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CASE NO.: Appeal (civil)  3294-3295 of 2005

PETITIONER: Ajai Agarwal & Ors.                                        

RESPONDENT: Har Govind Prasad Singhal & Ors.                                                  

DATE OF JUDGMENT: 08/11/2005

BENCH: Ashok Bhan & Altamas Kabir

JUDGMENT: J U D G M E N T

ALTAMAS KABIR,J.                  The appellants are the legal heirs of the  respondent- tenant and the respondents are the landlord-plaintiffs. One Jagdish Prasad, the father of the appellants in these    two appeals  was granted a  tenancy of a shop room situated at   Mohalla  Bhoop Singh, Kasba Jaspur, Distrtrict Nainital by the  Respondents-plaintiffs at an agreed rent of  Rs.600/- per year.   Since the shop room was in a dilapidated condition, the tenant  requested the landlord to get the shop renovated and to fix a  shutter in the shop but the landlord did not agree to such a  proposal and asked the tenant to get the shop repaired  at his  own costs and consequently increased the rent to Rs.1,200/- per  year.  It is the case of  the tenant that at the relevant time the  tenant fell ill  and could neither repair the shop  nor  fix the  shutter as agreed till the year 1989 but the landlord insisted on  payment of the increased  rent at the rate of Rs.1,200/- per year  since 1986.  According to the tenant, the increased rent was to  be  paid for the improvement in the shop room but since the  repair work could not be done till 1989, the landlords agreed to  receive rent at the rate of  Rs.75/- per month instead of  RS.100/- per month.  However, once the shop was renovated  and the shutter was fixed, the tenant paid the rents at the  enhanced rate of  Rs.1,200/- per  year.         On 21.5.1992, the landlord-respondents gave notice  stating that the rent had not been paid from the month of  October 1988 and demanded  rent  at the rate of Rs.200/- per  month from 1.4.1989 and thereafter at the rate  of Rs.400/- per  month from 1.1.1990.   The tenant duly replied to  the said  notice on 20.6.1992 denying that any such  enhancement had  been agreed to by him and also indicated that the rents had not  been paid as the landlord had himself  refused to accept the  same.  The tenants thereupon tendered the rent of Rs.4,950/- to  the landlord by money order at the rate of Rs.100/- per month,  including house tax, since October, 1988.  The landlord,  however, refused to accept the same.    On 24.4.1996,  the   landlord-respondents filed a suit for recovery of arrears  of rent   amounting to Rs.14,500/- and for eviction of the tenant from the  tenanted premises.  The amount claimed by the landlord- respondents   towards arrears of rent was calculated on the  basis  that  that the monthly rents were  in arrears at the rate of  Rs.200/- per month from February, 1989 and at the rate of  Rs.400/- per month from  January 1990.  The court of Small  Causes (Senior Division), Nainital, decreed the suit upon   accepting the case made out by the landlord-plaintiffs regarding  the purported agreement for enhancement of the rents at the  enhanced rate.

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       Aggrieved by the judgment and order of  the trial court,  the tenant filed a revision petition  No.34/1996  which was also  dismissed by the court of Special Judge (CBI)/Addl.District  Judge, Nainital on 13.8.1999.         Aggrieved by the aforesaid  judgments and orders, the  present appellants who had succeeded to the tenancy as the  legal heirs of the tenant filed a Civil Writ Petition No.36462/99  before the High Court of Allahabad which after the creation of  the Uttaranchal High Court stood transferred to the High Court of  Uttaranchal and renumbered as  Writ Petition No.  4053(M/S)/2001.         Before the High Court it was sought to be urged on behalf  of the  appellants-tenant that in the absence  of any written  agreement the provisions of  Section 16 (10)  of the  Uttar  Pradesh Urban Buildings (Regulation of Letting, Rent and  Eviction) Act, 1972 (hereinafter referred to as ’the Act’) did not  provide for enhancement of rent by an oral agreement.  It was   sought to be  urged that the case  as made out on behalf of the  landlord-respondents regarding the alleged agreement to  enhance the rents periodically was not borne out by the   materials on record and both the trial court and the revisional  court had erred in accepting the said story as made out by the  landlord in the absence of any written evidence  of such  agreement alleged to have been arrived at between the parties.         It was sought to be urged that the courts below had erred  in relying on the uncorroborated evidence of the landlord  in  arriving at a decision that such  an agreement had been entered  into  and was subsisting between the parties.         A learned single Judge of the Uttaranchal High Court    however, affirmed  the findings of the courts below regarding the  purported agreement between the parties  for  periodical  enhancement of rent and concluded that   the  tenant was in  arrears  in payment of rent, having failed to pay the same at the  enhanced rates.  The learned Judge held that notwithstanding  the deposit of Rs.4,950/- by the tenant, the tenant would not be  entitled to the benefit of  Section 20 (4) of the Act and  accordingly dismissed  the writ petition.         The writ petitioners thereafter filed a Review Petition No.  9082/2003 which was also dismissed by the learned single Judge  of the Uttaranchal High Court by his order  dated 4.12.2003.         These appeals arise out of two Special Leave Petitions filed  by the appellants challenging  both the final orders dated  5.9.2003 and  4.12.2003 passed by the learned  single Judge of  the Uttaranchal High Court dismissing the  civil  writ petition and  the  subsequent  review petition.         On behalf of the appellants it was reiterated that initially it  had been decided that the rent  for the shop room  would be   Rs.600/- per year and that upon repairs being effected to the  shop room and the fixing of a shutter the rent would be   increased to Rs.100/- per month.  It was reiterated  that since  the landlord had not effected the repairs or fixed the shutter in  the shop room the tenant ultimately was compelled to undertake  the work himself though the landlord claimed the enhanced rent  at the rate of Rs.100/- per month after such repairs and  renovation.  However, since the tenant had been compelled to  effect the repairs and fix the shutter himself  and  had to bear  the  expenses for the same, the landlord agreed to accept  rents  at the rate of Rs.75/- per month and thereafter at the rate of   Rs.100/- per month.   It was also urged that the tenant did not  consent to any further increase in the rent and except for the  oral statement of the landlord, there is no   other evidence on  record to prove that  the tenant had consented to any further  increase of the rents.  It was urged that in the absence of  such  evidence the findings recorded by the courts below were based  on assumption and were perverse.

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       It was submitted that in the absence of any documentary  evidence as against the uncorroborated evidence of the landlord  alone,  all the courts below, including the High Court at  Uttaranchal, had erred in coming to the finding that  the parties  had agreed to periodical enhancement of rent and that the  tenant having failed to pay the rents  at the enhanced  rates was  liable   to be evicted from the tenanted shop room.         The submissions made on behalf of the appellants was  strongly opposed on behalf of the landlord-respondents by  Mr.Dinesh Dwivedi, learned senior advocate, who contended that  all the courts below had  concurrently come  to the finding  regarding the existence of an agreement between the parties for  periodical enhancement of the rents, which ought not to be  interfered  with  by this Court at the final  stage  of the  proceedings.  It was also sought  to be  urged that the  presumptive rent indicated in Section 16 (10) of the Act  contemplated fixation of such rent subject to any agreement in  writing between the parties or to any subsequent determination  of the standard rent after formal inquiry under Section 9.  It was  sought to be contended that the said provision would indicate  that enhancement of rent could also be done without any  agreement in writing between the parties.

       It was then contended that since the appellants had failed  to pay the rents at the enhanced rate as agreed upon between  the parties, the courts below had rightly held the appellants to  be in arrears in payment of the monthly rents and was not,  therefore, entitled to the benefit of Section 20 (4) of the Act  which reads as under:-

"20. Bar of suit for eviction of tenant except on  specified grounds.         

               (1)     \005\005\005\005\005.                 (2)     \005\005\005\005\005. (3)      .\005\005\005\005..

(4)         In any suit for eviction on the ground  mentioned in clause (a) of sub-section (2), if at  the first hearing of the suit the tenant  unconditionally pays or tenders to the landlord  or deposits in Court the entire amount of rent  and damages for use and occupation of the  building due from him (such damages for use  and occupation being calculated at the same  rate as rent) together with interest thereon at  the rate of nine per cent per annum and the  landlord’s costs of the suit in respect thereof,  after deducting  therefrom any amount already  deposited by the tenant under sub-section (1)  of Section 30, the Court may, in lieu of passing  a decree for eviction on that ground, pass an  order relieving the tenant against his liability  for eviction on that ground:

Provided that nothing in this sub-section shall  apply in relation to a tenant who or any  member of whose family has built or has  otherwise acquired in a vacant state, or has  got vacated after acquisition, any residential  building in the same city, municipality, notified  area or town area.

Explanation.\027For the purposes of this sub-

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section\027

(a)     the expression ’first hearing’ means the  first date for any step or proceeding  mentioned in the summons served on  the defendant;

(b)     the expression ’cost of the suit’ includes     one-half of the amount  of counsel’s fee  taxable for a  contested suit."     

It was also contended that, in any event, the appellants  had not even deposited the amount of Rs.4,950/-  accepted by  the tenant to be the amount in arrears of rent,  within the time  contemplated in Explanation (a) to sub-section (4) of Section 20  of the Act.  It was  urged that even if the story of periodical  enhancement of rents was discarded, the appellants would still  not be entitled to the protection under the aforesaid provision  since the admitted deposit had also been made beyond the time  prescribed. In this regard, the decisions of this Court in the case of  Rakesh Wadhawan & Ors.  vs. Jagdamba Industrial Corporation  & Ors., (2002) 5 SCC 440,  Ashok Kumar & Ors. vs. Rishi Ram &  Ors., (2002) 5 SCC 641, Mam Chand Pal   vs.  Shanti Agarwal  (Smt.), (2002) 3 SCC 49  and Sudershan Devi  & Anr. vs.   Sushila Devi & Anr.,  (1999) 8 SCC 31 were referred to by the  parties  for the purpose of interpretation of the expression "first  hearing of the suit"  used  in Section 20 (4) of the Act. On behalf of the landlord, it was also sought to be urged  that, in any event, the landlord would be entitled to the benefit  of Section 6 of the Act since admittedly  improvements had been  effected to the tenanted shop. Mr.Dwivedi submitted that the appellants had not made  out any case which called for interference by this Court with the  findings and orders of the courts below and the civil appeals  were  liable to be dismissed. On a careful consideration of the submissions made on  behalf of the respective parties, what strikes us as unreasonable  is the reliance placed  by the courts below  on the  uncorroborated evidence of the  landlord alone, in arriving at a   conclusion that the parties had, in fact,  agreed to periodical  enhancement of the  monthly rent for the shop room in question.   There is no other evidence of the alleged agreement between the  parties, much less written agreement.  We are unable, therefore,  to appreciate the submissions  made on behalf of the landlord  with regard to sub-section (10)  of Section 16  which, in our  view, has been correctly held by the High Court  not to be  applicable to the facts of the instant case.  It is even doubtful    whether the effect of Section 6 of the Act can be said to enure to  the benefit of the landlords, since the improvements of the  tenanted premises had been effected not by the landlord but by  the tenant himself.  For the sake of reference Section 6 of the  Act is reproduced hereinbelow:-

"6. Effect of improvement on rent.\027 Notwithstanding anything contained  in Section 4 or  Section 5, but subject to the provisions of Section 8,  where the landlord has, after the commencement  of  this Act, either with the consent of the  tenant or in   pursuance of any requirement of law, made any  improvement in a  building , he may by notice in  writing to the tenant given within three months from  the date of completion  of the improvement, enhance

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the monthly rent of the building by an amount  not  exceeding  one per cent of  the actual  cost of such  improvement, with effect from  the said date, and   thereupon the standard rent of that building shall  stand enhanced accordingly."

In the absence of any proper evidence regarding the  purported       agreement for periodical enhancement of the rents,  it becomes difficult to accept the story of such agreed  enhancement as made out on behalf of the landlord or its  application to the provisions of Section 20 (4) of the Act.  Since  there is no such evidence on record, except for the   uncorroborated statement of the landlord, we have no other  option  but to accept the story of the appellants-tenant that the  parties had agreed to the increase of the  monthly  rent upto a  maximum of Rs.100/- per month and that too after the  renovation had been effected to the shop room and a shutter  had been fixed therein.  If such be the case, the appellants  would also be entitled to the protection of Section 20 (4), since  the rents admitted to be in arrears at the rate of Rs.100/- per  month had been  duly deposited by the tenant within the time  prescribed under  such provision of the Act. Although, we have arrived at the aforesaid conclusion, an  element of doubt  persists in regard to the effect of Section 6 of  the Act in its application to the facts of the instant case where   undoubtedly  certain improvements had been made to the  tenanted premises.  Section 6, in fact, permits the landlord upon  improvements made, to give a notice in writing to the tenant  within three months from the date of the completion of the  improvement  regarding enhancement of the monthly rent by an  amount not exceeding one per cent of the actual cost of such  improvement.   Undoubtedly, the landlord had served notice on  the tenant regarding enhancement of the monthly rents and  demanded payment thereof at the rate of Rs.200/- per month  from 1.4.1989 when, in fact, the repairs had been effected.  In  our view, it was not unreasonable for the landlord to enhance  the monthly rents to Rs.200/- per month for the shop  in  question since improvements had been made therein. At this stage, it may be indicated that after the filing of the  Special Leave Petitions,  the appellants had been directed  by  Order dated 19.3.2004 to clear all the arrears  in terms of the  order of the High Court within a period of  one month and  thereafter to continue to pay the rent at the same rate month by  month.  It has been submitted on behalf of the appellants  that  in compliance  with  the said direction, the appellants had   deposited  the monthly rents in favour  of  the landlord at the  rate of Rs.400/- per month, inclusive of house tax.  Since we are  accepting the monthly rent to be Rs.200/- per month, the  appellants-tenant will henceforth from the month of November  2005 pay to the respondents-landlord the monthly rents  for the  shop room at Rs.200/- per month.  The appellants-tenant will  not lay any claim for re-imbursement of any excess amount that  has been deposited on account of the monthly rents at the  enhanced   rate of Rs.400/- per month.  The acceptance of the  monthly rent to be Rs.200/- per month is subject to future  enhancement in accordance with law.             The appeals are allowed, the impugned judgments of the  High Court are set aside and the suit filed by the respondents- landlord   is dismissed.  There will be no order as to costs.                                                                                                        

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