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Rishab Chand Bhandari (Dead) By Lrs. And Another v. National Engineering Industry Limited .
Factual and Procedural Background
The suit premises belong to Sitaram Bhandar Trust (“the Trust”). The respondent company claimed to have been authorised by the Trust to let out the premises to the second appellant (defendant 1 before the trial court) and collected rent for a period of time. Subsequently, the tenant began paying rent to one Ram Das Modani, who asserted that he was collecting rent on behalf of the Trust. Alleging default in payment of rent, the respondent filed a suit for eviction and recovery of arrears.
The Vth Additional District Judge, Jaipur City, decreed the suit on 31-7-1993. A learned Single Judge of the Rajasthan High Court reversed that decree on 23-8-2001. On 17-1-2005, a Division Bench restored the trial court’s decree. The present appeal by special leave challenges the Division Bench’s judgment before the Supreme Court of India.
Legal Issues Presented
- Whether the respondent company qualifies as a “landlord” under Section 3(iii) of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950, so as to maintain a suit for eviction and recovery of rent.
- Consequently, whether the appellants committed default in payment of rent when they tendered rent to a person other than the respondent.
Arguments of the Parties
Appellants’ Arguments
- No arrears existed because rent was paid to Ram Das Modani, who was collecting it on behalf of the Trust, the admitted owner.
- Hence, there was no default in payment and the suit for eviction was unwarranted.
Respondent’s Arguments
- The respondent company was the “landlord” within the meaning of Section 3(iii) because it had let out the premises and had been receiving rent.
- Rent ought to have been paid to the respondent; payment to any other person constituted default.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Madan Lal v. Hazara Singh, (1977) 2 RLR 641 (Del) | The owner is the natural landlord; an expanded statutory definition does not extinguish the owner’s primary status. | The Supreme Court approved this reasoning to reinforce that agency-based “landlords” cannot usurp the owner’s control absent clear authorisation. |
Court's Reasoning and Analysis
The Court adopted a purposive interpretation of Section 3(iii) of the Act. While rent statutes expand the definition of “landlord” to include agents or trustees, the Court held that such expansion cannot negate the primary role of the owner. A literal reading that allows an agent to evict a tenant against the owner’s wishes would produce an absurd result and therefore must be avoided.
Applying this principle, the Court found that the respondent had produced no written authorisation—such as a power of attorney—from the Trust empowering it to file an eviction suit or receive rent on the Trust’s behalf. Without such proof, the respondent’s status as landlord for purposes of eviction remained unsubstantiated.
Recognising that the factual question of authorisation was not conclusively determined, the Supreme Court deemed it appropriate to remand the matter to the trial court. The respondent was granted liberty to file documentary evidence of authority, and the Trust was directed to be impleaded as a pro forma defendant. The trial court was instructed to decide the suit afresh, uninfluenced by prior findings.
Holding and Implications
Appeal Allowed; impugned judgments set aside; matter remanded to the trial court.
Direct Effect: The eviction decree stands vacated pending fresh adjudication. The respondent must prove written authorisation from the Trust, and the Trust will now be a party to the proceedings.
Broader Implications: The decision endorses a purposive approach to the definition of “landlord,” emphasizing that statutory agents cannot override the owner’s prerogatives without clear, documented authority. No new binding precedent was expressly created, but the Court’s approval of Madan Lal v. Hazara Singh reinforces this interpretive stance.
Order
1. Heard learned counsel for the parties. This appeal has been filed against the judgment and order dated 17-1-2005 of the Division Bench of the High Court of Judicature of Rajasthan, Bench at Jaipur whereby the learned Division Bench has set aside the order of the learned Single Judge dated 23-8-2001 and restored that of the trial court i.e the Vth Additional District Judge, Jaipur City, Jaipur dated 31-7-1993.
2. The respondent-plaintiff filed a suit for eviction against the appellant-defendants and for deposit of arrears of rent. The said suit was decreed by the trial court. In appeal the said decree was set aside by the learned Single Judge of the High Court, which order has been set aside by the learned Division Bench by the impugned order. Hence, this appeal by special leave.
3. The facts in brief are that the suit premises admittedly belonged to Sitaram Bhandar Trust (hereinafter for short “the Trust”) and the Trust is the owner of the suit premises. The respondent, claiming that it was authorised by the Trust to do so, alleged that it had let out the premises in dispute to Appellant 2 (Defendant 1 in the suit) and was collecting rent from it. However, thereafter, Defendant 1 started paying rent to one Ram Das Modani who claimed to be an employee of the Trust. The respondent then filed a suit for eviction and arrears of rent against the appellants alleging that the appellants had committed default in payment of rent.
4. Under the Rajasthan Premises (Control of Rent and Eviction) Act, 1950, under Section 3(iii) the word “landlord” has been defined as under:
“3. (iii) ‘landlord’ means any person who for the time being is receiving or is entitled to receive the rent of any premises, whether on his own account or as an agent, trustee, guardian or receiver for any other person, or who would so receive or be entitled to receive the rent, if the premises were let to a tenant; it includes a tenant in relation to a sub-tenant;”
5. Learned counsel for the appellant submitted that there were no arrears of rent as rent was being paid to Ram Das Modani, who was collecting rent on behalf of the Trust. Hence, he submitted that there was no default in payment of rent. On the other hand, learned counsel for the respondent submitted that the respondent Company was the landlord and hence rent should have been paid to it and thus there was default in payment of rent. He further submitted that it was the respondent who had let out the premises and accordingly in terms of the Act it was entitled to receive rent.
6. We have heard learned counsel for the parties. We are required to interpret the word “landlord” as provided under the Act. In our opinion a purposive, and not literal interpretation has to be given to the definition of “landlord” in the Act.
7. The natural landlord of a premises is ordinarily the owner. However, an expanded definition has been given in various rent statutes of many States for the reason that sometimes the owner may not himself be in a position to collect the rent and may hence appoint an agent or authorise any person to collect rent on his behalf because he may be abroad or is unable to do so for any other reason. This does not mean that the natural meaning of the word “landlord”, who is the owner of the premises, would disappear and that the owner goes out of the picture altogether. This is the view taken by the Delhi High Court in Madan Lal v. Hazara Singh (1977) 2 RLR 641 (Del). We approve of the view taken in the said decision.
8. If we interpret the definition of “landlord” in the Act literally it will result in strange consequences. It will mean that even if the owner, who is the natural landlord, does not want to evict a tenant, his agent may do so. Surely this is an absurd situation. It is well settled that if a literal interpretation leads to absurd consequences, it should be avoided and a purposive interpretation be given.
9. In the present case the respondent has not been able to show that it was authorised in writing to act on behalf of the Trust either by a power of attorney or any other written document. Unless there is some documentary proof that the Trust had authorised its agent to file a suit for eviction on its behalf, it cannot be said that the respondent had any right to file such a suit, even though it had actually let out the premises to the appellant and collected rent. The respondent is admittedly not the owner of the premises, and only claims to be the agent of the Trust.
10. On the facts and circumstances of the case, we are of the opinion that this aspect of the matter needs to be gone into by the trial court. Accordingly, we allow this appeal and set aside the impugned judgment and order of the Division Bench and that of the learned Single Judge and remand the matter to the trial court. Before the trial court, the respondent will have liberty to produce any documentary evidence to show that the Trust had authorised it in writing to receive rent and file suit for eviction on behalf of the Trust. The respondent-plaintiff shall also implead the Trust as pro forma defendant before the trial court.
11. The trial court shall decide the suit uninfluenced by any observations made by us in our order or the observations made by the Division Bench and the learned Single Judge of the High Court or the earlier decree of the trial court. All contentions are left open to the parties to be urged before the trial court.
12. Appeal allowed. No order as to costs.
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