P. Appa Rao v. P. Dasamuni Reddy

1. This Second appeal is preferred by the defendant in a suit which was instituted for recovery of possession of the plaint schedule building. The two Courts below decreed the plaintiff's suit for possession.

2. The relevant facts are that the plaintiff is the landlord and the defendant is the tenant. In the suit, it is claimed by the plaintiff that there was a commencement of the construction of the building in the beginning of 1958 and that he completed it in October 1958. According to the plaintiff, the building was leased out for a period of three years to the defendant from 1-11-1958 to 31-10-1961 and the defendant became a monthly tenant. The defendant committed default in payment of rent. The plaintiff also wanted the building for his own purposes. The plaintiff had filed H.R.C No. 12 of 63 before the Rent Controller, Chandragiri, for eviction of the defendant from the building. The petition was dismissed on 30-9-1963. Immediately thereafter on 7-10-63 within a week, the plaintiff issued a lawyer's notice to the defendant determining the lease in favour of the defendant and seeking possession. In this notice for the first time it was alleged that the building was constructed by him in 1958 and that he filed the petition, H.R.C No. 12 of 1963 under the bona fide belief that the Andhra Pradesh Buildings (Lease, Rent and Eviction Control) Act, 1960 (hereinafter referred to as ‘the Act’) was applicable to the premises, but that he came to know that the provisions of the Act did not apply to the suit building, as it was constructed after 26th August, 1957. Knowledge of the fact of the construction after 26th August, 1957 it is averred in this notice, was well-known to the defendant. There was a reply to this notice by the defendant under Ex. A-5 dated 21-10-1963, wherein the defendant had denied the allegations that the building was constructed in 1958 and that the lease was only for a period of three years. He asserted that the lease was for 25 years. It was also alleged that having lost H.R.C No. 12 of 1963, the plaintiff was seeking eviction on altogether different grounds by a change of front. Inspite of issuing the notice the plaintiff did not file any suit on the ground that the provisions of the Act were not applicable, but chose to file C.M.A No. 72 of 1963 on the file of the Subordinate Judge, Chittoor. That court on 17-12-1965 had dismissed the appeal filed by the landlord. Thereafter also the plaintiff waited and filed the present suit, O.S No. 444 of 1967 for possession of the suit building and other reliefs. Several issues were framed by the trial court. The trial court found that the suit house was newly constructed by the plaintiff in October 1958, that the lease in respect of the premises was only for three years, that the Civil Court had jurisdiction to entertain the suit, that the plaintiff was not estopped from pleading that the Act did not apply to the case, that the notice to quit was valid, that the proceedings under the Rent Control Act were void ab initio, that those proceedings did not in any way operate to create any estoppel against the plaintiff and there was no question of any waiver on the part of the plaintiff with regard to statutory objections, on the principle that there is no estoppel against a statute. On appeal in A.S No. 12/71, the learned Subordinate judge framed three points for determination:—

1. Whether the plaintiff is estopped from pleading that the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act is not applicable to the facts on hand?

2. Whether the suit house was constructed prior to or subsequent to August, 1957?

3. What is the duration of the lease in favour of the defendant?

3. On all these points, he found in favour of the plaintiff and confirmed the decision of the trial Court. The main point debated before me in this second appeal by the parties relates to the question whether the present suit is maintainable, in view of the decision of the Knit Controller in Ex. B-1 as confirmed by the appellate authority as per Ex. B-2. Sri Venugopal Reddy for the appellant had contended firstly, that in this suit the plaintiff is estopped from contending that the building came to be constructed after August 1957, that the principle that there can be no estoppel against a statute cannot be invoked in this case, and secondly that even otherwise the plaintiff being fully aware of the fact viz., that the construction of the suit building had taken place in 1958 had waived the benefit of S. 32 of the Act which exempted buildings constructed after 26th August, 1937 from the operation of the provisions of the Act and that if not on the ground of estoppel, on the ground of waiver the plaintiff was precluded from instituting the present suit.

4. I will now examine the second of the contentions first. It is averred in the plaint that the proceedings under the Act were taken by the plaintiff inadvertently and that he learnt that the proceedings of the Act did not apply later. It may be noted that nowhere in the petition under the Act the date of the construction of the building was mentioned. The plaintiff it must be assumed, had known the date of construction. He and his counsel in the Kent Control proceedings must be presumed to know the law Ignorance of S. 32 of the Act is no excuse. The Rent Controller, after full enquiry, had dismissed the application for eviction on 30-9-1963. The plaintiff obtained obviously legal advice because within one week after the dismissal of his petition by the Kent Controller, he issued the notice, Ex. A-4, and in that notice for the first time he stated that the tenant was aware that the building was constructed in 1958 and that he had just then learnt that the Rent Control Act did not apply to the building. The suddenness with which he learnt about this fact is surprising. The defendant had issued a reply notice denying the fact that the building was constructed in 1958. One could have understood the bonafides of the plaintiff, if after the notice Ex. A-4 he had not preferred an appeal by C.M.A No. 72 of 1963. Not only did he file the appeal, but he prosecuted the same with all vigour until it was dismissed on 17-12-1965 more than two years later. If the plaintiff had any faith in the truth of his own assertion. I have no doubt that he would have sought legal advice as to what he should do, the fact being viz., that the building was constructed in 1958. The matter was pending in the Appellate Court for two years. The plaintiff could very well have brought the true facts to the notice of the appellate authority and could have moved that Court for a withdrawal of his petition for eviction. He did no such thing. He carried the appeal to the final conclusion and having lost there nearly two years later the present suit is filed. What I have stated above regarding the course of the proceedings under the Rent Control Act leads one to the irresistible conclusion that the plaintiff, who had all along known about the construction of the building in 1958, and must be presumed to know that the Rent Control Act did not apply, had initiated the proceedings before the Kent Controller for eviction, even assuming that on the date when he filed the petition for eviction before the Rent Controller, the fact of the construction of the building in 1958 was not present in the mind of the plaintiff. Apparently with a shock he had realised that he had filed the proceedings before the Rent Controller in ignorance of the fact that the provisions of the Act were not attracted to his case. He had issued the notice on 7-10-63. Then what is the justification for his filing the Civil Misc. Appeal against the order of the Rent Controller and carrying the appeal to its final stages of hearing and decision? The motive is obvious that he wanted to take his chance. He had a second string to his bow viz., the notice to quit issued by him which would entitle him to file a suit in case he had lost before the appellate authority also. This type of attitude on the part of a litigant at all times must be condemned as reprehensible. Courts cannot be made playgrounds for a litigant's tactics.

5. In my opinion, Section 32 of the Act was merely in the nature of an exemption in favour of the landlords with regard to buildings constructed after 28th August, 1957. By and under that provision, a benefit was conferred on landlords in respect of buildings constructed after that date which benefit they could give up or waive. There is no question of any violation of any statute or any question of public policy involved in such a case. The law has always recognised the right of a litigant waiving any right he may have under a statute, unless the waiver of right is itself illegal, being contrary to a express enactment or any express statutory prohibition against giving up such a right. Such cases are quite different and come under the classification ‘waiver’. No doubt the connection between estoppel and waiver is close. The ground in commen to both is to ensure bona fides.

6. The facts of the present case are governed by the principle of waiver precluding the plaintiff from claiming any relief in the present suit. The decision of the Supreme Court in Lachoo Mal v. Radhye Shyam . 1971 1 SCC 619 renders considerable support to this view. The facts of the case before their Lordships may be referred to. The case came up before the Supreme court by special leave granted from a judgment of the High Court of Allahabad in a second appeal. The appellant there in was the tenant and the respondent was the landlord. A certain shop in Mathura was in occupation of the tenant for a very long time on monthly tenancy. In 1962 the landlord wanted to construct certain rooms on the upper storey of the shop for his own residence. That construction apparently could be carried on only if the tenant had vacated the shop for some period. Consequently, the landlord and the tenant entered into a written agreement. The tenant was to vacate the shop on condition that after the completion of the construction of the rooms, the tenant would resume possession of the shop. From the terms of the agreement set out in the judgment, it would appear that some construction was proposed even with reference to the shop because in clause (3) of the agreement there is a recital that “after construction of the shop, the first party (landlord) shall be entitled to get the same amount as rent”. It was further stipulated that all the sections of the Uttar Pradesh Rent Control and Eviction Act should be applicable to the house and that the first party should in no case be entitled to derive benefits from the said Act as a building constructed after 1st January, 1951. The date 1st January, 1951 is significant, because Section 1-A of the Uttar Pradesh Rent Control and Eviction Act provided that buildings constructed after January 1, 1951 were exempted from the operation of the Act. The section enacted that nothing in the Act shall apply to any building or part of a building which was under erection or was constructed on or after January 1, 1951. It would appear that the tenant had resumed possession of the shop after the construction and when he offered the rent to the landlord, he did not accept the same. He was, therefore constrained to deposit the rent as per Section 7-C of the Act. The landlord served a notice under the Transfer of Property Act purporting to determine the tenancy of the tenant. There after a suit was instituted by the landlord for ejectment, for arrears of rent, damages etc. The trial Court dismissed the suit holding that the tenant was entitled to the protection conferred by section 3 of the Act. On appeal, the District Judge took a contrary view and decreed the landlord's suit. The District Judge's judgment was affirmed by the High Court in second appeal. The High Court held inter alia that the landlord was entitled to rely on Sec. 1-A of the Act, which, as stated earlier, took away from the operation of the Act buildings constructed on or after January 1, 1951. The High Court also held that the tenant was not entitled to the benefit of Section 3 of the Act. The Supreme Court posed the question that arose before them as “whether it was open to the respondent (landlord) to give up the benefit of this provision or waive it by means of an agreement of the nature which was entered into between the appellant (tenant) and the respondent (landlord) in June 1962. After referring to certain relevant provisions of the Act, the Supreme Court observed:—

“The essential question that has to be resolved is whether S. 1-A was merely in the nature of an exemption in favour of the landlords with regard to the buildings constructed after January 1, 1951 and conferred a benefit on thorn which they could give up or waive by agreement or contractual arrangement and whether the consideration or object of such an agreement would not be lawful within the meaning of S. 23 of the Indian Contract Act.”

7. It was laid down by their Lordships in paragraph 6 of the Judgment that the general principle is that every one has a right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity which may be dispensed with without infringing any public right or public policy. It was further observed by their Lordships that if there was any express prohibition against contracting out of a statute in it, then no question can arise of any one entering into a contract which was so prohibited; but where there is no such prohibition it will have to be seen whether an Act is intended to have a more extensive operation as a matter of public policy. They went on to quote from Halsbury's Laws of England Volume 8, Third, Edition, paragraph 248 at page 143, which is to the following effect:—

As a general rule, any person can enter into a binding contract to waive the benefits conferred upon him by an Act of Parliament, or as it is said, can contract himself out of the Act, unless it can be shown that such an “agreement is in the circumstances of the particular case contrary to public policy. Statutory conditions may, however, be imposed in such terms that they cannot be waived by agreement, and, in certain circumstances, the legislature has expressly provided that any such agreement shall be void.”

8. Ultimately, their Lordships in paragraph 8 concluded that they were unable to hold that the performance of the agreement which was entered into between the parties would involve an illegal or unlawful act and that in their judgment S. 1-A was meant for the benefit of owners of the building constructed after January 1, 1951 and that in case a particular owner did not wish to avail the benefit of that section, there was no bar created by it in the way of his waiving or giving up or a binding the advantage or the benefit contemplated by the section. In the view expressed by their Lordships, they set aside the judgment of the High Court restoring that of the trial court.

9. It is clear that the reasoning and the conclusion of their Lordships clearly show that a provision like Section 32 in the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 was clearly meant for the benefit of the landlords and that they could give up or waive such a benefit. In the case before their Lordships, it was by agreement. But I do not see any reason why even in the absence of an agreement, the landlord by his own conduct and by the exercise of his own volition cannot give up the benefit conferred on him by reason of section 32 of the Act S. 32 of the Act is in the nature of an exemption. That exemption is for the purpose of conferring a benefit on the landlords and there is no question of public policy or illegality involved in a person giving up that right. The Act does not impose any prohibition on the landlord from waiving the benefit of S. 32. On the ratio decidendi of the above Suprement Court case, I have no hesitation in holding that the plaintiff in this case must be held to have waived the benefit of S. 32 of the Act.

10. The learned counsel for the respondent, Sri Manohar, sought to distinguish the above Supreme Court decision. He submitted that in Supreme Court case the tenancy commenced even long before 1-1-1951 and that therefore the particular Act really governed the parties and that there was nothing really which the landlord gave up. I do not think the decision can be distinguished in that way or any way, having regard to S. 1-A of that Act which stated that the Act would not apply to any building or part of a building which was under erection or was constructed on or after January, 1951.

11. In this view of the matter, I do not think it necessary to deal with the question of estoppel either by conduct on the part of the plaintiff or by reason of the implied admission contained in his earlier petition before the Rent Controller and also the question whether there is any estoppel against the statute. The principle applicable to the case is one of waiver. Both counsel argued this question each citing authorities in support of his respective point of view. As I am resting my decision on the second of the points urged. I refrain from dealing with the question of estoppel in relation to the facts of the case. It follows that on the facts of this case the proceedings before the Rent Controller were initiated and entertained with jurisdiction and that the decision of the Rent Controller as confirmed by the appellate authority in C.M.A No. 72/63 is binding and conclusive between the parties. O.S No. 444 of 67 on the file of the Court of the Principal District Munsif, Tirupathi is not maintainable.

12. In the result, the second appeal is allowed and the Judgment of the lower appellate court is set aside and the suit, O.S No. 444 of 1967 is dismissed with costs throughout. No leave.