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Mirza (Mohammad) v. K. Balakistaiah
Concise Analytical Summary of the Opinion
Factual and Procedural Background
This appeal was filed by the defendants against the judgment and decree of the V Additional Judge, City Civil Court, Hyderabad dated 17 March 1972, which decreed a suit instituted by the respondents (plaintiffs).
The plaintiffs (respondents) sought (a) possession of premises numbered 12-5-920 to 925 including a portion called "Damdama" at Charminar Chowk Maidan Khan, Hyderabad, by evicting the appellants (defendants), and (b) a money decree of Rs. 2,863.25 as compensation for use and occupation and for future compensation until delivery of possession.
Key factual allegations in the plaint (as summarized in the opinion):
- The plaintiffs are the owners of the suit premises. The 1st defendant obtained the premises from the plaintiffs' father by a registered rental deed dated 26 October 1959 (monthly rent Rs. 300) for 11 months to run "Minar Cafe".
- After expiry of the 11-month period, the 1st defendant continued in possession on same terms, paying rent to the plaintiffs' father. The father died in January 1968, after which the 1st defendant accepted the plaintiffs as landlords and paid rent to them.
- The plaintiffs alleged arrears for the period December 1968 to end of September 1969: part payment of Rs. 2,556.76 was made and the balance was claimed recoverable.
- The 1st defendant allegedly obtained and refused to vacate two rooms and the 1st floor ("Damdama") after an agreed month, agreed at Rs. 75 per month. The 1st defendant also allegedly sublet parts of the premises to the 2nd defendant without permission, and removed a wall between the suit premises and an adjoining premises (belonging to Anjaiah), impairing the material value and utility.
- The plaintiffs issued a notice under Section 106 of the Transfer of Property Act on 24 January 1969 and averred that tenancy was terminated.
- Paragraph 13 of the plaint asserted that the tenancy contract was dated 26-10-1959 and the premises was "reconstructed again in 1958", and that in view of an A.P. High Court decision regarding Section 3 of the Hyderabad Building (Rent, Lease & Eviction) Control Act the civil court was competent to try the suit.
The defendants' written statement denied arrears, denied subletting and denial of impairment, and asserted that the premises was not reconstructed after 1957. The defendants pleaded that the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act (the "Act") applied and that the Rent Controller (statutory forum) — not the civil court — had exclusive jurisdiction to try the action.
The trial court framed issues (summarized in the opinion) including whether the premises was reconstructed in 1958 (relevant to jurisdiction) and whether the notice of 24-1-1969 under Section 106 T.P. Act validly terminated tenancy. The trial court found the civil court competent and the notice valid and decreed the suit. The defendants appealed.
Legal Issues Presented
- Whether the provisions of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 ("the Act") are applicable to the suit building and, if applicable, whether the civil court lacks jurisdiction because the statutory tribunal under the Act is exclusively competent.
- Whether the suit premises was reconstructed in 1958 (the factual/legal question that affects which forum is competent).
- Whether the notice dated 24-1-1969 issued by the plaintiffs under Section 106 of the Transfer of Property Act is valid and thereby terminated the tenancy.
Arguments of the Parties
Appellants' (Defendants') Arguments
- The civil court has no jurisdiction to entertain the suit because the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act applies to the premises and the Rent Controller is the proper forum.
- The suit premises was not reconstructed after 1957 and therefore falls within the scope of the Act.
- The trial court erred in considering — without proper pleading or notice — that the lease was in contravention of Section 3 of the Act; allowing the trial court to decide that point suo motu caused prejudice to the 1st defendant.
- The defendants also denied arrears, subletting and impairment of utility/value as alleged by the plaintiffs.
Respondents' (Plaintiffs') Arguments
- The plaintiffs contended that the suit is maintainable in the civil court, relying principally on the decision in G. Eswaraiah v. Mahendrappa Khani (1969 2 APLJ 66).
- They pleaded that the premises had been reconstructed in 1958 (Paragraph 13 of the plaint) and that this made the civil court competent to try the suit.
- They relied on their notice under Section 106 T.P. Act (dated 24-1-1969) as terminating the tenancy and justifying eviction proceedings in civil court.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| G. Eswaraiah v. Mahendrappa Khani (1969 2-APLJ page 66) | It was cited for the proposition that an agreement entered into between landlord and tenant contrary to provisions of the Act may be hit by Section 23 of the Indian Contract Act (i.e., be void as against public policy). | The court examined that decision and held that it did not address whether the provisions of the Act applied to the particular building; therefore G. Eswaraiah did not support excluding the Act's applicability to the suit premises. The court distinguished the decision on that basis. |
| Murlidhar v. State of U.P. (as cited in the opinion) | Authority for the proposition that an agreement entered into in contravention of statutory provisions (here, a rent-control enactment) may still create rights between the parties, and that the person in possession may be treated as a tenant for purposes of tenant-protection provisions. | The court relied on the principle (as explained in Murlidhar) that a lease made contrary to a statute may be enforceable between the parties and the person may be regarded as a tenant entitled to protection under the rent-control legislation; this supported the conclusion that tenants should not be deprived of protection simply because the landlord failed to comply with statutory vacancy notification formalities. |
| Udhoo Das v. Prem Prakash (Full Bench of Allahabad High Court; cited in the opinion as reported 1963 All. L.J 406 / AIR 1964 All L.J 406) | Full Bench view that a lease made in violation of statutory provision (section 7(2) of the Uttar Pradesh Act in that case) would be valid between the parties and create the relationship of landlord and tenant though it might not bind authorities. | The decision (as cited within Murlidhar and discussed in the opinion) was used to support the reasoning that a tenant who entered into occupation in contravention of a statutory formal requirement should still be treated as a tenant vis-à-vis the landlord and should not automatically be denied the rent-control protections. |
Court's Reasoning and Analysis
The appeal focused primarily on the jurisdictional question: whether the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act applied to the suit premises and, if so, whether the civil court lacked jurisdiction because adjudication should be before the statutory tribunal constituted under that Act.
Step-by-step reasoning as set out in the opinion:
- Facts found by the trial court included that the building was constructed before 26 August 1957 and that the tenancy evidenced by Ex. A.1 (26-10-1959) existed. The trial court nevertheless held that the civil court was competent.
- The appellate judge began by asking whether the Act applied to the building. Under Section 32 of the Act (as referenced), the court observed that, because the building was constructed before 26-8-1957, the provisions of the Act applied to it unless some other provision excluded applicability.
- The lower court had proceeded on the premise that the agreement Ex. A.1 was hit by Section 23 of the Indian Contract Act (i.e., void for being opposed to law) and relied on G. Eswaraiah to hold the Act inapplicable. The appellate court examined G. Eswaraiah and found that it did not address whether the Act applied to the type of building before the court in the present case; hence the reliance was misplaced.
- The court then closely analyzed Section 3 of the Act (the vacancy-notification provision). It explained the following elements from Section 3 and related sub-sections as quoted in the opinion:
- The landlord must intimate vacancy in writing to an authorized officer (sub‑sec. (1)).
- If the authorized officer does not intimate within 15 days that the building is required for specified public purposes, the landlord may let it or occupy it himself (sub‑sec. (3)).
- The landlord is prohibited from letting or occupying the building before the expiry of the 15-day period unless authorized. Contravention may render the occupier liable to summary dispossession by an empowered officer (sub‑sec. (5) and (8)).
- From the statutory scheme, the court concluded that an agreement entered into in contravention of Section 3 would not bind the authorities (who have summary dispossession powers), but such contravention did not make the entire Act inapplicable to the building.
- The court emphasized the object of the Act — to protect tenants — and reasoned that a tenant should not be deprived of statutory protection merely because the landlord failed to comply with the Section 3 formalities which lie within the landlord's knowledge and control.
- The court relied on Murlidhar (and the Full Bench authority Udhoo Das as discussed in Murlidhar) for the proposition that a lease in violation of statutory formalities can still be valid between the parties and create landlord-tenant relations, although it may not bind the authorities. On the facts, since the 1st defendant continued in possession and paid rent accepted by the plaintiffs (even after the death of the plaintiffs' father), the plaintiffs were estopped from denying the 1st defendant's status as tenant.
- Consequently, the court held that the Act applied to the building (there being no express provision excluding buildings in such circumstances) and that the civil court lacked jurisdiction; these matters should be adjudicated before the statutory tribunal under the Act rather than in the civil court.
Holding and Implications
CORE HOLDING: The appeal is ALLOWED. The decree and judgment of the trial court are set aside.
Direct consequences and implications as expressed in the opinion:
- The appellate court held that the provisions of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act apply to the suit building (which was constructed before 26-8-1957) and therefore the civil court has no jurisdiction to try the suit; jurisdiction lies with the statutory tribunal constituted under the Act.
- The trial court's decree in favour of the plaintiffs (respondents) is set aside and the appeal is allowed with costs.
- The court did not find it necessary to decide other questions after resolving the jurisdictional issue.
- The opinion indicates no novel legal doctrine beyond application and interpretation of the Act and the settled principle (as cited) that a lease entered in contravention of statutory formalities may be valid inter partes while being unenforceable against authorities; the decision's immediate effect is the setting aside of the trial court's decree and direction that matters be considered by the proper statutory forum. The opinion does not purport to lay down any broader new precedent beyond this adjudication.
Order: Appeal allowed with costs; judgment and decree of the trial court dated 17-3-1972 set aside.
1. This is an appeal by the defendants directed against the judgment and decree of the learned V Additional Judge. City Civil Court, Hyderabad dated March 17, 1972 by which the suit instituted by the respondents herein was decreed.
2. The suit was filed to put the respondents in vacant possession of the premises 12-5-920 to 925 including Damdama situated at Charminar Chowk Maidan Khan Hyderabad evicting the appellants and to pass a decree for an amount of Rs. 2,863,25 Ps. as compensation for use and occupation and for future compensation from the date of the suit till the date of delivery of possession. The facts of the case necessary for the disposal of this appeal may briefly be stared. The plaintiffs are the owners of the premises in question. The 1st defendant obtained from the plaintiffs' father the premises in question by executing a rental deed dated 26th October, 1959 on a monthly rent of Rs. 300/- for running a hotel know as Minar Cafe That rental deed was for a period of 11 months. Subsequent to the expiration of that period, the 1st defendant continued in possession as tenant on the same terms and conditions by paying rents to the father of the plaintiffs. The father of the plaintiffs died in January, 1968 and the 1st defendant accepted the landlordship of the plaintiffs and paid rents to them only after the death of their father. Thus the plaintiffs according to the plaint, are landlords and the 1st defendant has been the tenant of the plaintiffs for the said premises. The 1st defendant had to pay rents from December, 1968 to the end of September, 1969 and the 1st defendant paid only Rs. 2,556-76 and the balance is recoverable from the 1st defendant.
3. The 1st defendant, two years prior to the filing of the suit, obtained a portion consisting of two rooms and the 1st floor of the said premises known a “Damdama” and agreed to pay Rs. 75/- monthly as rent for the said premises only for one month but he did not vacated the said portion after the expiration of the said month and therefore he is liable to pay rent for the said premises at the rate of Rs. 75/- p.m The defendant committed wilful default in the paymer of rents due and is liable to be evicte from the suit premises and that the plaintiffs are entitled to collect the said due from 1st defendant under Law.
4. The 1st defendant sublet the portions of the said premises to 2nd defendant without any permission from the plaintiffs and that is contrary to the terms of the tenancy and on that ground also the defendants are liable to be evicted.
5. 1st defendant has also obtained on rent premises belonging to one Anjayya, uncle of the plaintiffs, the premises situated by the side of the plaintiffs' premises. The 1st defendant without the permission of the plaintiffs got removed the wall in between the premises rented out by the plaintiffs to the 1st defendant and the premises belonging to Anjaiah and combined both the premises. The material value and utility of the premises have thus been impaired by the 1st defendant and on this ground also the defendants are liable to vacate it. Plaintiffs issued notice under Section 106 of the Transfer of Property Act on 24-1-1969 and got terminated the tenancy of 1st defendant and there is no relationship of landlord and tenant between the plaintiffs and 1st defendant. Therefore, the plaintiffs are entitled to get back possession of the premises from the defendants.
6. Paragraph 13 of the plaint is important and it reads thus.
“That the tenancy contract is dated 26-10-1959 and the premises is reconstructed again in 1958. Hence as per the decision of A.P High Court regarding Section 3 of Hyderabad Building (Rent, Lease & Eviction) Control Act, this Honourable Court is competent to try this suit”.
7. The written statement filed by defendants 1 and 2 shows that the Ist defendant is being continued even after the expiry of the period fixed by the registered rental deed dt. 26-10-1959 entered into between the plaintiffs' father on the one hand and the 1st defendant on the other. They were not in arrears and that the 1st defendant did not sublet the premises and there was no impairment of the utility and material value of the premises.
8. The averments contained in paragraph 13 of the plaint was answered in paragraph 12 of the written statement thus:
“That the suit house was purchased from H.E.H the Nizam for Rs. 12,000/- just one or two years before the commencement of the suit tenancy. It was a pucca building in a very good condition. It was never demolished nor reconstructed in 1958. The same building which was purchased by late K. Ramaswamy is standing still. Adverse allegations in this regard either on facts or law are incorrect. As the suit premises was not reconstructed after 1957, A.P Buildings (Lease, Rent and Eviction) Control Act is applicable to the present suit premises and the Rent Controller alone is competent to try such action. As such the Honourable Court has no jurisdiction to try the present suit. On this ground alone, the suit is liable to be dismissed without going into other aspects of the suit. Hence para 13 of the plaint is false and incorrect and hereby denied. The plaintiffs are put to strict proof of the facts mentioned in para under reply”.
9. The assertion that the trial Court has no jurisdiction was repeated in paragraph 15 of the written statement.
10. The court below on the aforesaid pleadings framed appropriate issues and found that there were no arrears due and the building in question was not a new building and it is only an old building and that the rent for dumdama is only Rs. 25/- and the suit is maintainable in a civil court, the suit was however decreed.
11. Learned counsel for the appellants raised the contention that the civil court has no jurisdiction to entertain this suit.
12. Sri B.P Jeevan Raddi, learned counsel for the plaintiffs-respondents on the other hand contended for the position that as per the decision in the case of G. Eswaraiah v. Mahendrappa Khani (1) 1969-2-APLJ page 66 the suit is maintainable. As the arguments are directed mainly against this point, I propose to deal with the same.
13. The point therefore that arises for consideration is whether the suit premises is the one to which the provisions of the Andhra Pradesh Buildings (Lease, Rent and Eviction Control Act, 1960 (hereinafter referred to merely as ‘the Act’) are applicable and whether the suit is maintainable and the civil court has no jurisdiction to entertain this suit?
14. Issues 1 and 2 framed by the Court below read thus:
1. Whether the suit premises was reconstructed in 1958 and as such the court is competent to entertain the suit for eviction?
2. Whether the notice dated 24-1-69 Issued by the plaintiff under S. 106 T.P Act is valid and thereby the suit tenancy is determined?
15. The finding was that the civil court is competent to entertain the suit and that the notice dated 24-1-1969 is valid and the tenancy has been validly termimated.
16. In paragraph 18 the learned Judge observed: “Admittedly, the suit premises was purchased by the Plaintiffs' father before August 1957 and it was let out to 1st defendant under Ex. A.I on 26-10-1959.”
17. The learned Judge also upheld the contention of the learned counsel for the appellant to the effect that the suit premises was not constructed after 26-8-57 and the question is whether the provisions of the Act are applicable to the building in question.
18. The building was constructed only before 26th August, 1957, as per the findings of the court below and, therefore, under Section 32 of the Act, the provisions of the Act apply to the building in question. There is no other provision contained in the Act brought to my notice to show as to how the provisions of the Act are not applicable to the building in question. But the court below proceeded on the assumption that the agreement entered into between the landlord and the tenant on 26-10-1959 Ex. A.I is hit by Section 23 of the Indian Contract Act and placing reliance upon the decision reported in G. Eswaraiah v. Mahendrappa Kheni (1969 2-APLJ page 66) the learned Judge held that the provisions of the Act are not applicable to the building in question.
19. On a perusal of the aforesaid judgment, there is absolutely nothing to show a to how the provisions of the Act are not applicable to the building in question. The decision there was to the effect that an agreement entered into between the landlord and the tenant contrary to the provisions of the Act is hit by Section 23 of the Contract Act but there was no occasion for this Court to go into the question whether or not the provisions of the Act are applicable to a building like the one with which we are now for the present concered.
20. The learned Judge, in paragraph 19 observed that there is no evidence to show as to who occupied the suit premises prior to the 1st defendant. There was also no evidence to show that the plaintiffs' father issued a notice under Section 3 of the Hyderabad Houses Rent, Eviction & Lease) Control, Act, 1954 Intimating the vacancy to the controller before letting it out to the 1st defendant. Sub-section (1) of Section 3 of the Hyderabad Act was then referred. Corresponding provision in Andhra Pradesh Act also was noticed. In that connection the lower court held thus:
“If the landlord failed to intimate the fact of vacancy to the Controller or the officer authorised in that behalf by the Government, the contract of lease becomes void and unenforceable. Consequently neither the landlord nor the tenant can have recourse to the provisions of the Rent Control Act. Hence the remedy open to the landlord seeking eviction of the tenant of a building constructed prior to August, 1957 is only by way of suit in a Civil Court.”
21. Sri C. Narsimhacharya, learned counsel for the appellant submitted that the building being given on lease to the 1st defendant in contravention of section 3 of the Act was never pleaded by the plaintiffs, and the court below suo motu entertained that plea and decided and, as such, the is defendant sufferred Irreparable loss on account of such a point being taken without notice to the 1st defendant. On a perusal of paragraph 13 contained in the plaint referred to already along with the corresponding paragraph relating thereto contained in the written statement referred to already, I am satisfied that there was no foundation laid down for the plea taken note of by the court below to the effect that the leasing out of the premises in question by the plaintiffs' father in favour of the 1st defendant is in contravention of sub-section (1) of Section 3 of the Act on that very ground, the suit is liable to be dismissed.
22. Neverthless, it is proposed to deal with the tenablity of the contention raised to the effect that such a lease entered into in contravention of the provisions of the Act does not nevertheless render the provisions of the Act inapplicable to the building in question. In the first place, barring section 32(b), there is no other provision contained in the Act to the effect that whenever any building is leased out by the landlord who did not comply with sub-section (1) of section 3 of the Act, the provisions of the Act will not apply to such a building in question. Now we shall consider the impact of such an agreement in violation of section 3(1) on the applicability of the Act to the building in question.
23. Sub-section (1)(a) of Section 3 provides for giving a notice of vacancy in writing by the landlord to the officer authorised in that behalf by the Government whenever the building becomes vacant under the circumstances stated therein. Under sub-section (3) if within 15 days of the receipt by the authorised officer of a notice under sub-section (1) or sub-section (2), the Government or the authorised officer does not intimate to the landlord in writing that the building is required for the purpose of the State Government or the Central Government or of any public Institution under the control of any officer of such Government, the landlord shall be at liberty to let the building to any tenant or to occupy it himself. Sub-section (5) prohibits the landlord from letting the building to a tenant and prohibits him to occupy it himself before the expiry of the period of 15 days specified in sub-section (3) unless before then, he has received intimation that the building is not required for the purpose or for occupation by any of the officers specified in that sub-section. Under sub-section (8) any officer empowered by the Government may summarily dispossess any landlord, tenant or other person occupying any building in contravention of the provisions the section.
24. What is manifest from a reading of the relevant provisions of section 3 of the Act is that an obligation is cast upon the landlord to intimate the vacancy to an authorised officer and that landlord is prohibited from letting out the building or occupying it for himself before the expiration on the period of 15 days specified in sub-section (3) and the purpose of sub-section (3) is to have the building allotted for the purpose of the State Government or the Cental Government or to any local authority or of any public institution under of control of any officer of such Government and if in contravention of the provisions of that section, the landlord or tenant or other person occupies such building, he is liable to be summarily dispossessed under sub-section (8)(a) of the Act. It is therefore clear that any agreement entered into between the landlord and the tenant in contravention of section 3 is not binding upon the authorities concerned. It is always open to the authorities concerned to dispossess summarily the landlord or the tenant or any person who is in occupation of the building in contravention of the provisions of that section.
25. I therefore find that the existence of an agreement entered into between the landlord and tenant with respect to a building occupied in contravention of section 3 of the Act will not have the effect of rendering the provisions of the Act inapplicable to such a building. Section 3 is intended for enabling the authorities concerned to have it allotted for the purposes mentioned in sub-sec. (3) of Sec. 3 of the Act. It is only for the purpose of enabling them to achieve that purpose mentioned in sub-section (3) that the requirement of intimation of vacancy by the landlord is provided for under sub-section (1). It is always open to the authorities concerned to dispossess the tenant, landlord or any other person in possession of a building in contravention section 3 of the Act.
26. If we bear in mind that the object of the Act is to protect the tenant mainly, the tenant should not be deprived of that protection on account of himself being told by the landlord who entered into an agreement of lease with the tenant in contravention of section 3 of the Act. Whether or not there was a contravention of section 3(1) of the Act, is a matter which lies exclusively within the knowledge of the landlord. If such landlord enters into an agreement with the tenant, the tenant, for whose protection the Act is intended, should not be deprived of the protection under the Act. It is in this connection reliance was placed upon a decision rendered in the case of Murlidhar v. State of U.P (2). That was a case where an agreement was entered into between the landlord and the tenant contrary to the provisions of the Uttar Pradesh (Temporary) Control of Rent and Eviction Act, 1947. A contention was raised to the effect that because that agreement was opposed to law, the person in whose favour the landlord entered into an agreement cannot be considered to be a tenant. In this connection, Justice Mathew speaking for the Court said in paragraph 16 of the report thus:
“….. In Udhoo Das v. Prem Prakash (1963 All. L.J 406-A.I.R 1964 All L.J 406 : AIR 1964 All. 1 FB.) a Full Bench of the Allahabad High Court took the view that a lease made in violation of the provisions of section 7(2) would be valid between the parties and would create the relationship of landlord and tenant between them although it might not bind the authorities concerned. In the light of this ruling—the correctness of which we see no reason to doubt—we think that the respondent was tenant. The respondent has been paying the rent to Ram Swaroop Gupta and to the appellants after the sale by him to the appellants.
“Tenant” is defined under S. 2(g) of the Act as follows:—
‘Tenant’ means the person by whom rent is, or but for a contract express or Implied, would be payable for any “accommodation”.
27. It is an admitted case that in the year 1959 an agreement of lease evidenced by Ex-A.1 was entered into between the plaintiffs' father on the one hand and the 1st defendant on the other. Even subsequent to the death of the plaintiffs' father, the 1st defendant accepted the plaintiffs as his landlords and the plaintiffs accepted the 1st defendant as their tenant and subsequent to expiration of the period prescribed under Ex. A.1, the 1st defendant continued in possession paying the rent accepted by the plaintiffs. Therefore, the plaintiffs are estopped from questioning the status of the appellant as tenant. The landlord, under those circumstances, cannot prevent persons like the appellants from being benefitted out of the Act which was primarily enacted with a view to affording protection to the tenants.
28. Far from there being anything contained in the Act, providing for the exclusion of the applicability of the provisions of the Act to a building like the one in question, I am satisfied having regard to the object of the Act and particularly that of section 3, the provisons contained in the Act are applicable to the building in question and as such, the civil court has no jurisdiction to entertain this suit and these are all matters that shaft have to be adjudicated upon before specially constituted statutory Tribunal under the Act. I hold therefore that the civil court has no jurisdiction and the decree and judgment of the court below are liable to be set aside.
29. The appeal is accordingly allowed with costs and decree and judgment of the court below are set aside, in view of this, it is unncessary to go into the other questions.
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