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PETITIONER: LACHOO MAL

       Vs.

RESPONDENT: RADHEY SHYAM

DATE OF JUDGMENT10/02/1971

BENCH: GROVER, A.N. BENCH: GROVER, A.N. HEGDE, K.S.

CITATION:  1971 AIR 2213            1971 SCR  (3) 693

ACT: U.P.  Temporary Control of Rent and Eviction Act, 1947,  ss. 1(A) and 3-Construction after 1951-Agreement that Act should apply-If  binding  upon landlord-Indian Contract Act  (9  of 1872), s. 23-Scope of.

HEADNOTE: The  appellant was the tenant of the respondents  shop.   As the  latter wanted to make some constructions  they  entered into  ail  agreement  in  1962,  according  to  which,   the appellant was to vacate the shop but reoccupy it on the same rent as soon as the construction was completed.  It was also agreed that all the sections of the U.P. (Temporary) Control of Rent and Eviction Act, 1947, shall be fully applicable to the  new tenancy.  After the construction was completed  the appellant   resumed  possession  and  offered   rent.    The respondent refused the rent and filed a suit for  ejectment. In  appeal, the High Court held that the appellant  was  not entitled  to  the protection of the Act, because,  the  res- pondent  was  entitled to rely on s. IA according  to  which nothing in the Act shall apply to a building constructed  on or  after  1st  January, 1951, and that  the  agreement  was unlawful within the meaning of s. 23 of the Indian  Contract Act, 1872. In appeal to this Court, HELD  : The general principle is that every one has a  right to waive the advantage of a law, made for his benefit in his private  capacity, when a public right or public  policy  is not infringed thereby.  Section 1A was meant for the benefit of  owners of buildings constructed after January  1,  1951. But  there is no prohibition in the section against a  land- lord  and his tenant entering into an agreement,  that  they would  not  be governed by that section.   If  a  particular owner  did not want to avail himself of the benefit  of  the section,  there was no bar created by it to his  waiving  or giving  up  or abandoning the advantage and no  question  of policy,  or  public  policy  is  involved.   Therefore,  the performance  of the agreement in the present case would  not entail  the transgression of any law and the  agreement  was not void under s. 23 of the Indian Contract Act. [696 C; 69- 7 D-E; 698 A-C] Neminath Appayya Hanumannavar v.Jamboorao Sateppa  Kochteri, A.I.R. (1966) Mys. 154, approved.

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Vita  Food  Products  Incorporated  v.  Unus  Co.  Ltd.  (in Liquidation), (1939) AC. 277 at 291, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 18 of 1968. Appeal  by Special leave from the judgment and  order  dated April 14,,1967 of the Allahabad High Court in Second  Appeal No. 307 of 1965. 694 V.M.  Tarkunde, Urmila Kapoor and R. K. Khanna,  for  the appellant. S. V.  Gupte and M. V. Goswami, for the respondent. The Judgment of the Court was delivered by Grover, J This is an appeal by special leave from a judgment of  the  Allahabad  High Court  and  involves  the  question whether  the appellant, who was the tenant, was entitled  to the benefit of s. 3 of U.P. (Temporary) Control of Rent  and Eviction Act, 1947, hereinafter called the "Act". The  facts  are  not in dispute.   The  appellant  had  been occupying a shop in Mathura belonging to the respondent from a very long time, at a monthly rental of Rs. 18.37. In  1962 the respondent wanted to construct rooms on the upper Storey of the shop for his own residence.  This construction  could possibly be made only if the appellant vacated the shop  for some  period.   On  June  4, 1962,  the  appellant  and  the respondent  entered into an agreement . After  reciting  the above facts it was agreed that the shop would be. vacated by the appellant on the condition that as soon as the  required construction  had been completed he would resume  possession of  the  shop.  At this stage the following clauses  of  the agreement may be set out.               "1. On this day the second party has withdrawn               his possession from the shop bearing No. 1/2C,               situate  at Tilakdwar, and has given the  same               to the first party.               2.   The  first  party  shall  get  the   shop               constructed within thirty days and would  then               hand  over the possession of the same  to  the               second party.               3.    At  present  a  sum of  Rs.  18-6-0  per               mensem,  which  includes house tax  and  water               tax, is being paid by the second Party to  the               first  party as rent.  After the  construction               of the shop, the first party shall be entitled               to  get  the  same, amount as  rent  from  the               second  party.  All the sections of  the  U.P.               Rent  Control and Eviction Act shall be  fully               applicable  to  this house.  The  first  party               shall  in  no  case  be  entitled  to   derive               benefits  from it as the property built  after               1-1-51." After  the construction had been made and the appellant  had resumed  his  possession of the shop the  appellant  offered rent  to  the respondent but the latter did not  accept  the same.  Ultimately lie deposited the rent from April 1,  1962 to  July  31, 1963 in court under s. 7 C of  the  Act.   The respondent  served a notice April 20, 1963 apparently  under the provisions of the                             695 Transfer of Property Act purporting to terminate the tenancy of  the  appellant.  This was followed by a suit  which  the respondent  filed  for ejectment of the  appellant  and  for arrears of rent, damages etc.  The Munsif dismissed the suit

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holding  that the appellant was entitled to  the  protection conferred  by  s. 3 of the Act which  was  applicable.   The District  Judge,  on  appeal, took  the  contrary  view  and decreed the suit.  The’ High Court affirmed the judgment  of the  District  Judge.  It was held,  inter-alia,  that  the, respondent  was, entitled to rely on s. 1 A of the  Act  and the appellant could not be given the benefit of s. 3. Now there can be no manner of doubt that the tenancy between the  appellant  and  the  respondent  was  governed  by  the provisions  of  the Act prior to the reconstruction  of  the premises.   It appears to have been accepted that  when  the respondent  made  the re-construction  after  the  agreement mentioned above in 1962 the buildings came to be constructed within  the  terms of s. 1-A of the Act: That  section  says 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 will have to be decided whether it was open to the respondent 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  and  the respondent in June 1962. According   to  the  preamble  on  the  cessation   of   the applicability  of  sub-rule 2 of rule 81 of the  Defence  of India  Rules  after  September 30, 1946  it  was  considered expedient  owing  to the shortage of  accommodation  in  the State of Uttar Pradesh to provide for the continuance during admitted  period of powers to control the letting  and  "the rent of accommodation and to prevent the eviction of tenants therefrom.  Section 3 imposed restrictions on eviction.   No suit  could be filed in any civil court against  the  tenant for  his  eviction from any accommodation except on  one  or more of the grounds mentioned in sub-s. (1) ’of that section without the permission of the District Magistrate or of  the Commissioner to whom a revision lay against the order of the District   Magistrate.   Section  5   contained   provisions relating  to control of rent.  The ether provisions  of  the Act  need not be noticed.  It has never been  disputed  that the Act was enacted for affording protection to the  tenants against  eviction except in the manner provided by the  Act. It was also meant to regulate the letting of  accommodation, fixing  of rent etc., the provisions relating to which  were all  intended  to  confer benefits on  the  tenants  against unreasonable  and capricious demands of the  landlords.   At the same time’ it appears that the legislature was conscious of  the fact that the Act might retard and slacken the  pace of construction of new buildings because the landlords would naturally be reluctant to invest 696 money  in properties the letting of which would be  governed by  the  stringent provisions of the Act.  It was  for  that purpose  that the saving provision in s. 1-A seems  to  have been  inserted.   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  them  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. 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.   Thus  the

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maxim  which  sanction the nonobservance  of  the  statutory provision   is  cuilibet  licat  renuntiare  juri   pro   se introducto.  (See  Maxwell on  Interpretation  of  Statutes, Eleventh Edition, pages 375 & 376.) If there is any  express prohibition against contracting out of a statute in it  then no  question can arise of any one entering into  a  contract which   is  so  prohibited  but  where  there  is  no   such prohibition  it  win  have  to be seen  whether  an  Act  is intended to have a more extensive operation ’as a matter  of public  policy.   In Halsbury’s Laws of England,  Volume  8, Third Edition, it is stated in paragraph, 248 at page 143 :               "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." In  the  footnote  it is pointed out  that  there  are  many statutory provisions expressed to apply "notwithstanding any agreement to the contrary", and also a stipulation by  which a  lessee  is  deprived of his right  to  apply  for  relief against  forfeiture for breach of covenant (Law of  Property Act, 1925).  Section 23 of the Indian Contract Act provides "The  consideration  or object of an  agreement  is  lawful, unless- it is forbidden by law; or 69 7 is of such a nature that, if permitted, it would defeat  the provisions of any law or is fraudulent; or involves  or  implies injury to the person  or  property  of another; or the  Court  regards  it as immoral,  or  opposed  to  public policy. In  each of these cases, the consideration or object  of  an agreement is said to be unlawful.  Every agreement of  which the object or consideration is unlawful is void." It  has  never  been the case of  the  respondent  that  the consideration or object of the agreement which was  entered, into  in June 1963 was forbidden by law.  Reliance has  been placed mainly on the next part of the section, namely,  that it is of such a nature that it would defeat the provision of any  law and in the present case it would be s. 1-A  of  the Act. Now s. 1-A does not employ language containing a prohibition against or impose any restriction on a landlord and a tenant entering  into an agreement that they would not be  governed by  that  section.   We concur with the  view  expressed  in Neminath   Appayya   Hanumannavar   v.   Jamboorao   Satappa Kocheri(1) that the words "if permitted it would defeat  the provisions of any law" in s. 23 of the Contract Act defer to performance  of an agreement which necessarily  entails  the transgression  of the Provisions of any law.  What makes  an agreement,  which  is  other-wise legal, void  is  that  its performance  is  impossible except by disobedience  of  law. Clearly  no  question  of illegality can  arise  unless  the performance  of the unlawful act was necessarily the  effect of an agreement.  The following observations of Lord  Wright in  Vita Food Products Incorporated v. Unus Company  Ltd.(1) (in Liquidation) are noteworthy in this connection

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             "Nor  must  it be forgotten that the  rule  by               which  contracts  not expressly  forbidden  by               statute  or declared to be void are in  proper               cases nullified for disobedience to a  statute               is  a rule of public policy only,  and  public               policy  understood  in a wider  sense  may  at               times be better served by refusing to  nullify               a  bargain  save  on  serious  and  sufficient               grounds." We are unable to hold that the performance of the  agreement which  was entered into between the parties in  the  present case  would  involve  an illegal or unlawful  act.   In  our judgment s. 1-A. (1) A. I.R. [1966] Mysore 154. (2) [1939] A.C. 277, 293. 698 was meant for the benefit of owners of buildings which  were under  erection or were constructed after January  1,  1951. If  a particular owner did not wish to avail of the  benefit of that section there was no bar created by it in the way of his waiving, or giving up or abandoning the advantage or the benefit contemplated by the section.  No question of policy, much less public, policy, was involved and such a benefit or advantage could always be waived.  That is what was done  in the  present case and we are unable to agree with  the  High Court  that  the consideration or object  of  the  agreement entered  into between the parties in June 1962 was  unlawful in view of s. 23 of the Contract Act. In  the  result the appeal is allowed, the judgment  of  the High  Court  is  set  aside and  that  of  the  trial  court restored.   The appellant will be entitled to his  costs  in this, court. V.P.S.                           Appeal allowed. 699