REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5835 OF 2009 (Arising out of S.L.P. (Civil) No. 31047 of 2008)

The State of Maharashtra & Anr.                                           ….Appellants

Versus

M/s. Super Max International Pvt. Ltd. & Ors.            ….Respondents

J U D G M E N T

AFTAB ALAM, J.  

1. Leave granted.

2. The  Government  of  Maharashtra,  the  appellant  before  us,  is  in  

occupation of an area of 9000 sq. ft. (11,050 sq. ft. as per the affidavit-in-

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reply filed by the appellant) comprising the sixth floor of a building on a  

monthly  rental  of Rs. 5236.58/-,  besides water charges at the rate of Rs.  

515.35/- per month. The suit premises, used for housing the office of the  

Registrar  Co-operative  Societies  is  situate  at  Fort,  opposite  GPO,  (near  

C.S.T.  Railway Station) in the heart of the city of Mumbai. The appellant is  

in  occupation  of  the  suit  premises  since  1966.  At  that  time the  building  

belonged to the Maharaja of Travancore. Respondents 1 to 3 purchased it  

under a deed of assignment dated May 5, 1982 and stepped into the shoes of  

the landlord.

3. The appellant suffered a decree of ejectment passed by the Court of  

Small Causes on June 30, 2003 in RAE & R Suit No. 1233/3730 of 1986 on  

grounds of (i) default in payment of taxes and water charges as stipulated  

under  section  13(3)(a)  and  (ii)  reasonable  and  bona  fide need  of  the  

landlords, respondents 1 to 3 for their own use and occupation in terms of  

section  13(1)(g)  of  the  Bombay  Rents,  Hotel  and  Lodging  House  Rates  

Control  Act,  1947 (‘the  Bombay  Rent  Act’  or  ‘the  Act’  hereinafter).  Its  

appeal  (No.752/2003)  against  the  decree  was  dismissed  by  the  Division  

Bench of the Small  Causes Court by judgment and order dated April 28,  

2005.  

4. The  appellant  initially  filed  a  writ  petition  [W.P.  (C)  No.7361  of  

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2005] seeking to challenge the orders of ejectment. The Bombay High Court  

declined  to  entertain  it  on  the  ground  that  the  appellant  had  a  remedy  

available  to  it  under  the  Act  itself.  It,  accordingly,  disposed  of  the  writ  

petition by order dated March 15, 2007 leaving it open to the appellant to  

file a civil revision application as provided under section 35F(2) of the Act.  

The appellant  then  moved the  High Court  in  Civil  Revision Application  

No.78  of  2007  challenging  the  orders  of  its  ejectment.  The  High  Court  

admitted  the  Civil  Revision  on  December  10,  2007  and  issued  rule  on  

interim  relief  regarding  stay  of  execution  of  the  decree.  Later  on,  after  

hearing the parties the Court stayed the execution of the decree by order  

dated October 14, 2008 subject, however, to the condition that the appellant  

would deposit a sum of Rs. 5,40,000/- every month commencing from the  

date  of  the  decree  passed  by  the  trial  court.  The Court  directed  that  the  

amount in arrears should be deposited by January 10, 2009 and from that  

date the future deposits for every month should be made by the tenth of the  

next succeeding month. The Court, however, did not allow the landlords to  

take away the money but further directed that the deposits would be ad-hoc  

and  subject  to  further  order  in  the  revision  or  in  any  other  appropriate  

proceeding.  It  also  directed  the  office  to  invest  the  amount(s),  in  case  

deposited by the appellant, in a nationalized bank, initially for a period of  

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one year and then for further periods of one year each. The appellant finds  

the condition on which stay is granted highly onerous. But the respondents  

maintain  that  the  Court  has  been very liberal  with  the  appellant  and the  

amount of monthly deposit  fixed by the court is far less than the current  

market rent in that area.

5. Of late, orders are coming to this Court where, in cases arising from  

ejectment  proceedings,  the  High Courts,  with  a  view to  strike  a  balance  

between the competing interests of the landlord and the tenant, pass interim  

orders asking the tenant to pay to the landlord or deposit in court, as monthly  

rent, certain sum fixed by it (that, according to the High Court, should be the  

reasonable  market  rent  for  the  tenanted  premises),  far  in  excess  of  the  

existing monthly rent. In this case, while it was at the threshold, it was stated  

before this Court that two of its Division Bench decisions, one in Atma Ram  

Properties (P) Ltd. vs. Federal Motors (P) Ltd, (2005) 1 SCC 705 and the  

other in  Niyas Ahmad Khan vs. Mahmood Rahmat Ullah Khan, (2008) 7  

SCC 539  had  taken  conflicting  views  on  the  correctness  of  such  orders  

passed by the High Court. The case was, accordingly, directed to be placed  

before a three-Judge Bench and that is how it came to be heard before us.    

6. It may be stated at the outset that just a little scrutiny revealed that  

there was no conflict between Atma Ram Properties and Niyas Ahmad Khan.  

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In  Atma Ram Properties the tenant, having lost before the Rent Controller  

preferred an appeal before the Rent Control Tribunal. The Tribunal stayed  

the tenant’s eviction but subject to the condition that he would deposit in  

Court Rs.15,000/- per month, in addition to the contractual rent that might  

be paid directly to the landlord. The deposits made in the Court were not  

permitted to be withdrawn by any of the parties until the appeal was finally  

decided.  The  tenant  challenged  the  condition  attached  to  the  stay  order  

before  the  High  Court  in  a  petition  filed  under  Article  227  of  the  

Constitution of India. The High Court allowed the writ petition and set aside  

the condition imposed by the Tribunal. The effect of the order of the High  

Court was that during the pendency of the appeal before the Tribunal the  

tenant  would  continue  to  remain  in  occupation  of  the  suit  premises  “on  

payment of an amount equivalent to the contractual rate of rent”.  Against  

the High Court order the landlord came to this Court in appeal. This Court  

allowed the appeal, set aside the High Court order and restored the order  

passed by the Tribunal.

7. In Niyas Ahmed Khan, the position was quite different. The landlord’s  

application for eviction of the tenant on grounds of personal necessity was  

turned  down  by  the  prescribed  authority.  The  order  of  the  prescribed  

authority was confirmed by the appellate authority. The landlord challenged  

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the orders passed by the two authorities under the Rent Control Act in a writ  

petition filed before the Allahabad High Court and while admitting the writ  

petition  the Court gave an interim direction to the tenant to pay rent at the  

rate of Rs. 12,050/- per month (in place of the contractual monthly rent of  

Rs. 150/-). The Court further directed that if the rent fixed by it was not paid  

for two consecutive months the landlord could evict the tenant by coercive  

means taking the aid of police. In appeal by the tenant, this Court naturally  

frowned upon the interim order passed by the High Court and in paragraph  

10 of the decision observed as follows:

“10. To sum up, in writ petitions by landlords against rejection  of eviction petitions, there is no scope for issue of any interim  direction to the tenant to pay higher rent. But in writ petitions  by tenants against grant of eviction, the High Court may, as a  condition of stay, direct the tenant to pay higher rent during the  pendency  of  the  writ  petition.  This  again  is  subject  to  two  limitations. First, the condition should be reasonable. Second,  there should not be any bar in the respective State rent control  legislation  in  regard  to  such  increases  in  rent.  Be  that  as  it  may.”  

8. We,  thus,  find  no  inconsistency,  much  less  any  conflict  in  the  

decisions of this Court in Atma Ram Properties and Niyas Ahmed Khan. The  

decision in Niyas Ahmad Khan has no application to the facts of the present  

case and it seems to be covered by the decision of the Atma Ram Properties.

9. However,  Mr.  U.  U.  Lalit,  Senior  Advocate  appearing  for  the  

appellant, submitted that the decision in Atma Ram Properties would apply  

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only to cases under the Delhi Rent Control Act and shall have no application  

to tenancies governed by the provisions of the Bombay Rent Act. Mr. Lalit  

submitted that the Delhi Rent Control Act defined ‘tenant’ in a way as to  

exclude a person against whom a decree of eviction was passed. Section 2(l)  

of the Delhi Rent Control Act, 1958 defined tenant as:  

“2(l) "tenant" means…………but does not include, --- (A) any  person  against  whom an  order  or  decree  for  

eviction has been made,  except where such decree or  order  for  eviction is  liable  to  be  reopened under  the  proviso  to  section  3  of  the  Delhi  Rent  Control  (Amendment) Act, 1976 (18 of 1976).”

10. Mr. Lalit  submitted that under the Delhi Rent Control Act a tenant  

suffering a decree or order of eviction lost the status of ‘tenant’ and was  

consequently  stripped of  all  the protection  (including,  against  increase  in  

rent) provided by the Rent Control Act and in such a case it would be open  

to  the  appellate  or  the  revisional  authority  to  enhance  the  monthly  rent  

payable by him as a condition for granting stay of execution of the decree or  

order  as  held  in Atma  Ram  Properties.  This  exclusionary  clause  in  the  

definition of tenant was a special feature of the Delhi Rent Act and the Rent  

Acts of some other States,  e.g.  Madhya Pradesh, Rajasthan, etc.  But the  

position  under  the  Bombay  Rent  Act  was  materially  different.  In  the  

definition of "tenant" in the Bombay Act there was no exclusionary clause.  

Moreover,  in  the  Bombay  Rent  Act  there  were  a  number  of  provisions  

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creating an express bar against any enhancement of rent.

11. Learned  counsel  then  took  us  through  various  provisions  of  the  

Bombay  Rent  Act.  He  referred  to  section  5(11)  defining  "tenant"  and  

emphasised that this definition did not have any exclusionary clause as in  

section 2(1) of the Delhi Act.  Section 5(11) of the Bombay Rent Act reads  

as follows:

“5(11).  "tenant"   means  any  person  by  whom or  on  whose  account rent is payable for any premises and includes,-  

(a) such  sub-tenants  and  other  persons  as  have  derived  title  under a tenant before the 1st day of February 1973;

(aa) any person to whom interest in premises, has been assigned  or transferred as permitted or deemed to be permitted,  under  section 15;

(b) any person remaining after the determination of the lease,   in possession, with or without the assent of the landlord, of   the premises leased to such person or his predecessor who  has derived title before the first day of February 1973;

(bb)  such  licensees  as  share  deemed  to  be  tenants  for  the  purposes of this Act by Section 15A

(bba)  the  State  Government,  or  as  the  case  may  be,  the  Government  allottee,  referred  to  in  sub-clause  (b)  of  clause  (1A), deemed to be a tenant, for the purposes of this Act by  Section 15B;

(c)  (i) in relation to any premises let for residence, when the  tenant dies, whether the death has occurred before or after  the  commencement  of  the  Bombay  Rents,  Hotel  and  Lodging  House  Rates  Control  (Amendment)  Act,  1978,  any member of the tenant’s family residing with the tenant  

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at the time of his death or, in the absence of such member,  any  heir  of  the  deceased  tenant,  as  may  be  decided  in  default of agreement by the Court;

(ii)  in relation to any permission let  for the purposes of  education, business, trade or storage, when the tenant dies,  whether  the  death  as  occurred  before  or  after  the  commencement  of  the  said  Act,  any  member  of  the  tenant’s  family  using  the  premises  for  the  purposes  of  education of carrying on business, trade or storage in the  premises, with the tenant at the time of his death, or, in the  absence of such member, any heir of the deceased tenant,  as may be decided in default of agreement by the court.  

Explanation- The provisions of this clause for transmission of  tenancy,  shall  not  be  restricted  to  the  death  of  the  original  tenant,  but  shall  apply,  and shall  be deemed always  to  have  applied,  even  on  the  death  of  any  subsequent  tenant,  who  becomes tenant under these provisions on the death of the last  preceding tenant.”                                                              (emphasis added)

12. He then referred to the definition of “standard rent” as contained in  

section 5(10) of the Act. The provision is as under:    

“5(10). "standard rent" in relation to any premises means,-  

(a)  where  the  standard  rent  is  fixed  by  the  Court  and  the  Controller  respectively  under  the  Bombay  Rent  Restriction  Act,  1939,  or  the Bombay Rents,  Hotel Rates and Lodging  House Rates (Control) Act, 1944, such standard rent; or

(b) when the standard rent is not so fixed,-

subject to the provisions of section 11,  

(i) the rent at which the premises were let on the first day  of September 1940, or

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(ii) where they were not let on the first day of September  1940, the rent at which they were last let before that day,  or

(iii)  where  they  were  first  let  after  the  first  day  of   September 1940, the rent at which they were first let, or   (iii-a)  notwithstanding  anything  contained  in  paragraph  (iii),  the  rent  of  the  premises  referred  to  in  sub-section  (1-A) of section 4 shall,  on expiry of the period of five  years mentioned in that sub-section, not exceed the amount  equivalent to the amount of net return of fifteen percent, on  the  investment  in  the  land  and  building  and  all  the  outgoings in respect of such premises; or

(iv) on any of the cases specified in section 11,

the rent fixed by the Court.”

13. Mr. Lalit submitted that by virtue of section 5(10)(b) the standard rent  

under the Bombay Rent Act was attached to the premises. It was, therefore,  

constant  and  not  subject  to  any  revision  on  change  in  tenancy.  In  other  

words even if  the appellant  ceased to be a tenant and is  thrown out,  the  

respondents can induct another tenant only on the same “standard rent”, that  

is, Rs.5236.58/- besides water charges at the rate of Rs.515.35/- per month.  

He further submitted that except in circumstances as provided under sections  

10 (increase in rent on account of payment of rates, etc); 10A (increase in  

rent in respect of premises that were let out on or before September 1, 1940),  

10B (saving increase in rent under the previous provisions from the bar of  

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section 7), and 11 (increase in rent resulting from ‘standard rent’ fixed by  

the court in certain cases) any increment of rent was expressly barred under  

section 7 of the Act.  

14. Mr.  Lalit  submitted  that  in  view  of  section  5(11)  of  the  Act  the  

appellant  continued  to  be  a  tenant  within  the  meaning  of  the  Act  

notwithstanding the decrees of ejectment passed by the Small Causes Court.  

It, therefore, followed that the appellant enjoyed all the protections provided  

under the Act and in light of the provisions referred to above any direction to  

pay, as monthly rent, any amount in excess of the standard rent was contrary  

to law and unsustainable.  

15. Before  proceeding  to  examine  Mr.  Lalit’s  submissions  we  may  

observe that earlier a three-Judge Bench of this Court in Malpe Vishwanath  

Acharya & Ors. vs. State of Maharashtra & Anr., (1998) 2 SCC 1, found  

and  held  that  the  provisions  of  the  Bombay  Rent  Act  relating  to  the  

determination and fixation of ‘standard rent’ can no longer be considered to  

be reasonable. The only reason why, despite the finding, the Court did not  

strike down those provisions was that the Bombay Rent Act was to come to  

an end on March 31, 1998 and the Court was informed that the State was in  

the process of enacting a new Rent Control Act that would be just and fair  

and would follow the National Model Law that was circulated by the Central  

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Government in 1992. After the decision of the Court in Malpe Vishwanath  

Acharya the Bombay Rent Act was indeed replaced by the Maharashtra Rent  

Control Act, 1999 that came into force with effect from March 31, 2000.  

But  Mr.  Rohatgi,  learned  Senior  counsel  appearing  for  the  respondents,  

strongly contended that the Maharashtra Rent Control Act completely belied  

the hopes expressed by the Court under which it had refrained from striking  

down  the  offending  provisions  in  the  Bombay  Rent  Act.  Mr.  Rohatgi  

submitted that the Maharashtra Rent Control Act merely brought about some  

cosmetic changes but retained the substance of the earlier Bombay Rent Act.  

Referring  to  the  definition  of  “standard  rent”  in  section  7(14)  of  the  

Maharashtra Rent Control Act, Mr. Rohatgi submitted that it merely shifted  

the date from September 1, 1940 to October 1, 1987 for pegging the standard  

rent which continued to be attached to the premises and was not amenable to  

any revision on change of tenancy.

16. The issue of reasonableness of the provisions of the Maharashtra Rent  

Control Act, 1999 or the Bombay Rent Act do not arise in this case and,  

therefore, we refrain from making any observations in that regard but we do  

feel  that  the  reasonableness  or  otherwise  of  the  provisions  of  the  

Maharashtra Rent Control Act may have to be seriously examined by this  

Court in an appropriate case.  

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17. Coming back to the case in hand, Mr. Lalit argued that in spite of the  

decrees of eviction passed by competent courts, the appellant continued to  

be a "tenant" within the meaning of the Bombay Rent Act until, in execution  

of the decree it was physically evicted from the suit premises. The tenancy  

did not come to end on the passing of the decree but would continue as long  

as the appellant was in actual physical possession of the suit premises;  a  

priori it enjoyed all the protection under the Bombay Rent Act and specially  

those laying down the bar against any increase in rent.  In support of the  

contention  he  relied  upon  two  sets  of  decisions,  one  on  the  issue  of  

heritability of tenancy under the Rent Acts and the other on the question  

whether a tenant could be evicted on the basis of a decree made under the  

general law in case after the decree was passed the rented premises came to  

be covered by the Rent Act. The first set comprises three decisions of this  

Court in (i) Damadilal & Ors. vs. Parashram & Ors., (1976) 4 SCC 855, (ii)  

Ganpat Ladha vs. Shashi Kant Vishnu Shinde,  (1978) 2 SCC 573 and (iii)  

Gian Devi Anand vs. Jeevan Kumar (1985) 2 SCC 683. The second set also  

has three decisions. Those are (i)  Mani Subrat Jain vs. Raja Ram Vohra,   

(1980) 1 SCC 1, (ii) H. Shiva Rao vs. Cecilia Pereira (1987) 1 SCC 258 and  

(iii) Dilip vs. Mohd. Azizul Haq & Anr., (2000) 3 SCC 607.

18. Dealing with the three decisions in the first set, Mr. Lalit submitted  

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that  Damadilal fully  supported  his  contention.  The  decision  in  Ganpat  

Ladha took a contrary view but later  in  Gian Devi Anand a Constitution  

Bench overruled  Ganpat Ladha  and approved  Damadilal thus, reinforcing  

the submission made on behalf of the appellant.   

19. The  case  of  Damadilal arose  under  the  Madhya  Pradesh  

Accommodation Control Act, 1961. The suit premise was a house in a bazar  

that was let out to the two defendants (the tenants) for business purposes.  

The question that arose in the case was whether on the death of the two  

tenants during the pendency of their second appeal before the High Court,  

their  respective  heirs  and  legal  representatives  had  the  right  to  get  

themselves substituted in place of the original appellants-tenants and pursue  

the reliefs sought for by them. The High Court permitted substitution and  

eventually  allowed  the  second  appeal,  setting  aside  the  eviction  decrees  

passed by the courts below. The High Court judgment was challenged before  

this Court in appeal. One of the grounds on which the High Court judgment  

was  assailed  by  the  appellants-landlords  was  that  after  their  contractual  

tenancy was determined the two original tenants were reduced to the status  

of statutory tenants having no heritable interest in the demised premises and  

on their death the right to prosecute their appeal did not survive for their  

heirs  and legal  representatives.  In  support  of  the contention reliance was  

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placed on two earlier decisions of the Court in Anand Nivas (Private) Ltd.   

vs. Anandji Kalyanji Pedhi (1964) 4 SCR 892 (arising under Bombay Rents,  

Hotel and Lodging House Rates Control Act, 1947) and  Jagdish Chander  

Chatterjee vs. Sri Kishan (1973) 1 SCR 850 [arising under the Rajasthan  

Premises (Control of Rent and Eviction) Act, 1950]. A three-Judge Bench of  

this  Court rejected the contention raised on behalf of the appellants.  The  

decision  in  Damadilal pointed  out  that  the  term ‘statutory  tenancy’  was  

borrowed from the English Rent Acts and along with the expression certain  

legal notions, peculiar to the English Common Law, had also found their  

way in some Indian decisions though those concepts had no basis in the Rent  

Acts of this country. The Court observed that the courts in England had held  

that a statutory tenant had no estate or property in the occupied premises  

since he retained possession by virtue of the Rent Act(s) and not as being  

entitled to tenancy. It was said that he had only a personal right to remain in  

occupation,  the statutory right of “irremovability  and nothing more”.  The  

position in this country, however, was quite different. In paragraph 11 of the  

decision it was observed as follows:  

“We find it difficult to appreciate how in this country we can  proceed on the basis that  a tenant whose contractual  tenancy  has  determined but  who is  protected  against  eviction  by  the  statute,  has no right  of  property but  only a personal  right  to  remain in occupation, without ascertaining what his rights are  under the statute. The concept of a statutory tenant having no  

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estate or property in the premises which he occupies is derived  from the provisions of the English Rent Acts. But it is not clear  how it  can  be  assumed that  the  position is  the  same in  this  country without any reference to the provisions of the relevant  statute. Tenancy has its origin in contract. There is no dispute  that a contractual tenant has an estate or property in the subject-  matter  of  the  tenancy,  and  heritability  is  an  incident  of  the  tenancy.  It  cannot  be  assumed,  however,  that  with  the  determination  of  the  tenancy  the  estate  must  necessarily  disappear  and  the  statute  can  only  preserve  his  status  of  irremovability and not the estate he had in the premises in his  occupation.  It  is  not  possible  to  claim that  the  ‘sanctity’  of  contract  cannot  be  touched  by  legislation.  It  is  therefore  necessary  to  examine  the  provisions  of  the  Madhya  Pradesh  Accommodation  Control  Act,  1961  to  find  out  whether  the  respondents’  predecessors-in-interest  retained  a  heritable  interest in the disputed premises even after the termination of  their tenancy”

20. The decision  then went  on to  examine  section  2(i)  of  the  Madhya  

Pradesh Accommodation Control Act that defined ‘tenant’ and section 14  

that  provided for restrictions on subletting and held that those provisions  

supported the view taken by the Court that the statutory tenant retained as  

much interest in the demised premises as a contractual tenant.

21. The case of Ganpat Ladha arose under the Bombay Rents, Hotel and  

Lodging House Rates Control Act, 1947 and the premises from which the  

tenant  was  sought  to  be  evicted  was  a  shop let  out  to  him for  business  

purpose.  The  trial  court  and  the  appellate  court  decreed  the  suit  on  the  

findings that the tenant had failed to make payment of the arrears of rent  

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even after a valid notice of demand was given to him by the landlord and  

further that he was not entitled to the protection of section 12(3)(b) of the  

Act. The tenant challenged the decrees passed by the courts below before the  

High Court in an application under Article 227 of the Constitution. During  

the pendency of the writ petition before the High Court the tenant died and  

her son was impleaded in her place to pursue the reliefs prayed for in the  

writ  petition.  The High Court eventually allowed the writ  petition on the  

ground that despite the default in payment of arrears of rent, the trial court  

could exercise its discretion in favour of the tenant and decline to pass a  

decree of eviction. The matter finally came to this Court in appeal preferred  

by landlord. A three-Judge Bench of the Court allowed the appeal inter alia  

holding that after the death of the original tenant her son could not claim to  

be a tenant within the meaning of the Act. The decision in Ganpat Ladha is  

based  entirely  on  interpretation  of  the  definition  of  ‘tenant’  under  the  

Bombay  Rent  Act.  The  Court  noticed  section  5(11)  defining  tenant  and  

reproduced the section insofar as it was relevant to the case as follows:

“5.  (11)  ‘tenant’  means  any  person  by  whom  or  on  whose  account rent is payable for any premises and includes-  

(a) . . . . .  (b) . . . . . (c) any member of the tenant’s family  residing with him  at  

the time of  his  death as  may be decided in default  of  agreement by the Court”

17

22. The  Court  held  that  section  5(11)(c)  restricted  the  heritability  of  

tenancy only to a member of the tenant’s family who might be residing with  

him at the time of his death. This in turn implied that heritability of tenancy  

was  confined  only  to  residential  premises  and  the  benefit  could  not  be  

extended to business premises. The Court held as follows:

“This  principle  underlying  the  enactment  of  Section 5(11)(c)  also goes to indicate that it is in respect of residential premises  that the protection of that section is intended to be given. We  can appreciate a provision being made in respect of business  premises  that  on  the  death  of  a  tenant  in  respect  of  such  premises,  any  member  of  the  tenant’s  family  carrying  on  business  with  the  tenant  in  such premises  at  the  time of  his  death shall be a tenant and the protection of the Rent Act shall  be  available  to  him.  But  we  fail  to  see  what  purpose  the  legislature could have had in view in according protection in  respect of business premises to a member of the tenant’s family  residing with him at the time of his death. The basic postulate  of  protection  under  the  Rent  Act  is  that  the  person  who  is  sought to be protected must be in possession of the premises  and his possession is protected by the legislation. But in case of  business premises, a member of the family of tenants residing  with him at the time of his death may not be in possession of  the business premises”  

23. In Ganpat Ladha this Court approved the decision of the Gujarat High  

Court  in  Parubai  Manilal  Brahmin  vs.  Baldevdas  Zaverbhai  Tapodhan  

(1964) 5 Guj LR 563 and in support of the view taken by it also cited the  

amendment introduced by the Gujarat Legislature in section 5(11)(c) of the  

Bombay Rent Act. It needs to be stated here that in Ganpat Ladha the earlier  

18

decision in  Damadilal was not brought to the notice of the Court and the  

Court did not go into the question whether a tenant on his death left behind  

any heritable estate or interest in the tenanted premises.  

24. Gian Devi is a decision by a Constitution Bench of five Judges. The  

case arose under the Delhi Rent Control Act, 1958 and the tenanted premises  

was  once  again  a  shop.  The  question  that  the  Court  framed  for  its  

consideration was as under:

“To state it more precisely, the question is whether the heirs of  a  deceased  tenant  whose  contractual  tenancy  in  respect  of  commercial  premises has been determined, are entitled to the  same  protection  against  eviction  afforded  by  the  Act  of  the  tenant”

25. In  this  case,  the  Constitution  Bench  considered  both  the  earlier  

decisions in Damadilal and in Ganpat Ladha. It also considered the earlier  

seven-Judge Bench decision in  V. Dhanapal Chettiar  vs.  Yesodai Ammal  

(1980) 1 SCR 334 besides several other decision of the Court. In Gian Devi,  

as in Damadilal, the Court observed that the expression statutory tenant was  

used in English Rent Acts and the concept that a statutory tenant had no  

estate or interest in the demised premises was peculiar to the English Law. It  

had no basis in the provisions of the Rent Acts of the different States of this  

country. Referring to the earlier decision in  Damadilal in paragraph 25 of  

the judgment the Court observed as follows:

19

“This Court has very aptly observed in Damadilal case that it  cannot be assumed that with the determination of the tenancy,  the estate must necessarily disappear and the statute can only  preserve the status of irremovability and not the estate he has in  the premises in his occupation”

In the same paragraph,  the decision reproduced Section 2(l)  of the Delhi  

Rent Control Act that defined tenant both as it stood prior to and after its  

amendment by Act 18 of 1976 and observed as follows:

“It is, therefore, clear from the definition of tenant, whether in  the original Act or in the amended Act, that the tenant within  the meaning of the definition of the term in the Act includes  any person continuing in possession after the termination of his  tenancy. It will be seen that the definition of tenant in Madhya   Pradesh  Accommodation  Control  Act,  1961  on  which  the   decision  in  Damadilal  case  mainly  turns,  is  similar  to  the   definition of tenant as given in the Delhi Act in the sense that   the tenant under both the Acts includes for the purpose of Rent   Act any person continuing in possession after the termination  of tenancy.”  

  (emphasis added)  

In this regard in paragraph 31 of the decision, it observed as follows:  

“The  very  premise,  on  the  basis  of  which  the  argument  is  advanced, is, in our opinion, unsound. The termination of the  contractual tenancy in view of the definition of tenant in the Act  does not bring about any change in the status and legal position  of the tenant, unless there are contrary provisions in the Act;  and, the tenant notwithstanding the termination of tenancy does  enjoy an estate or interest in the tenanted premises. This interest  or estate which the tenant under the Act despite termination of  the contractual  tenancy continues to enjoy creates a heritable  interest  in  the  absence  of  any provision  to  the  contrary.  We  have  earlier  noticed the  decision  of  this  Court  in  Damadilal   case. This view has been taken by this Court in Damadilal case  

20

and in our opinion this decision represents the correct position  in law. The observations of this Court in the decision of the  seven-Judge  Bench  in  the  case  of  V.  Dhanapal  Chettiar  vs.   Yesodai  Ammal  which  we  have  earlier  quoted  appear  to  conclude the question.”

In paragraph 33 of the decision the Court expressed its inability to agree  

with the observations made by the three-Judge bench in Ganpat Ladha and  

in  paragraph  35 it  stated  more  explicitly  that  the  view expressed  by  the  

Court in Ganpat Ladha and the observations made therein do not lay down  

the correct law.  

26. In conclusion the Constitution Bench, in paragraph 36 of the decision,  

held and observed as follows:

“Accordingly, we hold that the Rent Act in question defines a  tenant in substance to mean ‘a tenant who continues to remain  in  possession  even  after  the  termination  of  the  contractual  tenancy till  a  decree  for  eviction against  him is  passed’,  the  tenant even after the determination of the tenancy continues to  have  an  estate  or  interest  in  the  tenanted  premises  and  the  tenancy  rights  both  in  respect  of  residential  premises  and  commercial  premises are heritable. The heirs of the deceased  tenant in the absence of any provision in the Rent Act to the  contrary will step into the position of the deceased tenant and  all the rights and obligations of the deceased tenant including  the  protection  afforded to  the  deceased tenant  under  the  Act  will  devolve  on  the  heirs  of  the  deceased  tenant.  As  the  protection  afforded  by  the  Rent  Act  to  a  tenant  after  determination of the tenancy and to his heirs on the death of  such tenant is a creation of the Act for the benefit of the tenants,  it is open to the Legislature which provides for such protection  to make appropriate provisions in the Act with regard to the  nature and extent of the benefit and protection to be enjoyed  and  the  manner  in  which  the  same  is  to  be  enjoyed.  If  the  

21

Legislature  makes  any  provision  in  the  Act  limiting  or  restricting  the  benefit  and the  nature  of  the  protection  to  be  enjoyed in a specified manner by any particular class of heirs of  the deceased tenant on any condition laid down being fulfilled,  the benefit of the protection has necessarily to be enjoyed on  the fulfillment of the condition in the manner and to the extent  stipulated in the Act. The Legislature which by the Rent Act  seeks  to  confer  the  benefit  on  the  tenants  and  to  afford  protection  against  eviction,  is  perfectly  competent  to  make  appropriate provision regulating the nature of protection and the  manner and extent of enjoyment of such tenancy rights after the  termination of contractual tenancy of the tenant including the  rights and the nature of protection of the heirs on the death of  the  tenant.  Such  appropriate  provision  maybe  made  by  the  Legislature  both  with  regard  to  the  residential  tenancy  and  commercial tenancy. It is, however, entirely for the Legislature  to decide whether the Legislature will make such provision or  not.  In  the  absence  of  any  provision  regulating  the  right  of  inheritance, and the manner and the extent thereof and in the  absence of  any condition being stipulated  with  regard to  the  devolution of tenancy rights on the heirs on the death of the  tenant, the devolution of tenancy rights must necessarily be in  accordance with the ordinary law of succession.”  

27. On the basis of the decisions in Damadilal and Gian Devi Anand Mr.  

Lalit  strongly contended that  when a  tenant,  having suffered a  decree  of  

eviction, on his death left behind sufficient protection under the law for his  

heirs and legal representatives to step into his shoes and resist the eviction  

sought for by the landlord how can it be that a tenant suffering a decree of  

eviction would himself lose the statutory protection against increase in rent.  

The submission is indeed attractive but a little scrutiny would show that it is  

quite misconceived. It may be recalled that the decision in Damidilal was  

22

under the Madhya Pradesh Accommodation Control  Act,  1961 and  Gian  

Devi Anand  under the Delhi Rent Control Act, 1958. In both the Acts the  

definition  of  "tenant"  had  the  qualification  that  Mr.  Lalit  termed  as  the  

exclusionary clause:   

“ "tenant" means…………but does not include, --- (A)  any  person  against  whom  an  order  or  decree  for  eviction has been made”

In both the decisions, the definition of "tenant" as appearing in the Madhya  

Pradesh  and the  Delhi  Acts  respectively  were  reproduced.  But  for  some  

reason, in those two decisions, the Court did not take any notice of that part  

of the definition. In the Constitution Bench decision in  Gian Devi Anand,  

after reproducing in full the definition of tenant as contained in section 2(l)  

of the Delhi Rent Control Act, the Court observed (at the end of paragraph  

25):

“It is therefore, clear from the definition of tenant, whether in  the original Act or in the amended Act, that the tenant within  the meaning of the definition of the term in the Act includes  any person continuing in possession after the termination of his  tenancy.”

It is, thus, to be seen that the Court noticed that a person who continued to  

be in possession after termination of his (contractual) tenancy was covered  

by the definition of tenant but did not pay any attention to the latter part of  

the definition that excluded any person against whom an order or decree of  

23

eviction had been made.       

28. Here,  it  may  further  be  recalled  that  the  decision  in  Atma  Ram  

Properties was  also  under  the  Delhi  Rent  Control  Act.  Hence,  if  the  

submissions of Mr. Lalit are to be accepted then it would follow that Atma  

Ram Properties was wrongly decided. But Mr. Lalit himself did not take that  

position  (and  he  could  not  have  taken  that  position!).  He  only  tried  to  

distinguish the decision in Atma Ram Properties by contending that it would  

not  apply to a case under the Bombay Rent Act because in that  Act the  

definition of "tenant" was materially different. The distinction sought to be  

made  by  the  learned  counsel,  thus,  appears  to  be  unfounded  and  the  

submission seems to be inconsistent.

29. But  the  basic  flaw in  the  submission  is  that  it  overlooks  that  the  

decisions  in  Damadilal  and  Gian Devi  Anand were rendered in  a  totally  

different context. In those two decisions the Court proceeded on the basis  

that the determination of contractual tenancy did not extinguish the rights of  

the tenant. Under the Rent Act the tenant continued to retain his estate and  

interests  in the demised premises that,  after  his death, devolved upon his  

heirs and legal representatives. Further, in both  Damadilal and  Gian Devi   

Anand the underlying concern of the Court was to save the heirs and legal  

representatives of the deceased tenants from two misfortunes befalling them  

24

at the same time; one, the death of the bread winner and the other, the loss of  

the bread altogether as a consequence of the closure of business resulting  

from ejectment from the tenanted business  premises.  In  Ganpat  Ladha a  

three-Judge Bench of the Court had held that (under the Bombay Rent Act)  

the  devolution  of  tenancy  could  take  place  only  in  case  of  residential  

premises and not in case of business premises. Disagreeing with that view  

the Constitution Bench in Gian Devi Anand (in paragraph 34 of the decision)  

observed as follows:

“The death of the person who happens to be the tenant of the  commercial premises and who was running the business out of  the income of which the family used to be maintained, is itself a  great  loss to the  members  of  the family to  whom the death,  naturally, comes as a great blow. Usually, on the death of the  person who runs the business and maintains his family out of  the income of the business,  the other members of the family  who suffer  the bereavement  have necessarily  to carry on the  business  for  the  maintenance  and  support  of  the  family.  A  running business is  indeed a very valuable asset  and often a  great source of comfort to the family as the business keeps the  family  going.…………  The  Legislature  could  never  have  possibly  intended  that  with  the  death  of  a  tenant  of  the  commercial  premises,  the  business  carried  on  by  the  tenant,  however flourishing it may be and even if the same constituted  the source of livelihood of  the members of the family,  must  necessarily  come to  an end on the  death  of  the  tenant,  only  because the tenant died after the contractual tenancy had been  terminated.  It  could  never  have  been  the  intention  of  the  Legislature that the entire family of a tenant depending upon  the  business  carried  on  by  the  tenant  will  be  completely  stranded and the business carried on for years in the premises  which had been let out to the tenant must stop functioning at the  premises  which  the  heirs  of  the  deceased  tenant  must  

25

necessarily vacate, as they are afforded no protection under the  Act.”

30. In light of the discussion above we are of the considered view that the  

appellant in this case cannot derive any support from the decisions of this  

Court in Damadilal and Gian Devi Anand.

31. Coming now to the second set of decisions, the case of Mani Subrat  

Jain arose from an order of the appellant’s eviction in execution of a decree  

made against him. The appellant was an advocate and thus belonged to a  

‘scheduled’  class  of  tenants  whose  dwellings  enjoyed  special  protection  

under  the  East  Punjab Rent  Restriction Act,  1949.  In  a  suit  filed  by  the  

respondent-landlord for recovery of possession of the demised premises the  

appellant entered into a compromise and agreed to vacate the premises by a  

certain date on certain terms regarding rent etc. The Court passed a consent  

decree on the basis of the agreement entered into by the parties. The decree  

was passed on October 9, 1972. Shortly thereafter the area of application of  

the East Punjab Rent Restriction Act,  1949 was extended and with effect  

from November4, 1992 it came to apply to Chandigarh (where the rented  

property was situated). The appellant did not vacate the premises as agreed  

and the decree was put to execution. The execution court ordered eviction  

and the order was affirmed by all the superior courts till the matter finally  

reached this Court. Before this Court, the appellant took the stand that the  

26

rented premises having come under the Rent Control Act he could not be  

ejected on the basis of a decree passed earlier.  The Court found that the  

decision of the case would turn on the question whether or not the appellant  

was covered by the definition of tenant under the Rent Act and observed as  

follows:

“The salvation of  the appellant  is  certain if  he be a ‘tenant’  within  the meaning  of  the  Act.  His  eviction is  certain if  the  definition ‘tenant’ does not ensconce him in its amplitude.”

32. The Court then, brushing aside the precedents cited by the two sides,  

proceeded to examine the question in light of section 2(i) (containing the  

definition of ‘tenant’) and section 13 (laying down the grounds on which  

alone  a  tenant  could  be  evicted)  and  reproduced  the  two  provisions  as  

follows:  

“2 (i) ‘tenant’ means any person by whom or on whose account  rent  is  payable  for  a  building or  rented land and  includes a  tenant continuing in possession  after the termination of the  tenancy in his favour, but does not include a person placed in  occupation  of  a  building or  rented  land by its  tenant,  unless  with the consent in writing of the landlord, or a person to whom  the collection of rent or fees in a public market, cart-stand or  slaughter house or of rents for shops has been framed out or  leased by a municipal, town or notified area committee.

13.  Eviction  of  tenants-  (1)  A  tenant  in  possession  of  a  building  or  rented  land  shall  not  be  evicted  therefrom  in  execution  of  a  decree  passed  before  or  after  the  commencement of this Act  or otherwise and whether before  or after the termination of the tenancy, except in accordance  

27

with the provisions of this section, or in pursuance of an order  made under Section 13 of the Punjab Urban Rent Restriction  Act, 1947, as subsequently amended.”

       (emphasis in the original)

33. Having thus taken note of the two provisions, the Court arrived at the  

inevitable conclusion as follows:

“The  expression  ‘tenant’  includes  ‘a  tenant  continuing  in  possession after the termination of the tenancy in his favour’. It  thus includes, by express provision, a quondam tenant whose  nexus with the property is continuance in possession. The fact  that  a  decree  or  any  other  process  extinguishes  the  tenancy  under the general law of real property does not terminate the  status of a tenant under the Act having regard to the carefully  drawn inclusive clause.”

It, however, appears that the parties entered into yet another agreement while  

the matter was pending before this Court and hence, the operative order in  

the judgment reads as follows:

“Krishna  Iyer,  J.-  The  judgment  having  been  delivered  counsel  for  the  respondent  represented  that  the  Agreement,  which  has  been  made  and  appendixed  to  the  judgment,  be  treated as an undertaking mutually between the parties to the  Court. Counsel on both sides have no objection to this course  and so we record the Agreement incorporated in the judgment  as an undertaking to the Court made by the parties in regard to  their respective obligations.”

34. Interestingly  in  Mani  Subrat  Jain the  very  first  sentence  of  the  

judgment gives sufficient indication how the decision is going to end up.  

Krishna Iyer, J. writing for the Court in his inimitably grandiloquent style  

28

started the judgment by referring to the “Holmesian homily” and thereby  

making it clear that the Court would bestow its “humane attention” on the  

matter not through logic but on the basis of “experience”. From the start to  

the end the Court made clear its intent to stand firmly by the side of the  

tenant.  We may concede  that  the  tenant  who was  also  an  advocate  was  

entitled to be doubly protected by the law. We may also try to comprehend  

the legalese of the debate as reflected in the judgment. But we have real  

problem in following the message the decision in Mani Subrat Jain gave to  

the ordinary man. That to go back on one’s solemn word given to the other  

side before a Court of law is no sin. On the contrary one may derive rich  

dividend before the highest Court of the land, provided one is a tenant. To,  

sometimes, divorce logic from the law is one thing but to divorce morality  

altogether from the law is something quite different.      

35. The  case  of  H.  Shiva  Rao  v.  Cecilia  Pereira arose  on  facts  very  

similar to the case of Mani Subrat Jain (except that in this case the decree of  

eviction  was  passed  on  contest  and  not  on  the  basis  of  any  agreement  

between the parties). Following the earlier decision in Mani Subrat Jain this  

Court allowed the tenant’s appeal and held that he could not be evicted in  

execution of the decree since after the decree was made the rented premises  

came under  the  Karnataka  Rent  Control  Act  as  a  result  of  the  territorial  

29

extension in regard to the application of the Act. In  H. Shiva Rao too the  

Court’s strong sympathy for the tenant is evident from paragraphs 5 and 7 of  

the judgment.  

36. Dilip vs. Mohd. Azizul Haq is the third and the last decision in the  

second set of decisions cited by Mr. Lalit. In this case the High Court had  

taken the view that an appeal preferred by the tenant against  a decree of  

eviction passed by the trial court was not covered by the expression “in a  

suit or proceeding filed and pending against the tenant in any court or before  

any authority” as occurring in clause 13-A of the C.P. and Berar Letting of  

Houses Rent Control order, 1949. Clause 13-A of the order was as follows:

“No decree for eviction shall be passed in a suit or proceeding  filed and pending against the tenant in any court or before any  authority unless the landlord produces a written permission of  the Controller as required by sub-clause (1) of clause 13”

This  Court  reversed  the  High  Court  decision  relying  on  some  earlier  

decisions and holding that an appeal, even though filed by the tenant, was a  

continuation of the suit and hence, covered by the expression used in clause  

13-A. The decision in Dilip also referred to the earlier decision in H. Shiva  

Rao but this decision does not seem to have any relevance to the case in  

hand.

37. It is not difficult to distinguish the decisions in Mani Subrat Jain and  

H. Shiva Rao from the case in hand. Once the tenanted premises came under  

30

the Rent Act the tenant could only be evicted on the basis of a decree passed  

under the Rent Act. But unlike the present appellant, the tenants in Mani  

Subrat  Jain and  H.  Shiva  Rao had  not  suffered  any  decree  under  the  

respective Rent Acts.

38. It needs to be stated here that the decisions relied upon by Mr. Lalit  

are  undoubtedly  binding  precedents  for  the  respective  issues  decided  in  

those cases but it is not possible to stretch those decisions in support of the  

point canvassed by him. We must also state here that on the basis of the  

aforementioned  decisions  Mr.  Lalit  was  able  to  build  up  a  persuasive  

argument. But in the larger perspective and with the change in times we find  

the submissions quite inacceptable. Here it is important to bear in mind that  

all the decisions relied upon by Mr. Lalit, from Damadilal to H. Shiva Rao  

were  rendered  between  1976  to  1986  during  the  period  when,  to  put  it  

mildly, the Court used to be overly protective of the tenant and for good  

reasons too because that is the apparent thrust of the Rent Act. The Rent Act  

was the socio-legal response to certain historical developments, namely, the  

acute shortage of housing in the aftermath of the World War, the great influx  

of refugees in a number of States of the Union following the partition of the  

country and the massive migration inside the country from rural areas to the  

urban centres as a result of rapid urbanisation. All these developments that  

31

took place almost at the same time skewed the law of supply and demand  

totally in favour of the landlord.  The need of the hour,  therefore,  was to  

protect  the tenant,  who would have otherwise been left completely at the  

mercy of the landlord. The legislature intervened and brought in the Rent  

Act,  severely  restricting  the  grounds  for  enhancement  of  rent  and  for  

eviction  of  the  tenant  from  the  rented  premises,  thus  regulating  the  

relationship  between the landlord  and the tenant  beyond  the  general  law  

under the Transfer of Property Act, 1882. In this regard the Court responded  

in equal, if not greater measures. But after about three quarters of a century  

and three generations later when things are no longer the same and the urban  

centres are faced with newer problems, some of those having their origin in  

the Rent Act itself, there is the need to take a re-look on the Court’s attitude  

towards the relationship between the landlord and the tenant and to provide  

for a more level ground in the judicial arena.

39. The way this Court has been looking at the relationship between the  

Landlord and the Tenant in the past and the shift in the Court’s approach in  

recent times have been examined in some detail in the decision in Satyawati   

Sharma vs. Union of India & Anr., (2008) 5 SCC 287. In that decision one  

of us (Singhvi,  J.) speaking for the Court referred to a number of earlier  

decisions of the Court and (in paragraph 12 of the judgment) observed as  

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follows:

“Before proceeding further we consider it necessary to observe  that there has been definite shift in the Court’s approach while  interpreting  the  rent  control  legislations.  An  analysis  of  the  judgments  of  1950s  to  early  1990s  would  indicate  that  in  majority  of  cases  the  courts  heavily  leaned  in  favour  of  an  interpretation which would benefit the tenant- Mohinder Kumar  vs.  State  of  Haryana1,  Prabhakaran  Nair  vs.  State  of  T.N.2,  D.C. Bhatia vs. Union of India3 and  C.N. Rudramurthy vs. K.   Barkathulla  Khan4.  In  these  and  other  cases,  the  Court  consistently held that the paramount object of every rent control  legislation  is  to  provide  safeguards  for  tenants  against  exploitation by landlords who seek to take undue advantage of  the  pressing  need  for  accommodation  of  a  large  number  of  people looking for a house on rent for residence or business in  the background of acute scarcity thereof. However, a different  trend is clearly discernible in the later judgments.”

40. He then referred to some later decisions and (in paragraph 14 of the  

judgment) quoted a passage from the decision in  Joginder Pal vs.  Naval  

Kishore Behal (2002) 5 SCC 397, to the following effect:

“…  The  courts  have  to  adopt  a  reasonable  and  balanced  approach while interpreting rent  control  legislations  starting  with an assumption that an equal treatment has been meted out   to  both  the  sections  of  the  society.  In  spite  of  the  overall   balance tilting in favour of the tenants, while interpreting such   of the provisions as take care of the interest of the landlord the   court should not hesitate in leaning in favour of the landlords.   Such provisions  are  engrafted  in  rent  control  legislations  to   take care of those situations where the landlords too are weak   and feeble and feel humble.”

     (emphasis in original) 1 (1985) 4 SCC 221 2 (1987) 4 SCC 238 3 (1995) 1 SCC 104 4 (1998) 8 SCC 275

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41. Commenting upon the Full Bench decision of the Delhi High Court  

that had upheld the Constitutional validity of section 14(1)(e) of the Delhi  

Rent  Control  Act  and  that  came  under  challenge  in  Satyawati  Sharma,  

Singhvi, J. (in paragraph 29 of the judgment) observed as follows:

“… It is significant to note that the Full Bench did not, at all,  advert to the question whether the reason/cause which supplied  rationale  to  the  classification  continued  to  subsist  even  after  lapse of 44 years and whether the tenants of premises let for  non-residential purposes should continue to avail the benefit of  implicit  exemption  from  eviction  in  the  case  of  bona  fide  requirement  of  the  landlord  despite  see-saw  change  in  the  housing  scenario  in  Delhi  and  substantial  increase  in  the  availability  of buildings and premises which could be let  for  non -residential or commercial purposes.”

42. The decision  in  Satyawati  Sharma then referred to  the  doctrine  of  

temporal reasonableness and in paragraph 32 observed as follows:

“It is trite to say that legislation which may be quite reasonable  and rational at the time of its enactment may with the lapse of  time and/or due to change of circumstances become arbitrary,  unreasonable and violative of the doctrine of equality and even  if the validity of such legislation may have been upheld at a  given point  of  time,  the Court  may,  in  subsequent  litigation,  strike  down  the  same  if  it  is  found  that  the  rationale  of  classification has become non-existent.”

43. We reaffirm the views expressed in Satyawati Sharma and emphasise  

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the  need for  a  more  balanced and objective  approach  to  the  relationship  

between the landlord and tenant. This is not to say that the Court should lean  

in favour of the landlord but merely that there is no longer any room for the  

assumption  that  all  tenants,  as  a  class,  are  in  dire  circumstances  and  in  

desperate need of the Court’s protection under all circumstances. (The case  

of the present appellant who is in occupation of an area of 9000 sq. ft. in a  

building, situate at Fort, Mumbai on a rental of Rs. 5236.58/-, plus water  

charges at the rate of Rs. 515.35/- per month more than amply highlights the  

point)

44. With the perspective thus adjusted all the submissions made by Mr.  

Lalit on behalf of the appellant have a simple answer. The interim order of  

the High Court asking the appellant to deposit Rs.5, 40,000/- from the date  

of  the  decree  as  condition  for  stay  of  the  execution  of  the  decree  of  

ejectment has to be seen as one single package. The appellant may or may  

not accept the order as a whole. But it is not open to it to accept the order in  

so far as it stays the execution of the decree and to question the condition  

attached to it. In an appeal or revision, stay of execution of the decree(s)  

passed by the court(s) below cannot be asked for as of right. While admitting  

the appeal or revision, it is perfectly open to the court, to decline to grant any  

stay or to grant stay subject to some reasonable condition. In case stay is not  

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granted or in case the order of stay remains inoperative for failure to satisfy  

the condition subject to which it is granted, the tenant-in-revision will not  

have the protection of any of the provisions under the Rent Act relied upon  

by Mr. Lalit and in all likelihood would be evicted before the revision is  

finally decided. In the event the revision is allowed later on, the tenant’s  

remedy would be only by way of restitution.

45. In  Atma Ram Properties the Court  viewed the issue exactly  in the  

same way (See paragraphs 6, 8 & 9 of the decision).  Further, the decision  

also answers Mr. Lalit’s submission that the tenancy did not come to end on  

the passing of the decree but would continue until the tenant was actually  

physically evicted from the premises in execution of the decree. In  Atma  

Ram Properties  the  Court  framed two issues arising for  consideration as  

follows:

“This submission raises the following two issues: (i) in respect  of premises enjoying the protection of rent control legislation,  when does the tenancy terminate; and (ii) up to what point of  time is the tenant liable to pay rent at the contractual rate and  when does he become liable to pay compensation for use and  occupation of the tenancy premises unbound by the contractual  rate of rent to the landlord?”

The Court answered the first issue as follows:

“We  are,  therefore,  of  the  opinion  that  the  tenant  having  suffered a decree or order for eviction may continue his fight  before  the  superior  forum  but,  on  the  termination  of  the  proceedings  and  the  decree  or  order  of  eviction  first  passed  

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having been maintained,  the  tenancy would stand terminated  with  effect  from the date  of  the  decree  passed by  the  lower  forum.  In  the  case  of  premises  governed  by  rent  control  legislation, the decree of eviction on being affirmed, would be  determinative  of  the  date  of  termination  of  tenancy  and  the  decree  of  affirmation  passed  by  the  superior  forum  at  any  subsequent  stage  or  date,  would  not,  by  reference  to  the  doctrine of merger have the effect  of  postponing the date of  termination of tenancy.”

The second issue was answered as follows:

“With  effect  from  that  date  (the  passing  of  the  decree  of  eviction),  the  tenant  is  liable  to  pay  mesne  profits or  compensation  for  use  and  occupation  of  the  premises  at  the  same rate at which the landlord would have been able to let out  the premises and earn rent if the tenant would have vacated the  premises. The landlord is not bound by the contractual rate of  rent effective for the period preceding the date of the decree.”

                                                            (words in parenthesis added)

We are in respectful agreement with the decision of the Court in Atma Ram  

Properties.

46. In light of the discussions made above we hold that in an appeal or  

revision preferred by a tenant against a order or decree of an eviction passed  

under the Rent Act it is open to the appellate or the revisional Court to stay  

the execution of the order or the decree on terms, including a direction to  

pay monthly rent at a rate higher than the contractual rent. Needless to say  

that in fixing the amount subject to payment of which the execution of the  

order/ decree is stayed, the Court would exercise restraint and would not fix  

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any excessive, fanciful or punitive amount.

47. In  the  case  in  hand,  the  High  Court  has  fixed  the  amount  of  Rs.  

5,40,000/- per month with reference to the Stamp Duty Ready Reckoner and  

hence, its reasonableness cannot be doubted. In fairness to Mr. Lalit he did  

not challenge the fixation of the amount on that ground.  

48. Before  concluding  the  decision  one  more  question  needs  to  be  

addressed:  what  would  be  the  position  if  the  tenant’s  appeal/revision  is  

allowed and the eviction decree is  set  aside? In that event,  naturally,  the  

status quo ante would be restored and the tenant would be entitled to get  

back all the amounts that he was made to pay in excess of the contractual  

rent. That being the position, the amount fixed by the court over and above  

the contractual monthly rent, ordinarily, should not be directed to be paid to  

the  landlord  during  the  pendency  of  the  appeal/revision.  The  deposited  

amount, along with the accrued interest, should only be paid after the final  

disposal to either side depending upon the result  of the case.  In case for  

some reason the Court finds it just and expedient that the amount fixed by it  

should go to the landlord even while the matter is pending, it must be careful  

to direct payment to the landlord on terms so that in case the final decision  

goes in favour of the tenant the payment should be made to him without any  

undue delay or complications.

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49. In light of the discussions made above, we find the order of the High  

Court just and proper, calling for no interference by this Court. We find no  

merit in the appeal. It is, accordingly, dismissed with costs.  

……………………………………J.    [B.N. AGRAWAL]

……………………………………J.    [G.S. SINGHVI]  

……………………………………J.   [AFTAB ALAM]

New Delhi, August 27, 2009.  

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