IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA Civil Revision No.240 of 1999. Judgment reserved on: 26.5.2008. Date of decision: 14th July, 2008. Sh.Surinder Kumar Sood ….Petitioner. -Versus- Smt.Sudershan Chadha and others ….Respondents Coram: The Hon’ble Mr.Justice Deepak Gupta, Judge. Whether approved for reporting? Yes For the Petitioner: Mr.Dushyant Dadwal, Advocate. For the Respondents: Mr.Janesh Gupta, Advocate Deepak Gupta, J. The facts necessary for decision of the present case are that the petitioner Surinder Kumar Sood (hereinafter referred to as the landlord) filed a petition for eviction of Shri Thaneshwar Lal Chadha (hereinafter referred to as the tenant) from the premises bearing Municipal No.M-202 in ward No.5, Palampur consisting of two rooms, gallery, kitchen, toilet and veranda on the ground that the agreed monthly rent was Rs.400/- per month and that the tenant had not paid the rent w.e.f. Ist January, 1991 to 30th April, 1993. In para 14 of the application it was alleged that the premises were let out to the tenant on 20.4.1973 but the rent was increased from time to time. The tenant filed reply stating that initially the rent of the premises was only Rs.20/- per month. This rent was later enhanced 2 to Rs.50/- per month and finally to Rs.75/- per month in the year 1986. It was denied that the tenant had ever agreed to pay rent @ Rs.400/- per month. It was submitted that the rent @ Rs.75/- per month had been sent to the landlord but he had refused to accept the same. The landlord filed replication in which it was stated that a rent note had been executed by the tenant in the year 1990 whereby the rent had been fixed at Rs.400/- per month. The tenant sought leave to file additional reply to these applications which was allowed. The tenant denied that any such document had been executed. The landlord in support of his case produced the rent note Ext.A-1. This rent note is effective from 1.1.1991 to 30.11.1991 and the rate of rent reflected therein is Rs.400/- per month. The landlord stepped into the witness box as PW-1 and stated that the tenant had agreed to vacate the premises but thereafter a compromise was arrived at and w.e.f. Ist January, 1991 the tenant agreed to pay the rent @ Rs.400/- per month. AW-1, Sh.Dina Nath is a witness to the rent note. He stated that the rent note was executed and signed by the tenant in his presence and he (Dina Nath) had signed the same as a witness. To the similar effect is the statement of AW-3 Sh.Balwant Singh who is the other witness to the rent note Ext.A-1. Sh.Sunil Kumar Chadha, son and attorney of the tenant appeared as RW-1. The gist of the statement of this witness is that his father has been unwell for the last many years. According to him, the tenant is paralysed and unable to look after himself and therefore the question of his signing the rent note does not arise. He denied that the signatures on the rent note are those of his father. He 3 also stated that the premises in question were rented out to them many years back. Initially the rent was Rs.20/- per month which was later increased to Rs.50/- per month in the year 1981 and finally in the year 1986 the rent was enhanced to Rs.75/- per month. The case of the tenant is that the tenant Thaneshwar Lal Chadha suffers from paralysis and even mentally is unable to look after his own interest and therefore the signatures on the document Ext.A-1 are forged and not his. It was also argued that in the special power of attorney executed by Sh.Thaneshwar Lal Chadha on 4th August, 1993 he has affixed his thumb impression. However, on going through the case file I have found that originally Sh.Thaneshwar Lal Chadha had executed a vakalatnama in favour of his counsel Sh.Onkar Krishan Manikatala on 1.8.1993. This bears the signatures of the tenant Sh.Thaneshwar Lal Chadha. These signatures are similar to the signatures on the rent note Ext.A-1. It is obvious that the tenant signed the vakalatnama filed by his counsel in Court. This clearly proves that the tenant was in a position to sign. The defence of the tenant that he could not sign and that the signatures on the rent note Ext.A-1 are forged is obviously a false plea. Therefore, I proceed to decide the case on the basis that the tenant had signed the rent note Ext.A-1. The learned trial Court came to the conclusion that even if the document Ext.A-1 is believed to have been executed by the tenant, the agreement is contrary to Section 5(2), 7(b) and 17 of the H.P. Urban Rent Control Act and as such the petitioner Landlord is not entitled to rent @ Rs.400/- per month but only @ Rs.75/- per month. 4 The learned Appellate Authority rejected the appeal filed by the landlord on similar grounds. The questions which arise for decision in this case are: 1)Whether the landlord and tenant can mutually agree to enhance the rent? 2)Whether under the provisions of the H.P. Urban Rent Control Act in a case where fair rent has not been fixed, can the landlord seek eviction of the tenant on the ground of non-payment of rent on the basis of the agreed rate of rent? To appreciate the rival contention of the parties it would be appropriate to refer to Sections 4 to 9 of the H.P. Urban Rent Control Act, 1987: “4.(1)The Controller Shall, on application by the tenant or the landlord of a building or rented land, and after holding such enquiry as he may think fit, fix the fair rent for such a building or rented land. (2)The fair rent under sub-section(1) shall be,- (a) in respect of the building, the construction whereof was completed on or before the 25th day of January, 1971 or in respect of land let out before the said date, the rent prevailing in the locality for similar building or rented land let out to a new tenant during the year 1971; and (b)in respect of the building, the construction whereof is completed after the 25th day of January, 1971 or in respect of land let out after the said date, the rent agreed upon between the landlord and the tenant preceding the date of the application, or where no rent has been agreed upon, the rent shall be determined on the basis of the rent prevailing in the locality for similar building or rented land on the date of application. (3)Notwithstanding that the fair rent for building or rented land has been fixed under the East Punjab Urban Rent Restriction Act, 1949 or under the Himachal Pradesh Urban Rent Control Act, 1971, a landlord or tenant of such a building or rented land shall be entitled to get its fair rent fixed under this section. (4)Notwithstanding anything contained in this Act, the Controller may fix the fair rent on the basis of the compromise arrived at between the parties to the proceedings and such rent shall be binding only on the parties and their heirs. 5 (5)The fair rent fixed under this section shall be operative from the date, which the application is filed under this section. 5.(1)Save as provided in sub-section (2), when a fair rent of a building or rented land has been fixed under section 4, no further increase or decrease in such fair rent shall be permissible for a period of five years; Provided that the decrease may be allowed in cases where there is decrease or diminution in the accommodation or amenities provided. (2)Notwithstanding anything contained in any law for the time being in force or in any contract, a landlord shall, in addition to the increase in rent provided in this Act, be entitled to increase the rent of a building or land at the rate of 10% (percent) of the fair rent or the agreed rent, as the case may be, after every five years and such increase shall be,-- (a)In a case where such a building or land has been let out for a period of five years or more immediately preceding the commencement of this Act- (i)first with effect from the date of such commencement; and ii)again with effect from the expiry of the period of every five years from such commencement; and (b)where such a building or land has been let out before such commencement for a period shorter than five years and the maximum period within which such building or land remains let out extends beyond five years from the date of the commencement of such a tenancy- (i)first with effect from the date of expiry of five years from the commencement of such tenancy; (ii)again with effect from date of expiry of the period of every five years from the date on which revision made under clause (i) takes effect. (3)Any dispute between the landlord and the tenant in regard to any increase or decrease in rent under this section shall be decided by the Controller. 6.Save as provided under Section 5, when the fair rent of a building or rented land has been fixed under section 4, no further increase in such fair rent shall be permissible except in cases where some addition, improvement or alteration has been carried out in the building or rented land at the landlord’s expense and if 6 the building or rented land is then in the occupation of a tenant, at his request: Provided that the fair rent as increased under this section shall not exceed the fair rent payable under this Act for a similar building or rented land in the same locality with such addition, improvement or alteration and it shall not be chargeable until such addition, improvement or alteration has been completed. 7.Save as provided in this Act, when the Controller has fixed the rent of a building or rented land under section 4- (a)the landlord shall not claim or receive any premium or other like sum in addition to fair rent or any rent in excess of such fair rent, but the landlord may stipulate for and receive in advance an amount not exceeding one month’s rent; (b)any agreement for the payment of any sum in addition to rent, or of rent in excess of such fair rent, shall be null and void. 8.(1)subject to the provisions of this Act, no landlord shall claim or receive any rent in excess of the fair rent, notwithstanding any agreement to the contrary. (2)No landlord shall, in consideration of the grant, renewal or continuance of a tenancy or sub-tenancy of any building or rented land, claim or receive payment of any premium, pugree, fine, advance or any other like sum in addition to the rent. 9.Where any sum has been paid which sum is by reason of the provisions of this Act not payable, such sum shall, at any time within a period of one year after the date of the payment, or in case of payment made before the commencement of this Act within one year after the appointed day, be recoverable by the tenant by whom it was paid or his legal representative from the landlord who received the payment or his legal representatives, and may, without prejudice to any other method of recovery, be adjusted by such tenant from any rent payable within such one year by him to such landlord. Explanation-In this section, the expression “legal representative” has the same meaning as assigned to it in the Code of Civil Procedure, 1908 and includes also, in case of joint family property, the joint family of which the deceased was a member.” 7 Section 4 of the Act empowers the Rent Controller to fix the fair rent of rented building or land on an application being filed by the tenant or the landlord. This Section lays down the criteria for fixing the fair rent. Sub Section (4) clearly lays down that notwithstanding anything else contained in the Act the Rent Controller may fix the fair rent on the basis of a compromise entered into between the parties. Sub Section (5) clearly provides that the fair rent fixed would be operative only from the date when the application for filing the fair rent is filed. Section 5 provides that in case of a building or rented land fair rent of which has been fixed no further increase shall be permissible except as provided in sub-section (2). Sub Section (5) The Section thus lays down that where fair rent of a building or rented land has been fixed under Section 4 no further increase is permissible unless there are improvements, additions or alterations made in the rented premises. Section 6 also makes similar provision for increase of rent where the landlord at his own expense provides certain additions, improvements or alterations in the rented premises at the request of the tenant. Section 7 provides that in the case of premises, fair rent of which has been fixed, the landlord shall not claim any premium etc. Section 7(b) provides that any agreement for payment of rent in excess of fair rent shall be null and void. Section 8 lays down an embargo against the landlord and prohibits any landlord from claiming any rent in excess of the fair rent even if there be an agreement to the contrary. Sub Section (2) of Section 8 prohibits 8 any landlord from charging any premium, pagri, fine, advance etc. in consideration for the grant, renewal or continuation of tenancy. Section 9 provides that if the tenant has paid any sum which under the provisions of this Act is not payable then the tenant can recover the same or the same can be adjusted by such tenant against the future rent payable by the tenant to the landlord. The learned Appellate Authority has come to the conclusion that in view of the provisions of Sections 5 to 7 of the Act, the landlord is not entitled to claim rent @ Rs.400/- per month and has held that rent note Ext.A-1 is hit by the provisions of Section 7(b) of the Act. In my view this finding is against the law. As pointed out above Section 4(5) clearly lays down that the fair rent shall be operative from the date when the application is filed under Section 4 of the Act. In the present case no application for fixation of fair rent has been filed. Sections 5,6 and 7 clearly deal with those cases where the Controller has fixed the rent of a building or rented land under Section 4. These Sections have no applicability in cases where the fair rent has not been fixed. In Sections 5 to 7 the opening words of the Sections clearly show that the provisions of these Sections apply only in cases where the Controller has fixed the rent of the building or rented land. In this behalf reference may be made to a Division Bench Judge of this Court in Lakshmi Chand Sood vs. Shankar Lal Pal, 1976 ILR (Himachal Series) 284. In that case the tenant had filed a petition for fixation of fair rent on April 13, 1972. Thereafter, on 9 28th September, 1972 the landlord filed a petition for eviction of the tenant. The tenant filed an application praying that the eviction proceedings be stayed until the application for determination of the fair rent is disposed of. The Rent Controller rejected the application and took the view that until fair rent is fixed the petitioner was obliged to pay the contractual rent. The tenant thereafter filed a Revision Petition before this Court and the main contention was that in terms of the provisions of Sections 5 to 9 of the Rent Act the landlord could not claim any amount in excess of the fair rent. The Division Bench held as follows: “On a plain reading of Section 7 it seems clear that it is only when the Controller has fixed the fair rent of a building that the landlord is prohibited from claiming or receiving any rent in excess of the fair rent. That is also apparent from Section 8. Both Sections 7 and 8 lay down a statutory injunction restraining the landlord from claiming or receiving rent in excess of the fair rent. The difference between the two sections lies in this, that while under Section 7 an agreement for the payment of any sum as rent in excess of the fair rent is declared null and void, under Section 8 the injunction operates against the landlord “notwithstanding any agreement to the contrary”. The difference between the two sections indicates at once the prospective nature of the determination of the fair rent. The agreement referred to in Section 7(1) for the payment of rent in excess of the fair rent is an agreement entered into after the fair rent has been determined. For that reason, the agreement is treated as null and void. On the other hand, the agreement referred to in Section 8 is an agreement entered into before the fair rent could be determined, and it is therefore that the statute advisedly uses the words “notwithstanding any agreement to the contrary”. In other words, such an agreement is not permitted to operate in contravention of the statutory injunction provided against the landlord by Section 8. It is an agreement which operates so long as the fair rent is not determined, but once the determination has been made it is the fair rent which governs the tenancy notwithstanding the agreement.” 10 The Court further went on to hold that any contravention of Sections 7 or 8 is punishable with imprisonment and fine under Section 25(2) of the Act. The Court held that this also indicated that Sections 7&8 are reasonably capable of only one construction, that they operate with respect to the future only. It is thus clear that under the provisions of the Rent Act the landlord is entitled to recover the rent at the agreed rate till the fair rent is fixed. The liability to pay fair rent arises prospectively from the date the fair rent is fixed. Till the fair rent is fixed the arrears of rent have to be calculated on the basis of the contract between the parties. In L.C. Sood’s case (supra), the petition for fixation of fair rent had been filed even before the eviction petition was filed, yet a Division Bench of this Court held that the tenant was not entitled to pray for stay of the eviction proceedings and was liable to pay the rent at the contractual rate till the fair rent is fixed. This judgment is squarely applicable to the facts of the present case. Section 4(4) itself provides that the Rent Controller may fix the fair rent on the basis of a compromise entered into between the parties. This itself indicates that even while fixing the fair rent the Court is not bound to follow the procedure laid down in Section 4(2)(a) & (b). The Rent Controller may fix the fair rent even on the basis of an agreement between the parties. This itself legitimizes any mutual agreement entered into between the tenant and the landlord as long as fair rent of the premises has not been fixed under Section 4 of the Act. 11 Sh.Janesh Gupta, learned counsel for the tenant has relied upon the judgment of the Punjab and Haryana High Court reported in Behari Lal Gokleney vs. Ved Parkash and another, 1979 (1) RLR 473. In that case the Court held that the increase of rent from Rs.40/- to Rs.80/- per month was against the provisions of Section 7 of the East Punjab Urban Registration Act. The Court came to the conclusion that the agreement to sell allegedly executed between the landlord and the Krishan Lal was a sham transaction and after expiry of one year the tenant was continuing by virtue of the provisions of the Act and therefore the landlord could not claim any enhancement in rent. This authority has no application to the facts of the present case. Even otherwise, in view of the Division Bench judgment of this Court I cannot take any other view. It would also be pertinent to point out that in fact the Punjab and Haryana High Court in Smt.Sushila Devi vs. Surinder Sahni, 1994(2) S.L.J. 1220 has dealt with a similar matter in great detail and has come to the conclusion that there was no prohibition in the Rent Act debarring the landlord from seeking increase of the rent by mutual agreement in case of rented premises where the fair rent of the premises had not been fixed. It has been urged by Sh.Janesh Gupta that Section 8 of the Act does not use the words “where fair rent has been fixed” in contra distinction to the provisions of Sections 5 to 7 wherein the opening words are that the fair rent has been fixed. No doubt these words have not been used in this Section. However, what this Section prohibits is the landlord claiming any rent in excess of the fair rent. 12 If fair rent has not been determined in terms of Section 4, the section can have no applicability. The language of the section itself suggests that the fair rent has been fixed. Sub Section (2) of Section 8 only prohibits the payment of premium, pagri, fine, advance but does not prohibit the parties mutually agreeing to the enhancement of rent. Keeping in view the law and the authorities cited hereinabove I am of the considered view that in cases where fair rent of the premises has not been fixed there is nothing which prevents the landlord and the tenant from mutually agreeing to either enhance or decrease the rent of the premises. In the present case I have already held that Ext.A-1 was signed by the original tenant Shri Thaneshwar Lal Chadha. He agreed to enhance the rent to Rs.400/. In view of the aforesaid discussion, I am clearly of the view that the tenant is bound by this voluntary act of his. Hence, the landlord was entitled to claim rent @ Rs.400/- per months. Accordingly, the petition is allowed and it is held that the tenant is liable to pay arrears of rent @ Rs.400/- per month w.e.f. Ist January, 1991 till date. The tenant in terms of Section 14(2) of the Act is also held liable to pay interest @ 9% p.a. on such arrears together with costs of the entire litigation which are assessed at Rs.3000/-. The tenant shall deposit the arrears of rent alongwith interest accrued and costs assessed hereinabove, after adjusting the amount, if any, already paid by him within a period of 30 days from the date of this judgment. In case the tenant fails to deposit this 13 amount, the landlord shall be entitled to take possession of the premises. The petition is allowed in the aforesaid terms. July 14, 2008. ( Deepak Gupta ), PV Judge