellant initially filed a writ petition [WP (C) No. 7361 of 2005] seeking to challenge the orders of ejectment. The Bombay High Court declined to entertain it on the ground that the appellant had a remedy available to it under the Act itself. It, accordingly, disposed of the writ petition by order dated 15-3-2007 leaving it open to the appellant to file a civil revision application as provided under Section 35-F(2) of the Act. The appellant then moved the High Court in Civil Revision Application No. 78 of 2007 challenging the orders of its ejectment.
5. The High Court admitted the civil revision on 10-12-2007 and issued rule on interim relief regarding stay of execution of the decree. Later on, after hearing the parties the Court stayed the execution of the decree by order dated 14-10-2008 subject, however, to the condition that the appellant would deposit a sum of Rs 5,40,000 every month commencing from the date of the decree passed by the trial court. The Court directed that the amount in arrears should be deposited by 10-1-2009 and from that date the future deposits for every month should be made by the tenth of the next succeeding month.
6. The High Court, however, did not allow the landlords to take away the money but further directed that the deposits would be ad hoc and subject to further order in the revision or in any other appropriate proceeding. It also directed the office to invest the amount(s), in case deposited by the appellant, in a nationalised bank, initially for a period of one year and then for further periods of one year each.
7. The appellant finds the condition on which stay is granted highly onerous. But the respondents maintain that the Court has been very liberal with the appellant and the amount of monthly deposit fixed by the Court is far less than the current market rent in that area.
8. Of late, orders are coming to this Court where, in cases arising from ejectment proceedings, the High Courts, with a view to strike a balance between the competing interests of the landlord and the tenant, pass interim orders asking the tenant to pay to the landlord or deposit in Court, as monthly rent, certain sum fixed by it (that, according to the High Court, should be the reasonable market rent for the tenanted premises), far in excess of the existing monthly rent.
9. In the instant case, while it was at the threshold, it was stated before this Court that two of its Division Bench decisions, one in Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd. (2005) 1 SCC 705 and the other in Niyas Ahmad Khan v. Mahmood Rahmat Ullah Khan (2008) 7 SCC 539 had taken conflicting views on the correctness of such orders passed by the High Court. The case was, accordingly, directed to be placed before a three-Judge Bench and that is how it came to be heard before us.
10. It may be stated at the outset that just a little scrutiny revealed that there was no conflict between Atma Ram Properties (2005) 1 SCC 705 and Niyas Ahmad Khan (2008) 7 SCC 539. In Atma Ram Properties (2005) 1 SCC 705 the tenant, having lost before the Rent Controller preferred an appeal before the Rent Control Tribunal. The Tribunal stayed the tenant's eviction but subject to the condition that he would deposit in court Rs 15,000 per month, in addition to the contractual rent that might be paid directly to the landlord. The deposits made in the court were not permitted to be withdrawn by any of the parties until the appeal was finally decided. The tenant challenged the condition attached to the stay order before the High Court in a petition filed under Article 227 of the Constitution of India. The High Court allowed the writ petition and set aside the condition imposed by the Tribunal. The effect of the order of the High Court was that during the pendency of the appeal before the Tribunal the tenant would continue to remain in occupation of the suit premises “on payment of an amount equivalent to the contractual rate of rent”. Against the High Court order the landlord came to this Court in appeal. This Court allowed the appeal, set aside the High Court order and restored the order passed by the Tribunal.
11. In Niyas Ahmad Khan (2008) 7 SCC 539, the position was quite different. The landlord's application for eviction of the tenant on grounds of personal necessity was turned down by the prescribed authority. The order of the prescribed authority was confirmed by the appellate authority. The landlord challenged the orders passed by the two authorities under the Rent Control Act in a writ petition filed before the Allahabad High Court and while admitting the writ petition the Court gave an interim direction to the tenant to pay rent at the rate of Rs 12,050 per month (in place of the contractual monthly rent of Rs 150). The Court further directed that if the rent fixed by it was not paid for two consecutive months the landlord could evict the tenant by coercive means taking the aid of police.
12. In appeal by the tenant, this Court naturally frowned upon the interim order passed by the High Court and in para 10 of the decision observed as follows: (Niyas Ahmad Khan case (2008) 7 SCC 539)
“10. To sum up, in writ petitions by landlords against rejection of eviction petitions, there is no scope for issue of any interim direction to the tenant to pay higher rent. But in writ petitions by tenants against grant of eviction, the High Court may, as a condition of stay, direct the tenant to pay higher rent during the pendency of the writ petition. This again is subject to two limitations. First, the condition should be reasonable. Second, there should not be any bar in the respective State rent control legislation in regard to such increases in rent. Be that as it may.”
13. We, thus, find no inconsistency, much less any conflict in the decisions of this Court in Atma Ram Properties (2005) 1 SCC 705 and Niyas Ahmad Khan (2008) 7 SCC 539. The decision in Niyas Ahmad Khan (2008) 7 SCC 539 has no application to the facts of the present case and it seems to be covered by the decision in Atma Ram Properties (2005) 1 SCC 705.
14. However, Mr U.U Lalit, Senior Advocate appearing for the appellant, submitted that the decision in Atma Ram Properties (2005) 1 SCC 705 would apply only to cases under the Delhi Rent Control Act and shall have no application to tenancies governed by the provisions of the Bombay Rent Act.
15. Mr Lalit submitted that the Delhi Rent Control Act defined “tenant” in a way as to exclude a person against whom a decree of eviction was passed. Section 2(l) of the Delhi Rent Control Act, 1958 defined “tenant” as:
“2. (l) ‘tenant’ means….
… but does not include,—
(A) any person against whom an order or decree for eviction has been made, except where such decree or order for eviction is liable to be reopened under the proviso to Section 3 of the Delhi Rent Control (Amendment) Act, 1976 (18 of 1976);”
(emphasis supplied)
16. Mr Lalit submitted that under the Delhi Rent Control Act a tenant suffering a decree or order of eviction lost the status of “tenant” and was consequently stripped of all the protection (including against increase in rent) provided by the Rent Control Act and in such a case it would be open to the appellate or the revisional authority to enhance the monthly rent payable by him as a condition for granting stay of execution of the decree or order as held in Atma Ram Properties (2005) 1 SCC 705. This exclusionary clause in the definition of tenant was a special feature of the Delhi Rent Act and the Rent Acts of some other States e.g Madhya Pradesh, Rajasthan, etc. But the position under the Bombay Rent Act was materially different. In the definition of “tenant” in the Bombay Act there was no exclusionary clause. Moreover, in the Bombay Rent Act there were a number of provisions creating an express bar against any enhancement of rent.
17. Mr Lalit then took us through various provisions of the Bombay Rent Act. He referred to Section 5(11) defining “tenant” and emphasised that this definition did not have any exclusionary clause as in Section 2(l) of the Delhi Act.
18. Section 5(11) of the Bombay Rent Act reads as follows:
“5. (11) ‘tenant’ means any person by whom or on whose account rent is payable for any premises and includes—
(a) such sub-tenants and other persons as have derived title under a tenant before the 1st day of February, 1973;
(aa) any person to whom interest in premises has been assigned or transferred as permitted or deemed to be permitted, under Section 15;
(b) any person remaining, after the determination of the lease, in possession, with or without the assent of the landlord, of the premises leased to such person or his predecessor who has derived title before the first day of February, 1973;
(bb) such licensees as are deemed to be tenants for the purposes of this Act by Section 15-A;
(bba) the State Government, or as the case may be, the government allottee, referred to in sub-clause (b) of clause (1-A), deemed to be a tenant, for the purposes of this Act by Section 15-B;
(c)(i) in relation to any premises let for residence, when the tenant dies, whether the death has occurred before or after the commencement of the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Act, 1978, any member of the tenant's family residing with the tenant at the time of his death or, in the absence of such member, any heir of the deceased tenant, as may be decided in default of agreement by the Court;
(ii) in relation to any premises let for the purposes of education, business, trade or storage, when the tenant dies, whether the death has occurred before or after the commencement of the said Act, any member of the tenant's family using the premises for the purposes of education or carrying on business, trade or storage in the premises, with the tenant at the time of his death, or, in the absence of such member, any heir of the deceased tenant, as may be decided in default of agreement by the court.
Explanation.—The provisions of this clause for transmission of tenancy shall not be restricted to the death of the original tenant, but shall apply, and shall be deemed always to have applied, even on the death of any subsequent tenant, who becomes tenant under these provisions on the death of the last preceding tenant.”
(emphasis added)
19. Mr Lalit then referred to the definition of “standard rent” as contained in Section 5(10) of the Act. The provision is as under:
“5. (10) ‘standard rent’ in relation to any premises means,—
(a) where the standard rent is fixed by the Court and the Controller respectively under the Bombay Rent Restriction Act, 1939, or the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944, such standard rent; or
(b) when the standard rent is not so fixed,—
subject to the provisions of Section 11,
(i) the rent at which the premises were let on the first day of September, 1940, or
(ii) where they were not let on the first day of September, 1940, the rent at which they were last let before that day, or
(iii) where they were first let after the first day of September, 1940, the rent at which they were first let, or
(iii-a) notwithstanding anything contained in para (iii), the rent of the premises referred to in sub-section (1-A) of Section 4 shall, on expiry of the period of five years mentioned in that sub-section, not exceed the amount equivalent to the amount of net return of fifteen per cent, on the investment in the land and building and all the outgoings in respect of such premises; or
(iv) in any of the cases specified in Section 11, the rent fixed by the court;”
(emphasis supplied)
Mr Lalit submitted that by virtue of Section 5(10)(b) the standard rent under the Bombay Rent Act was attached to the premises. It was, therefore, constant and not subject to any revision on change in tenancy. In other words, even if the appellant ceased to be a tenant and is thrown out, the respondents can induct another tenant only on the same “standard rent”, that is, Rs 5236.58 besides water charges at the rate of Rs 515.35 per month.
20. Mr Lalit further submitted that except in circumstances as provided under Section 10 (increase in rent on account of payment of rates, etc.); Section 10-A (increase in rent in respect of premises that were let out on or before 1-9-1940); Section 10-B (saving increase in rent under the previous provisions from the bar of Section 7); and Section 11 (increase in rent resulting from “standard rent” fixed by the court in certain cases) any increment of rent was expressly barred under Section 7 of the Act.
21. Mr Lalit submitted that in view of Section 5(11) of the Act the appellant continued to be a tenant within the meaning of the Act notwithstanding the decrees of ejectment passed by the Small Cause Court. It, therefore, followed that the appellant enjoyed all the protections provided under the Act and in the light of the provisions referred to above any direction to pay, as monthly rent, any amount in excess of the standard rent was contrary to law and unsustainable.
22. Before proceeding to examine Mr Lalit's submissions we may observe that earlier a three-Judge Bench of this Court in Malpe Vishwanath Acharya v. State of Maharashtra (1998) 2 SCC 1 found and held that the provisions of the Bombay Rent Act relating to the determination and fixation of “standard rent” can no longer be considered to be reasonable. The only reason why, despite the finding, the Court did not strike down those provisions was that the Bombay Rent Act was to come to an end on 31-3-1998 and the Court was informed that the State was in the process of enacting a new Rent Control Act that would be just and fair and would follow the National Model Law that was circulated by the Central Government in 1992. After the decision of the Court in Malpe Vishwanath Acharya (1998) 2 SCC 1 the Bombay Rent Act was indeed replaced by the Maharashtra Rent Control Act, 1999 that came into force with effect from 31-3-2000.
23. But Mr Rohatgi, learned Senior Counsel appearing for the respondents, strongly contended that the Maharashtra Rent Control Act completely belied the hopes expressed by the Court under which it had refrained from striking down the offending provisions in the Bombay Rent Act. Mr Rohatgi submitted that the Maharashtra Rent Control Act merely brought about some cosmetic changes but retained the substance of the earlier Bombay Rent Act.
24. Referring to the definition of “standard rent” in Section 7(14) of the Maharashtra Rent Control Act, Mr Rohatgi submitted that it merely shifted the date from 1-9-1940 to 1-10-1987 for pegging the standard rent which continued to be attached to the premises and was not amenable to any revision on change of tenancy.
25. The issue of reasonableness of the provisions of the Maharashtra Rent Control Act, 1999 or the Bombay Rent Act does not arise in this case and, therefore, we refrain from making any observations in that regard but we do feel that the reasonableness or otherwise of the provisions of the Maharashtra Rent Control Act may have to be seriously examined by this Court in an appropriate case.
26. Coming back to the case in hand, Mr Lalit argued that in spite of the decrees of eviction passed by the competent courts, the appellant continued to be a “tenant” within the meaning of the Bombay Rent Act until, in execution of the decree it was physically evicted from the suit premises. The tenancy did not come to end on the passing of the decree but would continue as long as the appellant was in actual physical possession of the suit premises; a priori it enjoyed all the protection under the Bombay Rent Act and specially those laying down the bar against any increase in rent.
27. In support of the contention Mr Lalit relied upon two sets of decisions, one on the issue of heritability of tenancy under the Rent Acts and the other on the question whether a tenant could be evicted on the basis of a decree made under the general law in case after the decree was passed the rented premises came to be covered by the Rent Act.
28. The first set comprises three decisions of this Court in (i) Damadilal v. Parashram (1976) 4 SCC 855, (ii) Ganpat Ladha v. Sashikant Vishnu Shinde (1978) 2 SCC 573, and (iii) Gian Devi Anand v. Jeevan Kumar (1985) 2 SCC 683. The second set also has three decisions. Those are (i) Mani Subrat Jain v. Raja Ram Vohra (1980) 1 SCC 1, (ii) H. Shiva Rao v. Cecilia Pereira (1987) 1 SCC 258, and (iii) Dilip v. Mohd. Azizul Haq (2000) 3 SCC 607.
29. Dealing with the three decisions in the first set, Mr Lalit submitted that Damadilal (1976) 4 SCC 855 fully supported his contention. The decision in Ganpat Ladha (1978) 2 SCC 573 took a contrary view but later in Gian Devi Anand (1985) 2 SCC 683 a Constitution Bench overruled Ganpat Ladha (1978) 2 SCC 573 and approved Damadilal (1976) 4 SCC 855, thus reinforcing the submission made on behalf of the appellant.
30. Damadilal case (1976) 4 SCC 855 arose under the Madhya Pradesh Accommodation Control Act, 1961. The suit premise was a house in a bazar that was let out to the two defendants (the tenants) for business purposes. The question that arose in the case was whether on the death of the two tenants during the pendency of their second appeal before the High Court, their respective heirs and legal representatives had the right to get themselves substituted in place of the original appellant tenants and pursue the reliefs sought for by them. The High Court permitted substitution and eventually allowed the second appeal, setting aside the eviction decrees passed by the courts below. The High Court judgment was challenged before this Court in appeal.
31. One of the grounds in Damadilal case (1976) 4 SCC 855 on which the High Court judgment was assailed by the appellant landlords was that after their contractual tenancy was determined the two original tenants were reduced to the status of statutory tenants having no heritable interest in the demised premises and on their death the right to prosecute their appeal did not survive for their heirs and legal representatives. In support of the contention reliance was placed on two earlier decisions of the Court in Anand Nivas (P) Ltd. v. Anandji Kalyanji's Pedhi AIR 1965 SC 414, (1964) 4 SCR 892 (arising under Bombay Rents, Hotel and Lodging House Rates Control Act, 1947) and Jagdish Chander Chatterjee v. Shri Kishan (1972) 2 SCC 461, (1973) 1 SCR 850 [arising under the Rajasthan Premises (Control of Rent and Eviction) Act, 1950]. A three-Judge Bench of this Court in Damadilal case (1976) 4 SCC 855 rejected the contention raised on behalf of the appellants.
32. The decision in Damadilal (1976) 4 SCC 855 pointed out that the term “statutory tenancy” was borrowed from the English Rent Acts and along with the expression certain legal notions, peculiar to the English common law, had also found their way in some Indian decisions though those concepts had no basis in the Rent Acts of this country. The Court observed that the courts in England had held that a statutory tenant had no estate or property in the occupied premises since he retained possession by virtue of the Rent Act(s) and not as being entitled to tenancy. It was said that he had only a personal right to remain in occupation, the statutory right of “irremovability and nothing more”. The position in this country, however, was quite different.
33. In para 11 of the decision it was observed as follows: (Damadilal case (1976) 4 SCC 855)
“11. We find it difficult to appreciate how in this country we can proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute, has no right of property but only a personal right to remain in occupation, without ascertaining what his rights are under the statute. The concept of a statutory tenant having no estate or property in the premises which he occupies is derived from the provisions of the English Rent Acts. But it is not clear how it can be assumed that the position is the same in this country without any reference to the provisions of the relevant statute. Tenancy has its origin in contract. There is no dispute that a contractual tenant has an estate or property in the subject-matter of the tenancy, and heritability is an incident of the tenancy. It cannot be assumed, however, that with the determination of the tenancy the estate must necessarily disappear and the statute can only preserve his status of irremovability and not the estate he had in the premises in his occupation. It is not possible to claim that the ‘sanctity’ of contract cannot be touched by legislation. It is therefore necessary to examine the provisions of the Madhya Pradesh Accommodation Control Act, 1961 to find out whether the respondents' predecessors-in-interest retained a heritable interest in the disputed premises even after the termination of their tenancy.”
34. Damadilal (1976) 4 SCC 855 then went on to examine Section 2(i) of the Madhya Pradesh Accommodation Control Act that defined “tenant” and Section 14 that provided for restrictions on sub-letting and held that those provisions supported the view taken by the Court that the statutory tenant retained as much interest in the demised premises as a contractual tenant.
35. Ganpat Ladha case (1978) 2 SCC 573 arose under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and the premises from which the tenant was sought to be evicted was a shop let out to him for business purpose. The trial court and the appellate court decreed the suit on the findings that the tenant had failed to make payment of the arrears of rent even after a valid notice of demand was given to him by the landlord and further that he was not entitled to the protection of Section 12(3)(b) of the Act. The tenant challenged the decrees passed by the courts below before the High Court in an application under Article 227 of the Constitution. During the pendency of the writ petition before the High Court the tenant died and his son was impleaded in his place to pursue the reliefs prayed for in the writ petition. The High Court eventually allowed the writ petition on the ground that despite the default in payment of arrears of rent, the trial court could exercise its discretion in favour of the tenant and decline to pass a decree of eviction. The matter finally came to this Court in appeal preferred by the landlord. A three-Judge Bench of the Court allowed the appeal inter alia holding that after the death of the original tenant his son could not claim to be a tenant within the meaning of the Act.
36. The decision in Ganpat Ladha (1978) 2 SCC 573 is based entirely on interpretation of the definition of “tenant” under the Bombay Rent Act. The Court noticed Section 5(11) defining tenant and reproduced the section insofar as it was relevant to the case as follows:
“5. (11) ‘tenant’ means any person by whom or on whose account rent is payable for any premises and includes—
(a)-(b)***
(c) any member of the tenant's family residing with him at the time of his death as may be decided in default of agreement by the court;”
(emphasis supplied)
37. The Court held that Section 5(11)(c) restricted the heritability of tenancy only to a member of the tenant's family who might be residing with him at the time of his death. This in turn implied that heritability of tenancy was confined only to residential premises and the benefit could not be extended to business premises. The Court held as follows: (Ganpat Ladha case (1978) 2 SCC 573)
“7. … This principle underlying the enactment of Section 5(11)(c) also goes to indicate that it is in respect of residential premises that the protection of that section is intended to be given. We can appreciate a provision being made in respect of business premises that on the death of a tenant in respect of such premises, any member of the tenant's family carrying on business with the tenant in such premises at the time of his death shall be a tenant and the protection of the Rent Act shall be available to him. But we fail to see what purpose the legislature could have had in view in according protection in respect of business premises to a member of the tenant's family residing with him at the time of his death. The basic postulate of the protection under the Rent Act is that the person who is sought to be protected must be in possession of the premises and his possession is protected by the legislation. But in case of business premises, a member of the family of the tenants residing with him at the time of his death may not be in possession of the business premises;…”
38. In Ganpat Ladha (1978) 2 SCC 573 this Court approved the decision of the Gujarat High Court in Parubai Manilal Brahmin v. Baldevdas Zaverbhai Tapodhan (1964) 5 Guj LR 563 and in support of the view taken by it also cited the amendment introduced by the Gujarat Legislature in Section 5(11)(c) of the Bombay Rent Act. It needs to be stated here that in Ganpat Ladha (1978) 2 SCC 573 the earlier decision in Damadilal (1976) 4 SCC 855 was not brought to the notice of the Court and the Court did not go into the question whether a tenant on his death left behind any heritable estate or interest in the tenanted premises.
39. Gian Devi (1985) 2 SCC 683 is a decision by a Constitution Bench of five Judges. The case arose under the Delhi Rent Control Act, 1958 and the tenanted premises was once again a shop. The question that the Court framed for its consideration was as under:
“5. … To state it more precisely, the question is whether the heirs of a deceased tenant whose contractual tenancy in respect of commercial premises has been determined, are entitled to the same protection against eviction afforded by the Act to the tenant.”
40. In Gian Devi case (1985) 2 SCC 683, the Constitution Bench considered both the earlier decisions in Damadilal (1976) 4 SCC 855 and Ganpat Ladha (1978) 2 SCC 573. It also considered the earlier seven-Judge Bench decision in V. Dhanapal Chettiar v. Yesodai Ammal (1979) 4 SCC 214, (1980) 1 SCR 334 besides several other decisions of the Court.
41. In Gian Devi (1985) 2 SCC 683, as in Damadilal (1976) 4 SCC 855, the Court observed that the expression “statutory tenant” was used in the English Rent Acts and the concept that a statutory tenant had no estate or interest in the demised premises was peculiar to the English law. It had no basis in the provisions of the Rent Acts of the different States of this country.
42. Referring to the earlier decision in Damadilal (1976) 4 SCC 855 in para 25 of the judgment the Court observed as follows: (Gian Devi case (1985) 2 SCC 683)
“25. This Court has very aptly observed in Damadilal case (1976) 4 SCC 855 that it cannot be assumed that with the determination of the tenancy, the estate must necessarily disappear and the statute can only preserve the status of irremovability and not the estate he has in the premises in his occupation;…”
43. In the same paragraph, the decision reproduced Section 2(l) of the Delhi Rent Control Act that defined tenant both as it stood prior to and after its amendment by Act 18 of 1976 and observed as follows: (Gian Devi case (1985) 2 SCC 683)
“25. … It is, therefore, clear from the definition of tenant, whether in the original Act or in the amended Act, that the tenant within the meaning of the definition of the term in the Act includes any person continuing in possession after the termination of his tenancy. It will be seen that the definition of tenant in Madhya Pradesh Accommodation Control Act, 1961 on which the decision in Damadilal case (1976) 4 SCC 855 mainly turns, is similar to the definition of tenant as given in the Delhi Act in the sense that the tenant under both the Acts includes for the purpose of Rent Act any person continuing in possession after the termination of the tenancy.”
(emphasis added)
44. In this regard in para 31 of the decision, it observed as follows: (Gian Devi case (1985) 2 SCC 683)
“31. … The very premise on the basis of which the argument is advanced, is, in our opinion, unsound. The termination of the contractual tenancy in view of the definition of tenant in the Act does not bring about any change in the status and legal position of the tenant, unless there are contrary provisions in the Act; and, the tenant notwithstanding the termination of tenancy does enjoy an estate or interest in the tenanted premises. This interest or estate which the tenant under the Act despite termination of the contractual tenancy continues to enjoy creates a heritable interest in the absence of any provision to the contrary. We have earlier noticed the decision of this Court in Damadilal case (1976) 4 SCC 855. This view has been taken by this Court in Damadilal case (1976) 4 SCC 855 and in our opinion this decision represents the correct position in law. The observations of this Court in the decision of the seven-Judge Bench in V. Dhanapal Chettiar v. Yesodai Ammal (1979) 4 SCC 214, (1980) 1 SCR 334 which we have earlier quoted appear to conclude the question.”
45. In para 33 of the decision in Gian Devi case (1985) 2 SCC 683 the Court expressed its inability to agree with the observations made by the three-Judge Bench in Ganpat Ladha (1978) 2 SCC 573 and in para 35 it stated more explicitly that the view expressed by the Court in Ganpat Ladha (1978) 2 SCC 573 and the observations made therein do not lay down the correct law.
46. In conclusion, the Constitution Bench, in para 36 of the decision held and observed as follows: (Gian Devi case (1985) 2 SCC 683)
“36. Accordingly, we hold that if the Rent Act in question defines a tenant in substance to mean ‘a tenant who continues to remain in possession even after the termination of the contractual tenancy till a decree for eviction against him is passed’, the tenant even after the determination of the tenancy continues to have an estate or interest in the tenanted premises and the tenancy rights both in respect of residential premises and commercial premises are heritable. The heirs of the deceased tenant in the absence of any provision in the Rent Act to the contrary will step into the position of the deceased tenant and all the rights and obligations of the deceased tenant including the protection afforded to the deceased tenant under the Act will devolve on the heirs of the deceased tenant. As the protection afforded by the Rent Act to a tenant after determination of the tenancy and to his heirs on the death of such tenant is a creation of the Act for the benefit of the tenants, it is open to the legislature which provides for such protection to make appropriate provisions in the Act with regard to the nature and extent of the benefit and protection to be enjoyed and the manner in which the same is to be enjoyed. If the legislature makes any provision in the Act limiting or restricting the benefit and the nature of the protection to be enjoyed in a specified manner by any particular class of heirs of the deceased tenant on any condition laid down being fulfilled, the benefit of the protection has necessarily to be enjoyed on the fulfilment of the condition in the manner and to the extent stipulated in the Act. The legislature which by the Rent Act seeks to confer the benefit on the tenants and to afford protection against eviction, is perfectly competent to make appropriate provision regulating the nature of protection and the manner and extent of enjoyment of such tenancy rights after the termination of contractual tenancy of the tenant including the rights and the nature of protection of the heirs on the death of the tenant. Such appropriate provision may be made by the legislature both with regard to the residential tenancy and commercial tenancy. It is, however, entirely for the legislature to decide whether the legislature will make such provision or not. In the absence of any provision regulating the right of inheritance, and the manner and extent thereof and in the absence of any condition being stipulated with regard to the devolution of tenancy rights on the heirs on the death of the tenant, the devolution of tenancy rights must necessarily be in accordance with the ordinary law of succession.”
47. On the basis of the decisions in Damadilal (1976) 4 SCC 855 and Gian Devi Anand (1985) 2 SCC 683 Mr Lalit strongly contended that when a tenant, having suffered a decree of eviction, on his death left behind sufficient protection under the law for his heirs and legal representatives to step into his shoes and resist the eviction sought for by the landlord how can it be that a tenant suffering a decree of eviction would himself lose the statutory protection against increase in rent. The submission is indeed attractive but a little scrutiny would show that it is quite misconceived.
48. It may be recalled that the decision in Damadilal (1976) 4 SCC 855 was under the Madhya Pradesh Accommodation Control Act, 1961 and Gian Devi Anand (1985) 2 SCC 683 under the Delhi Rent Control Act, 1958. In both the Acts the definition of “tenant” had the qualification that Mr Lalit termed as the exclusionary clause:
“ ‘tenant’ means … but does not include,—
(A) any person against whom an order or decree for eviction has been made”
(emphasis supplied)
In both the decisions, the definition of “tenant” as appearing in the Madhya Pradesh and the Delhi Acts respectively were reproduced. But for some reason, in those two decisions, the Court did not take any notice of that part of the definition.
49. In the Constitution Bench decision in Gian Devi Anand (1985) 2 SCC 683, after reproducing in full the definition of tenant as contained in Section 2(l) of the Delhi Rent Control Act, the Court observed (at the end of para 25):
“25. … It is, therefore, clear from the definition of tenant, whether in the original Act or in the amended Act, that the tenant within the meaning of the definition of the term in the Act includes any person continuing in possession after the termination of his tenancy.”
It is, thus, to be seen that the Court noticed that a person who continued to be in possession after termination of his (contractual) tenancy was covered by the definition of tenant but did not pay any attention to the latter part of the definition that excluded any person against whom an order or decree of eviction had been made.
50. Here it may further be recalled that the decision in Atma Ram Properties (2005) 1 SCC 705 was also under the Delhi Rent Control Act. Hence, if the submissions of Mr Lalit are to be accepted then it would follow that Atma Ram Properties (2005) 1 SCC 705 was wrongly decided. But Mr Lalit himself did not take that position (and he could not have taken that position!). He only tried to distinguish the decision in Atma Ram Properties (2005) 1 SCC 705 by contending that it would not apply to a case under the Bombay Rent Act because in that Act the definition of “tenant” was materially different. The distinction sought to be made by the learned counsel, thus, appears to be unfounded and the submission seems to be inconsistent.
51. But the basic flaw in the submission of Mr Lalit is that it overlooks that the decisions in Damadilal (1976) 4 SCC 855 and Gian Devi Anand (1985) 2 SCC 683 were rendered in a totally different context. In those two decisions the Court proceeded on the basis that the determination of contractual tenancy did not extinguish the rights of the tenant. Under the Rent Act the tenant continued to retain his estate and interests in the demised premises that, after his death, devolved upon his heirs and legal representatives. Further, in both Damadilal (1976) 4 SCC 855 and Gian Devi Anand (1985) 2 SCC 683 the underlying concern of the Court was to save the heirs and legal representatives of the deceased tenants from two misfortunes befalling them at the same time; one, the death of the breadwinner and the other, the loss of the bread altogether as a consequence of the closure of business resulting from ejectment from the tenanted business premises.
52. In Ganpat Ladha (1978) 2 SCC 573 a three-Judge Bench of the Court had held that (under the Bombay Rent Act) the devolution of tenancy could take place only in case of residential premises and not in case of business premises. Disagreeing with that view the Constitution Bench in Gian Devi Anand (1985) 2 SCC 683 (in para 34 of the decision) observed as follows:
“34. … The death of the person who happens to be the tenant of the commercial premises and who was running the business out of the income of which the family used to be maintained, is itself a great loss to the members of the family to whom the death, naturally, comes as a great blow. Usually, on the death of the person who runs the business and maintains his family out of the income of the business, the other members of the family who suffer the bereavement have necessarily to carry on the business for the maintenance and support of the family. A running business is indeed a very valuable asset and often a great source of comfort to the family as the business keeps the family going. … The legislature could never have possibly intended that with the death of a tenant of the commercial premises, the business carried on by the tenant, however flourishing it may be and even if the same constituted the source of livelihood of the members of the family, must necessarily come to an end on the death of the tenant, only because the tenant died after the contractual tenancy had been terminated. It could never have been the intention of the legislature that the entire family of a tenant depending upon the business carried on by the tenant will be completely stranded and the business carried on for years in the premises which had been let out to the tenant must stop functioning at the premises which the heirs of the deceased tenant must necessarily vacate, as they are afforded no protection under the Act.”
53. In the light of the discussion above we are of the considered view that the appellant in this case cannot derive any support from the decisions of this Court in Damadilal (1976) 4 SCC 855 and Gian Devi Anand (1985) 2 SCC 683.
54. Coming now to the second set of decisions, Mani Subrat Jain (1980) 1 SCC 1 arose from an order of the appellant's eviction in execution of a decree made against him. The appellant was an advocate and thus belonged to a “scheduled” class of tenants whose dwellings enjoyed special protection under the East Punjab Urban Rent Restriction Act, 1949. In a suit filed by the respondent landlord for recovery of possession of the demised premises the appellant entered into a compromise and agreed to vacate the premises by a certain date on certain terms regarding rent, etc. The Court passed a consent decree on the basis of the agreement entered into by the parties. The decree was passed on 9-10-1972. Shortly thereafter the area of application of the East Punjab Urban Rent Restriction Act, 1949 was extended and with effect from 4-11-1992 it came to apply to Chandigarh (where the rented property was situated). The appellant did not vacate the premises as agreed and the decree was put to execution. The execution court ordered eviction and the order was affirmed by all the superior courts till the matter finally reached this Court.
55. Before this Court Mani Subrat Jain (1980) 1 SCC 1, the appellant took the stand that the rented premises having come under the Rent Control Act he could not be ejected on the basis of a decree passed earlier. The Court found that the decision of the case would turn on the question whether or not the appellant was covered by the definition of tenant under the Rent Act and observed as follows: (Mani Subrat Jain case (1980) 1 SCC 1)
“3. … The salvation of the appellant is certain if he be a ‘tenant’ within the meaning of the Act. His eviction is certain if the definition of ‘tenant’ does not ensconce him in its amplitude.”
56. The Court in Mani Subrat Jain (1980) 1 SCC 1 then, brushing aside the precedents cited by the two sides, proceeded to examine the question in the light of Section 2(i) (containing the definition of “tenant”) and Section 13 (laying down the grounds on which alone a tenant could be evicted) and reproduced the two provisions as follows:
“2. (i) ‘tenant’ means any person by whom or on whose account rent is payable for a building or rented land and includes a tenant continuing in possession after the termination of the tenancy in his favour, but does not include a person placed in occupation of a building or rented land by its tenant, unless with the consent in writing of the landlord, or a person to whom the collection of rent or fees in a public market, cart-stand or slaughterhouse or of rents for shops has been framed out or leased by a municipal, town or notified area committee.
13. Eviction of tenants.—(1) A tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of this Act or otherwise and whether before or after the termination of the tenancy, except in accordance with the provisions of this section, or in pursuance of an order made under Section 13 of the Punjab Urban Rent Restriction Act, 1947, as subsequently amended.”
(emphasis in the original)
Having thus taken note of the two provisions, the Court arrived at the inevitable conclusion as follows: (Mani Subrat Jain case (1980) 1 SCC 1)
“6. … The expression ‘tenant’ includes ‘a tenant continuing in possession after the termination of the tenancy in his favour’. It thus includes, by express provision, a quondam tenant whose nexus with the property is continuance in possession. The fact that a decree or any other process extinguishes the tenancy under the general law of real property does not terminate the status of a tenant under the Act having regard to the carefully drawn inclusive clause.”
57. It, however, appears that the parties entered into yet another agreement while the matter was pending before this Court and hence, the operative order in the judgment reads as follows: (Mani Subrat Jain case (1980) 1 SCC 1)
“Krishna Iyer, J.— The judgment having been delivered counsel for the respondent represented that the Agreement, which has been made and appendixed to the judgment, be treated as an undertaking mutually between the parties to the Court. Counsel on both sides have no objection to this course and so we record the Agreement incorporated in the judgment as an undertaking to the Court made by the parties in regard to their respective obligations.”
58. Interestingly, in Mani Subrat Jain (1980) 1 SCC 1 the very first sentence of the judgment gives sufficient indication how the decision is going to end up. Krishna Iyer, J. writing for the Court in his inimitably grandiloquent style started the judgment by referring to the “Holmesian homily” and thereby making it clear that the Court would bestow its “humane attention” on the matter not through logic but on the basis of “experience”. From the start to the end the Court made clear its intent to stand firmly by the side of the tenant.
59. We may concede that the tenant in Mani Subrat Jain (1980) 1 SCC 1 who was also an advocate was entitled to be doubly protected by the law. We may also try to comprehend the legalese of the debate as reflected in the judgment. But we have a real problem in following the message the decision in Mani Subrat Jain (1980) 1 SCC 1 gave to the ordinary man. That to go back on one's solemn word given to the other side before a court of law is no sin. On the contrary one may derive rich dividend before the highest court of the land, provided one is a tenant. To, sometimes, divorce logic from the law is one thing but to divorce morality altogether from the law is something quite different.
60. H. Shiva Rao v. Cecilia Pereira (1987) 1 SCC 258 arose on facts very similar to Mani Subrat Jain (1980) 1 SCC 1 (except that in this case the decree of eviction was passed on contest and not on the basis of any agreement between the parties). Following the earlier decision in Mani Subrat Jain (1980) 1 SCC 1 this Court allowed the tenant's appeal and held that he could not be evicted in execution of the decree since after the decree was made the rented premises came under the Karnataka Rent Control Act as a result of the territorial extension in regard to the application of the Act. In H. Shiva Rao (1987) 1 SCC 258 too the Court's strong sympathy for the tenant is evident from paras 5 and 7 of the judgment.
61. Dilip v. Mohd. Azizul Haq (2000) 3 SCC 607 is the third and the last decision in the second set of decisions cited by Mr Lalit. In this case the High Court had taken the view that an appeal preferred by the tenant against a decree of eviction passed by the trial court was not covered by the expression “in a suit or proceeding filed and pending against the tenant in any court or before any authority” as occurring in Clause 13-A of the C.P and Berar Letting of Houses and Rent Control Order, 1949. Clause 13-A of the Order was as follows:
“No decree for eviction shall be passed in a suit or proceeding filed and pending against the tenant in any court or before any authority unless the landlord produces a written permission of the Controller as required by sub-clause (1) of Clause 13.”
62. This Court in Dilip (2000) 3 SCC 607 reversed the High Court decision relying on some earlier decisions and holding that an appeal, even though filed by the tenant, was a continuation of the suit and hence, covered by the expression used in Clause 13-A. The decision in Dilip (2000) 3 SCC 607 also referred to the earlier decision in H. Shiva Rao (1987) 1 SCC 258 but this decision does not seem to have any relevance to the case in hand.
63. It is not difficult to distinguish the decisions in Mani Subrat Jain (1980) 1 SCC 1 and H. Shiva Rao (1987) 1 SCC 258 from the case in hand. Once the tenanted premises came under the Rent Act the tenant could only be evicted on the basis of a decree passed under the Rent Act. But unlike the present appellant, the tenants in Mani Subrat Jain (1980) 1 SCC 1 and H. Shiva Rao (1987) 1 SCC 258 had not suffered any decree under the respective Rent Acts.
64. It needs to be stated here that the decisions relied upon by Mr Lalit are undoubtedly binding precedents for the respective issues decided in those cases but it is not possible to stretch those decisions in support of the point canvassed by him. We must also state here that on the basis of the aforementioned decisions Mr Lalit was able to build up a persuasive argument. But in the larger perspective and with the change in times we find the submissions quite unacceptable.
65. Here it is important to bear in mind that all the decisions relied upon by Mr Lalit, from Damadilal (1976) 4 SCC 855 to H. Shiva Rao (1987) 1 SCC 258 were rendered between 1976 to 1986 during the period when, to put it mildly, the Court used to be overly protective of the tenant and for good reasons too because that is the apparent thrust of the Rent Act.
66. The Rent Act was the socio-legal response to certain historical developments, namely, the acute shortage of housing in the aftermath of the World War, the great influx of refugees in a number of States of the Union following the partition of the country and the massive migration inside the country from rural areas to the urban centres as a result of rapid urbanisation. All these developments that took place almost at the same time skewed the law of supply and demand totally in favour of the landlord. The need of the hour, therefore, was to protect the tenant, who would have otherwise been left completely at the mercy of the landlord. The legislature intervened and brought in the Rent Act, severely restricting the grounds for enhancement of rent and for eviction of the tenant from the rented premises, thus regulating the relationship between the landlord and the tenant beyond the general law under the Transfer of Property Act, 1882. In this regard the Court responded in equal, if not greater measures. But after about three quarters of a century and three generations later when things are no longer the same and the urban centres are faced with newer problems, some of those having their origin in the Rent Act itself, there is the need to take a relook on the Court's attitude towards the relationship between the landlord and the tenant and to provide for a more level ground in the judicial arena.
67. The way this Court has been looking at the relationship between the landlord and the tenant in the past and the shift in the Court's approach in recent times have been examined in some detail in the decision in Satyawati Sharma v. Union of India (2008) 5 SCC 287. In that decision one of us (Singhvi, J.) speaking for the Court referred to a number of earlier decisions of the Court and (in para 12 of the judgment) observed as follows:
“12. Before proceeding further we consider it necessary to observe that there has been a definite shift in the Court's approach while interpreting the rent control legislations. An analysis of the judgments of 1950s to early 1990s would indicate that in majority of cases the courts heavily leaned in favour of an interpretation which would benefit the tenant—Mohinder Kumar v. State of Haryana (1985) 4 SCC 221, Prabhakaran Nair v. State of T.N (1987) 4 SCC 238, D.C Bhatia v. Union of India (1995) 1 SCC 104 and C.N Rudramurthy v. K. Barkathulla Khan (1998) 8 SCC 275. In these and other cases, the Court consistently held that the paramount object of every rent control legislation is to provide safeguards for tenants against exploitation by landlords who seek to take undue advantage of the pressing need for accommodation of a large number of people looking for a house on rent for residence or business in the background of acute scarcity thereof. However, a different trend is clearly discernible in the later judgments.”
68. The learned Judge then referred to some later decisions and (in para 14 of the judgment) quoted a passage from the decision in Joginder Pal v. Naval Kishore Behal (2002) 5 SCC 397, to the following effect: (Joginder Pal case (2002) 5 SCC 397)
“14. … ‘9. … The courts have to adopt a reasonable and balanced approach while interpreting rent control legislations starting with an assumption that an equal treatment has been meted out to both the sections of the society. In spite of the overall balance tilting in favour of the tenants, while interpreting such of the provisions as to take care of the interest of the landlord the court should not hesitate in leaning in favour of the landlords. Such provisions are engrafted in rent control legislations to take care of those situations where the landlords too are weak and feeble and feel humble.’ ”
(emphasis in original)
69. Commenting upon the Full Bench decision of the Delhi High Court that had upheld the constitutional validity of Section 14(1)(e) of the Delhi Rent Control Act and that came under challenge in Satyawati Sharma (2008) 5 SCC 287, Singhvi, J. (in para 29 of the judgment) observed as follows:
“29. … It is significant to note that the Full Bench did not, at all, advert to the question whether the reason/cause which supplied rationale to the classification continued to subsist even after lapse of 44 years and whether the tenants of premises let for non-residential purposes should continue to avail the benefit of implicit exemption from eviction in the case of bona fide requirement of the landlord despite see-saw change in the housing scenario in Delhi and substantial increase in the availability of buildings and premises which could be let for non-residential or commercial purposes.”
70. The decision in Satyawati Sharma (2008) 5 SCC 287 then referred to the doctrine of temporal reasonableness and in para 32 observed as follows:
“32. It is trite to say that legislation which may be quite reasonable and rational at the time of its enactment may with the lapse of time and/or due to change of circumstances become arbitrary, unreasonable and violative of the doctrine of equality and even if the validity of such legislation may have been upheld at a given point of time, the Court may, in subsequent litigation, strike down the same if it is found that the rationale of classification has become non-existent.”
71. We reaffirm the views expressed in Satyawati Sharma (2008) 5 SCC 287 and emphasise the need for a more balanced and objective approach to the relationship between the landlord and tenant. This is not to say that the Court should lean in favour of the landlord but merely that there is no longer any room for the assumption that all tenants, as a class, are in dire circumstances and in desperate need of the Court's protection under all circumstances. (The case of the present appellant who is in occupation of an area of 9000 sq ft in a building situate at Fort, Mumbai on a rental of Rs 5236.58, plus water charges at the rate of Rs 515.35 per month more than amply highlights the point.)
72. With the perspective thus adjusted, all the submissions made by Mr Lalit on behalf of the appellant have a simple answer. The interim order of the High Court asking the appellant to deposit Rs 5,40,000 from the date of the decree as condition for stay of the execution of the decree of ejectment has to be seen as one single package. The appellant may or may not accept the order as a whole. But it is not open to it to accept the order insofar as it stays the execution of the decree and to question the condition attached to it.
73. In an appeal or revision, stay of execution of the decree(s) passed by the court(s) below cannot be asked for as of right. While admitting the appeal or revision, it is perfectly open to the court, to decline to grant any stay or to grant stay subject to some reasonable condition. In case stay is not granted or in case the order of stay remains inoperative for failure to satisfy the condition subject to which it is granted, the tenant in revision will not have the protection of any of the provisions under the Rent Act relied upon by Mr Lalit and in all likelihood would be evicted before the revision is finally decided. In the event the revision is allowed later on, the tenant's remedy would be only by way of restitution.
74. In Atma Ram Properties (2005) 1 SCC 705 the Court viewed the issue exactly in the same way (see paras 6, 8 and 9 of the decision). Further, the decision also answers Mr Lalit's submission that the tenancy did not come to end on the passing of the decree but would continue until the tenant was actually physically evicted from the premises in execution of the decree.
75. In Atma Ram Properties (2005) 1 SCC 705 the Court framed two issues arising for consideration as follows:
“10. … This submission raises the following two issues: (i) in respect of premises enjoying the protection of rent control legislation, when does the tenancy terminate; and (ii) up to what point of time is the tenant liable to pay rent at the contractual rate and when does he become liable to pay compensation for use and occupation of the tenancy premises unbound by the contractual rate of rent to the landlord?”
76. The Court answered the first issue as follows: (Atma Ram Properties case (2005) 1 SCC 705)
“16. We are, therefore, of the opinion that the tenant having suffered a decree or order for eviction may continue his fight before the superior forum but, on the termination of the proceedings and the decree or order of eviction first passed having been maintained, the tenancy would stand terminated with effect from the date of the decree passed by the lower forum. In the case of premises governed by rent control legislation, the decree of eviction on being affirmed, would be determinative of the date of termination of tenancy and the decree of affirmation passed by the superior forum at any subsequent stage or date, would not, by reference to the doctrine of merger have the effect of postponing the date of termination of tenancy.”
The second issue was answered as follows: (Atma Ram Properties case (2005) 1 SCC 705)
“(2) … With effect from that date [the passing of the decree of eviction], the tenant is liable to pay mesne profits or compensation for use and occupation of the premises at the same rate at which the landlord would have been able to let out the premises and earn rent if the tenant would have vacated the premises. The landlord is not bound by the contractual rate of rent effective for the period preceding the date of the decree.” (words in parenthesis added)
(emphasis supplied)
We are in respectful agreement with the decision of the Court in Atma Ram Properties (2005) 1 SCC 705.
77. In the light of the discussions made above we hold that in an appeal or revision preferred by a tenant against an order or decree of an eviction passed under the Rent Act it is open to the appellate or the Revisional Court to stay the execution of the order or the decree on terms, including a direction to pay monthly rent at a rate higher than the contractual rent. Needless to say that in fixing the amount subject to payment of which the execution of the order/decree is stayed, the Court would exercise restraint and would not fix any excessive, fanciful or punitive amount.
78. In the case in hand, the High Court has fixed the amount of Rs 5,40,000 per month with reference to Stamp Duty Ready Reckoner and hence, its reasonableness cannot be doubted. In fairness to Mr Lalit he did not challenge the fixation of the amount on that ground.
79. Before concluding the decision one more question needs to be addressed: what would be the position if the tenant's appeal/revision is allowed and the eviction decree is set aside? In that event, naturally, the status quo ante would be restored and the tenant would be entitled to get back all the amounts that he was made to pay in excess of the contractual rent. That being the position, the amount fixed by the court over and above the contractual monthly rent, ordinarily, should not be directed to be paid to the landlord during the pendency of the appeal/revision. The deposited amount, along with the accrued interest, should only be paid after the final disposal to either side depending upon the result of the case.
80. In case for some reason the court finds it just and expedient that the amount fixed by it should go to the landlord even while the matter is pending, it must be careful to direct payment to the landlord on terms so that in case the final decision goes in favour of the tenant the payment should be made to him without any undue delay or complications.
81. In the light of the discussions made above, we find the order of the High Court just and proper, calling for no interference by this Court. We find no merit in the appeal. It is, accordingly, dismissed with costs.