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Magunlal Javerchand v. Raja Janakinath Roy Narendra Nath Roy & Co. Ltd.
Structured Summary of the Provided Opinion
Factual and Procedural Background
These two Rules challenge two orders made under section 14(4) of the Rent Control Act, 1950 by the learned Fifth Judge, Court of Small Causes, Calcutta. The petitioners have contested (inter alia) the rates at which the deposit for "arrears and the current rents" was fixed and raised a question whether arrears ought to be calculated for three years backwards from the date of the order or from the date of the application under section 14(4). The petitioners also argued that if the three-year period must be calculated from the date of the application, that point of time should also determine the boundary between "arrears of rent" and "current rents." The court below accepted the view that the three-year period should be calculated from the date of the application. The present opinion disposes of the Rules by considering these points and related authority.
Legal Issues Presented
- Whether the rates at which the rents (for deposit of arrears and current rents) were calculated by the learned Judge are correct and in accordance with binding authority.
- Whether in determining legally recoverable arrears the three-year limitation period should be calculated backwards from the date of the order or from the date of the application under section 14(4).
- Whether the date used for calculation of the three-year limitation period (if taken as the date of application) should also determine the demarcation between "arrears of rent" and "current rents" for the purposes of section 14(4).
- Whether, under section 14(4), the landlord may be directed to obtain deposit of time‑barred arrears (i.e., arrears which are barred by limitation).
- How rents falling due between the date of application and the date of the order should be classified (as arrears or as current/future rents) under section 14(4).
Arguments of the Parties
Petitioners' Arguments
- The rates for computation of rents fixed by the learned Judge were challenged (submitted to be incorrect or not in accordance with applicable authority).
- The three-year period for calculating recoverable arrears should be computed backwards from the date of the order, not from the date of the application; alternatively, if the three years are counted from the date of application that date should also be used to distinguish arrears from current rents.
- When the date of application is taken as the relevant date for back-calculation, rents due in November and December 1954 (in the present cases) should be treated as "current rents" rather than arrears.
Landlords' Arguments (as reported)
- Although the landlords themselves did not move against the order below, attention was drawn on their behalf to an earlier passage in the report at page 783 of 58 C.W.N., where an order for arrears for more than three years was passed under section 14(4); it was argued from that authority that in the present cases tenants should have been directed to deposit the entire arrears irrespective of any question of limitation.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bijoy Singh Nahata v. Mohanlal Chaudhuri (58 C.W.N. 777) |
(a) The decision used as authority for the rates at which rents were to be calculated; (b) The principle that for purposes of an order under section 14(4) the standardised rent prevailing at the relevant time ought to be taken as the standard rent (so as to give effect to the very purpose of the section). |
The court held the rates used by the learned Judge to be in accordance with this decision, reaffirmed the principles laid down therein, and overruled the petitioners' contention on rates and standardisation. The court also explained that the cited decision does not support landlords' contention on time‑barred arrears because that point was not before the court in that earlier decision. |
| Krishna Chandra Bose v. Radharani Ghose (57 C.W.N. 801) | The proposition that in calculating arrears the court will take notice of the law of limitation. | The learned Judge below relied on this decision; the present court agreed that the view is sensible and did not differ from it — limitation must be considered when calculating arrears. |
| Ramkrishna Moreswar v. Ram Bai (3 I.L.R. 17 Bom. 29) | An example of the established rule that when a party makes an application he should not suffer for delay caused by the court — applied in construing statutes of limitation to avoid prejudice caused by court delay. | Noted as authority for the general rule that court delay should not prejudice the applicant; this reasoning supports calculating the three-year limitation period from the date of application rather than the date of the order. |
| The South Indian Industrials Ltd. v. Mothey Narasimha Rao (4 I.L.R. 50 Mad. 372) | Another reported instance applying the rule that litigants should be relieved from prejudice caused by the court's delay in relation to limitation. | Referred to as an example supporting the same principle; the court applied the principle in the section 14(4) context to justify calculating the limitation period from the date of application. |
| Prafula Kumar v. Rao Gajendra Singh (5 I.L.R. 1944 Nag. 768) | Further instance of applying the rule relieving litigants from prejudice due to court delay when construing limitation provisions. | Used as an example of the established approach which the court considered appropriate to apply in the present circumstances under section 14(4). |
| F.A. Nos. 111 and 135 of 1948 (decided on 8.9.54) — under section 22 of the Indian Limitation Act | The application by the judge of the same consideration (that court delay should not prejudice the applicant) in the context of section 22 of the Indian Limitation Act. | The judge referred to his own recent application of the rule in those appeals and saw no reason why the same consideration should not apply to applications under section 14(4) of the Rent Control Act for purposes of testing the effect of the time bar on arrears claims. |
Court's Reasoning and Analysis
The court proceeded through a sequence of focused legal analyses based only on the material before it:
- Rates and standard rent — The court first compared the rates employed by the learned Judge below with the decision in Bijoy Singh Nahata v. Mohanlal Chaudhuri (58 C.W.N. 777), to which the presiding judge was a party. Finding them to be "quite in accordance" with that decision and lacking any material to justify a different conclusion, the court reaffirmed that principle. The court emphasised that for orders under section 14(4) the standardised rent prevailing at the time should be taken as relevant; this view avoids defeating the section's purpose and accords with the principle that the decision of a competent tribunal binds the parties until altered or set aside.
- Limitation as relevant to arrears — The learned Judge below had relied upon Krishna Chandra Bose v. Radharani Ghose for the proposition that in calculating arrears the court will take notice of the law of limitation. The present court endorsed that as "a perfectly sensible view" and accepted that limitation must be considered in computing legally recoverable arrears.
- Whether earlier reported orders compel deposit of time-barred arrears — The court rejected the landlords' submission (based on an earlier passage in the 58 C.W.N. report) that tenants should be directed to deposit entire arrears irrespective of limitation. The court explained that in the cited earlier decision time‑barred rents did not arise and were not argued, because of intervening restraining orders during long standardisation proceedings; therefore that earlier decision is not authority for the proposition that time‑barred arrears can be ordered deposited under section 14(4).
- Proper point of reference for the three-year limitation period — Two possible approaches were presented: (a) calculate three years backwards from the date of the order, or (b) calculate three years backwards from the date of the application. The learned Judge had accepted the latter, and the court sustained that conclusion. The principal reason given is that a party should not suffer prejudice caused by the court's inability to take up and dispose of the matter immediately; that approach is well recognised in practice and has been applied in construing statutes of limitation in various decisions. The court described the rule as "based on statutory principles" and "sound," deserving wide and liberal application.
- Scope of relation-back and classification of rents — The court distinguished two separate legal matters: (i) applying the law of limitation (where the order may be treated as relating back to the date of the application for purposes of calculating recoverable arrears), and (ii) the statutory classification of rents into "arrears" and "current or future rent" under section 14(4). The court held that the order under section 14(4) must classify as arrears all rents that have fallen due and are outstanding up to the date of the order, and as current/future rents those falling due on and after the date of the order. The court rejected the petitioners' contention that taking the application date for limitation purposes should also shift the demarcation point for classification; such a view would introduce uncertainty and be at odds with the statute's language and working.
- Application to the present facts — The applications in these cases were filed on 17 November 1954 and the orders were made on 12 February 1955. The court held the learned Judge correctly calculated arrears for three years backwards from the date of the applications (17 November 1954) and correctly treated rents falling due up to the date of the order as arrears (which therefore includes rents for November and December 1954 in the present cases).
Holding and Implications
CORE RULING: The Rules are dismissed — the court states that the Rules "must fail and they are discharged."
Direct consequences and practical implications (as stated in the opinion):
- The rates at which the learned Judge calculated rents were upheld as being in accordance with the cited authority (Bijoy Singh Nahata v. Mohanlal Chaudhuri).
- In calculating legally recoverable arrears under section 14(4) of the Rent Control Act, 1950, the court will calculate the three‑year limitation period backwards from the date of the application (so that applicants are not prejudiced by delay attributable to the court).
- For the classification required by section 14(4), all rents due and outstanding up to the date of the order are to be treated as "arrears of rent"; rents falling due on or after the date of the order are "current or future rent." The choice to take an earlier date for limitation calculation does not alter this statutory classification.
- The court rejected the argument that tenants should be ordered to deposit time‑barred arrears simply because an earlier reported order imposed arrears for a period longer than three years; that earlier decision was not an authority for ordering deposit of time-barred rents where limitation had not been considered in that case.
- Costs: each party was directed to bear their own costs in this Court.
The opinion reaffirms pre-existing principles rather than announcing a novel precedent; it applies and explains how those principles operate in the context of section 14(4) of the Rent Control Act, 1950.
Disposition: The Rules are DISCHARGED; parties to bear their own costs.
End of summary — based exclusively on the content of the provided opinion.
1. These two Rules are directed against two Orders under section 14(4) of the Rent Control Act, 1950, passed by the learned Fifth Judge, Court of Small Causes, Calcutta.
2. The points that have been canvassed before me in support of the Rules relate inter alia, to the rates for deposit of the “arrears and the current rents” and a further question has also been raised that the “arrears” ought to be calculated for three years back from the date of the order and not from the date of the application under section 14(4). It has also been contended by the learned Advocate for the petitioners that, if the three years have to be calculated from the date of the application under section 14(4) and that is to be taken as the relevant point of time for ascertaining legally recoverable arrears, that point of time should also be accepted for purposes of drawing the line between “arrears of rent” and “current rents” for purposes of the section. In my opinion, these Rules ought to fail.
3. The rates, at which the rents have been calculated by the learned Judge in the Court below, are quite in accordance with the decision of this Court in the case of Bijoy Singh Nahata… v. Mohanlal Chaudhuri…Opposite Party. (1) (58 C.W.N 777). To that decision I was a party and nothing has been placed before me to warrant a different conclusion.
4. It is true that the rent standardisation proceedings are still pending and Rules have been issued by this Court against the appellate orders fixing the standard rents in the two cases at Rs. 54-4 and Rs. 46-12 p.m retrospectively. But, as pointed out in the case cited (1), (58 C.W.N 777), for purposes of the order under section 14(4) of the Rent Control Act, 1950, the standardised rent, prevailing at the time, ought to have taken as the relevant standard rent. Otherwise, the very purpose of the section [section 14(4)] would be defeated and the section would practically become nugatory in many cases. The other possible view, namely, that, until finalisation of the standardisation proceedings, the contractual rent should prevail, would be inconsistent with the well-known legal principle that the decision of a competent tribunal governs and binds the parties until altered or set aside in appropriate proceedings. I would, therefore, reaffirm the principles, laid down in (1), (58 C.W.N 777), and overrule the petitioner's first contention in support of these Rules.
5. On the question of limitation, the learned Judge has relied upon a decision of this Court, given by Chunder, J., in the case of Krishna Chandra Bose v. Radharani Ghose (2) (57 C.W.N 801), and he has held that, in calculating the arrears, the Court will take notice of the law of limitation. That appears to be a perfectly sensible view and I would not differ from it.
6. The landlords in this case have not moved against the order of the Court below, but, on their behalf, my attention has been drawn to page 783 of the 58 C.W.N report, when I (sitting with Sen, J.) passed an order for arrears of rent for more than three years under section 14(4) of the Rent Control Act of 1950, and it has been sought to be argued therefore that, on the authority of that decision, the tenants in the present two cases should have been directed under the said section [section 14(4) of the Rent Control Act of 1950], to deposit the entire arrears irrespective of any question of limitation. I am unable to accept this argument. The decision cited is no authority for the landlords' contention. This aspect of the matter, namely, whether, under section 14(4) of the Rent Control Act of 1950, the landlord would be entitled to get or the tenant would be liable to deposit even the time-barred arrears did not come up for consideration in that case and that was for an obvious reason. In that there was, at different stages of the rent standardisation proceedings, which were moving from Court to Court and pending for a number of years, appropriate orders, restraining the landlord from realising rent at the rate which was eventually found relevant for purposes of calculating the arrears of rent under section 14(4) of the Rent Control Act, and, in these circumstances, no question of time-barred rent arose before us and no such point was argued on behalf of the parties or taken into consideration by us in deciding the case (1), (58 C.W.N 777), and the learned Judge in the Court below was thus right in refusing to take it (1), (58 C.W.N 777), as any authority for directing a deposit of time-barred rents also under section 14(4) of the Rent Control Act.
7. The next question that arises is as to the point of time from which the normal limitation period of three years will have to be calculated backwards for ascertaining legally recoverable arrears of rent. There are two submissions before me. One is that the calculation should be for three years backwards from the date of the order; the other is that this back period of three years should be calculated from the date of the application. The learned Judge has accepted the latter submission and, in my opinion, here also he was entirely right.
8. When the party makes an application before the Court, he should not suffer for the delay which is caused due to the Court's inability to take up the matter forthwith and dispose of it. This rule is sufficiently well recognised and it has often been applied in practice to relieve litigants against prejudice, caused by an act or omission of the Court or any delay or lapse of time involved in Court proceedings. Particular application of this Rule has been made in construing statutes of limitation [vide, e.g, Ramkrishna Moreswar v. Ram Bai, (3) I.L.R 17 Bom. 29; The South Indian Industrials Ltd. v. Mothey Narasimha Rao, (4) I.L.R 50 Mad. 372 and Prafula Kumar v. Rao Gajendra Singh, (5) I.L.R 1944 Nag. 768]. I myself have applied it recently in a case under section 22 of the Indian Limitation Act (vide F.A Nos. 111 and 135 of 1948, decided on 8.9.54), and I see no reason, why the same consideration should not apply to cases under section 14(4) of the Rent Control Act of 1950, when the question that arises is really one of testing the effect of the time bar on the landlord's claim for arrears of rent. The rule is based on statutory principles and it is, indeed, a sound rule which should receive a wide and liberal application, and I am not prepared to depart from it or to refuse to apply it in the determination of the landlord's rights in the matter of arrears of rent under section 14(4) of the Rent Control Act of 1950. When the landlord had made his application under the section it is for the Court to pass appropriate orders as contemplated therein. If the Court passes orders on that very day, there can be no doubt that the landlord, if he is otherwise entitled to it under the section, would get an order for at least three years' arrear rents, outstanding on that date and I find no adequate reason why the Court's liability to pass the relevant orders on that day or any delay in that behalf should prejudice the landlord or deprive him of a part of his outstanding dues, legally recoverable on the date of his application. Any other view would be not only extremely unjust in many cases, but even unsafe to follow in practice and I will not be prepared to adopt it when the relevant statute does not compel its adoption. In effect, the order will only relate back to the date of the application for purposes of calculating legally recoverable arrears and to that, I can see no valid objection. The section no doubt provides for the giving of “an opportunity to the parties to be heard” in the matter, but to hold therefrom that the back period of three years should be calculated from a date to be fixed upon this consideration would not be proper, as apart from any other consideration, it would introduce an element of uncertainty and the relevant point of time would vary from case to case. I would rather avoid such a construction.
9. In the present cases, the application under section 14(4) was filed on November 17, 1954. The actual order under that section was made on February 12, 1955. The landlord in his claim for arrears should not, as I have already said, suffer due to the liability of the Court to dispose of the applications forthwith when they were filed on November 17, 1954. The learned Judge was, therefore, right in calculating arrears for three years backwards from the date of the applications, namely, 17th November, 1954, and his decision in this regard must be upheld.
10. Lastly, the petitioners contend, that, as the date November 17, 1954, is being taken as the relevant date for back calculation of the legally recoverable arrears, the rents for November and December, 1954, should be treated as “current rents” for purposes of section 14(4) of the Rent Control Act of 1950. I am unable to accept this contention. From the wording of the section [section 14(4)], it is perfectly clear that the order to be passed under that section for deposit of arrears of rent would be for such arrears up to the date of the order and, if that is the correct position, the rents for November and December, 1954, would also be classed as arrear rents for purposes of section 14(4) and the learned Judge in the Court below was perfectly right in calculating the same on that basis.
11. The order to be passed under section 14(4) is to be for deposit of “arrears of rent” and “current or future rent”. Obviously all rents which have fallen due and are in arrears up to the date of the order and outstanding on such date would be “arrears rents” on that date and rents falling due on or since that date would be “current or future rent”. This is the classification plainly intended by the section and the fact that, for ascertaining legally recoverable arrears, an earlier date may have to be taken for calculating backwards the period of limitation in a particular case will not affect that classification. All rents due and outstanding on the date of the order would undoubtedly be arrears, although in a particular case the landlord may be entitled to an extension of the period of limitation and the recoverable arrears may be for a period, exceeding the normal period of limitation. Classification under the section and application of the law of limitation are two different matters and one should not be confused with the other.
12. When the section speaks of an order for deposit of “arrears” of rent and also of rent “month by month”, the latter has obvious reference to “future or current rents” and it would be quite inappropriate to include within the latter category rents which have already fallen into arrears between the date of the application and the order and which cannot, therefore, from the very nature of things, be ordered to be deposited month by month. Indeed, the frame and text of the statute precludes any application of the theory of “relation back” or the shifting of the demarcating point of time in the matter of classification into “arrears” and “current” rents.
13. I hold, therefore, that, for purposes of the order under section 14(4), the rents due upto the date of the order would have to be taken as “arrear rents” and rents subsequently due, that is, rents which have not fallen into arrears on that date, would be within the other classification of “future or current rent”. This distinction appears to be inherent in the wording and working of the section and I do not think that the learned Judge was unjustified in proceeding on that basis.
14. In the above view of the matter, these Rules must fail and they are discharged. In the circumstances of these cases, I direct the parties to bear their own costs in this Court.
S.K.B
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