1 WP-2588.sxw ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.2588 OF 1991 Shri. Ganpat S. Hegade, Since deceased through his L.R. Vivek Ganpat Hegade, Ocupation Trade, Residing at 85-A,Railway Lines, Near R.T.O. Solapur. through his Power of Attorney Holder Shjri.C.G.Hegade. ..Petitioner. Vs Mukund Bhalchandra Umbargikar, Age 35 years, Occuptation- Service, R/o. Joglekar Wada, Station Road, Bhusaval, Dist. Jalgaon. ..Respondent. ---- Mr. Uday Warunjikar, Advocate for the Petitioner. Mr. N.J.Patil for the Respondent. ---- Coram : A.S.OKA, J. Date :13 th October, 2010 ORAL JUDGMENT : Heard the learned counsel appearing for the Petitioner and the learned counsel appearing for the Respondent. By this writ petition under Article 227 of the Constitution of India, the Petitioner who is the original defendant-tenant has challenged the 2 WP-2588.sxw decree of eviction passed by the Trial Court which has been confirmed in appeal. 2 With a view to appreciate the submissions made by the learned counsel appearing for the parties, it will be necessary to make a reference of the facts of the case brief.. The respondent plaintiff purchased the house property in which the suit premises is situated in the year 1978. The house property has been constructed in the year 1970. The suit premises consists of four rooms on the ground floor along with a bathroom and one room covered by cement sheets on the first floor. The case made out in the plaint is that in the earlier suit being R. C. S. No. 859 of 1966, the standard rent in respect of the suit premises was fixed at Rs. 120/-p. m. The allegation in the plaint is that the petitioner- defendant was in arrears of rent from 29th August,1978 i. e. the date on which the plaintiff purchased the larger property. A Notice of demand was issued on 29th August, 1980 by the Advocate for the plaintiff. The notice of demand was returned unserved with an endorsement not found on the given address. It is stated that Notice dated 23rd September, 1980 was duly served on 25th 3 WP-2588.sxw September, 1980 but the defendant failed to pay the amount demanded in the notice. It is, therefore, contended that the defendant has become defaulter. 3 It is alleged in the plaint that the plaintiff was employed in United Western Bank . He was transferred to Indore and from Indore he was transferred to Bhusaval. It is stated that the plaintiff being the member of the joint family was staying with his parents and his brother. His brother got married about four years prior to the institution of the suit. It is stated that though the plaintiff was residing at the place where he was transferred, frequently he was visiting Solapur. He stated that the family of the plaintiff is residing in two rooms in Municipal House No.504 in Solapur. It is contended that as the said two rooms premises was insufficient to meet the requirements of the family, by obtaining loan from his employer, the plaintiff acquired the property in which suit premises is situated. It was contended that as the said premises was consisting of two rooms was insufficient, the possession of the suit premises was required for the members of the family of the plaintiff. It was stated that on the western side of 4 WP-2588.sxw the premises, there is a premises in possession of one Sidarm consisting of hall and a room along with the open space. It was stated that the portion of the said premises is in dilapidated condition and the part of the said premises is in set back area. It was alleged that two rooms taken on rent by the father of the plaintiff were insufficient and in fact, the landlord of the said rooms has demanded the possession of the said premises. 4 The suit was contested by the defendant by filing written statement. It was contended that in the earlier suit filed by the predecessor of the plaintiff, due to pressure put by the predecessor in title of the plaintiff, the defendant accepted the rent of Rs.120/-p. m. as standard rent only with a view to ensure that the possession over the suit premises was protected. It was contended in the written statement that the standard rent fixed by consent is not binding on the defendant. It was contended that within one month from the date of service of the notice dated 23rd September, 1980, an application for fixation of standard rent was filed by the defendant. As far as bonafide need is concerned, the defendant denied the contention raised by the plaintiff and 5 WP-2588.sxw contended that the family of the defendant consists of 35 members. In the written statement, it was contended by way of amendment that the total area of the premises in possession of the tenants Mr. Kulkarni and Mr. Sidramappa was the same as the area of the suit-premises. It was contended that the possession of the respective premises held by Mr. Kulkarni and Mr. Sidramappa has been handed over by the said two tenants to the plaintiff and therefore, the alleged need of the plaintiff was not subsisting. 5 The Trial Court framed the various issues. The Trial Court held that the defendant was a defaulter and the dispute raised as regards the standard rent was not bonafide. On the ground of bonafide requirement, a finding was recorded in favour of the plaintiff. Even on the issue of comparative hardship, the Trial Court recorded the finding in favour of the plaintiff. Trial Court decreed the suit. 6 Along with the suit, the application for fixation of standard rent made by the defendant was also heard and the same was dismissed. Against the decree for possession, the defendant preferred an appeal. He also preferred a revision application 6 WP-2588.sxw against the order passed in the standard rent application. 7 The learned Additional District Judge dismissed both the appeal and the Revision Application. The decree on both the grounds was confirmed. The present writ petition under Article 227 of the Constitution of India has been filed by challenging the decree of eviction passed by the Courts below. 8 The learned counsel appearing for the petitioner-tenant has taken the Court through the pleadings,Notes of evidence and the findings recorded by the Courts below. His first submission is that Section 11-A of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the “said Act”) will have no application inasmuch as the rent fixed by the consent decree in the earlier suit was not on merits after adjudication. He submitted that Section 11-A of the said Act incorporates principle of res judicata and therefore, unless it is shown that the standard rent was fixed after adjudication, the embargo of Section 11-A will have no application. He submitted that the issue of standard rent has not been decided on merits and therefore, the same ought 7 WP-2588.sxw to have been decided by the Courts below. He pointed out that in the year 1972, another application for fixation of standard rent was filed by the defendant in which the interim rent was fixed at Rs.100/- p. m. He, therefore, submitted that the dispute raised by the defendant as regards the standard rent was a bona fide dispute and therefore, case will be governed by Section 12(3)(b) of the said Act. He submitted that compliance has been made by depositing the rent and therefore, decree could not have been passed on the said ground. 9 In support of this submission as regards the interpretation of Section 11-A of the said Act, he placed reliance on the decision of the Apex Court in the case of Devkaran Nenshi Tanna (dead) by LRs.. Vs. Manharlal Nenshi and another ( (1994) 5 SCC 681). He also relied upon a decision of the Apex Court in the case of Pulavarthi Venkata Subba Rao Vs. Valluri Janannadha Rao ( AIR 1967 S.C. 591) in support of the submission that a compromise decree is merely an agreement between the parties on which the seal of the court is affixed and therefore, it will not operate as res judicata. 8 WP-2588.sxw 10 Turning to the findings on bona fide requirement, the learned counsel submitted that the bona fide need is not at all established. He submitted that the premises let out to two tenants Mr. Kulkarni and Mr. Sidaram consisting total of five rooms is also available to the plaintiff and therefore, the entire need of the plaintiff has been satisfied. He submitted that in view of the availability of the said premises, the Courts below could not have passed a decree on the ground of bona fide requirement. He submitted that a member of the family of the plaintiff died in the year 2003 and hence, the requirement of the plaintiff has been considerably reduced. He has tendered across the bar the photographs showing the condition of suit premises and the larger property. He submitted that the said photographs show that the premises of other two tenants are lying vacant which are available to the plaintiff. He submitted that without prejudice to the rights and contentions of the defendant, he was ready and willing to vacate two or three rooms but the possession of the rest of the premises be permitted to be retained considering the large size of 9 WP-2588.sxw the family of the defendant. He submitted that even assuming that the bona fide need has been established, the said need will be satisfied if one or two rooms are given to the plaintiff. He submitted that the finding on the issue of bona fide requirement is perverse. He submitted that even the defendant will be willing to shift to the other portion of the larger property vacated by the other tenants to accommodate the plaintiff. 11 The learned counsel appearing for the plaintiff relied on the decision of this Court in the case of Yeshbai and another Vs.Ganpat Irappa Jangara and another ( AIR 1975 Bombay 75) He submitted that in the present case there was no bonafide dispute regarding the standard rent. He submitted that application for standard rent made by the defendant was not maintainable in view of the decision of this Court in the case of Mohanlal Bapubhai Shah Vs. Anant Ramchandra Rediz (1979 Mh.L.J. 717). He submitted that the original plaintiff has retired from the employment. He urged that no interference is called for. 10 WP-2588.sxw 12 I have considered the submissions. The first issue to be decided is as regards the arrears of rent. It is not in dispute that the notice dated 23rd September, 1980 demanding the arrears from 29.8.1978 was served to the defendant. In Suit No.859 of 1966 filed by the predecessor of the plaintiff, there was a consent decree passed under which the predecessor in title of the plaintiff accepted the defendant as a tenant of the suit premises and it was agreed that a sum of Rs.120/- p. m. would be the standard rent. A copy of the consent decree is placed on record in the suit at Exhibit 43. The said earlier suit was instituted by the predecessor of the present plaintiff against the defendant and one Mr. Anand Chavan. The compromise decree was made on 23rd December, 1971 declaring the standard rent at Rs.120/-p. m. At no point of time the defendant challenged the consent decree. In the written statement filed in January, 1982 in the present suit, it was contended that the rent at Rs.120/- per month was accepted by the defendant under the pressure exerted by the predecessor of the plaintiff. Thus, the only pleading of the defendant is that the rate of standard rent was accepted under pressure. 11 WP-2588.sxw 13 The defendant stepped into the witness box. All that he is stated is that the compromise in the suit was done under pressure. There is no specific allegation of fraud or misrepresentation or coercion made by the defendant. On this aspect, it will be necessary to make a reference of Section 11-A of the said Act. Section 11-A reads thus: “No Court shall upon an application or in any suit proceeding fix the standard rent of any premises under S-11, or entertain any plea that the rent or increases are excessive, if the standard rent or the permitted increases, in respect of the same premises have been duly fixed by a competent Court on the merits of the case, without any fraud or collusion or any error of the facts, and there has been no structural alterations of change in the amenities or in respect of any other factor which are relevant to the fixation of the standard rent, or change in such increases, thereafter in the premises.” 14 Section 11-A provides that if standard rent in respect of the premises has been duly fixed by the Competent Court on merits of the case, no Court shall fix the standard rent of the said premises under Section-11 or entertain any plea that the rent was excessive. One exception carved out is in the case of fraud, collusion or error of the facts. The other category of exception is 12 WP-2588.sxw in the case where there has been a structural alteration or change of amenities in the suit premises after the standard rent is fixed. In the present case, the defendant has not come out with the case of fraud or error of the facts. The case of subsequent alterations or change of amenities is also not set up or proved. 15 It must be stated that Section 11-A was brought on the statute book by Maharashtra Act No.14 of 1963. The issue regarding the maintainability of subsequent application for fixation of standard rent in the context of the earlier consent decree fixing the standard rent was considered by the Division Bench of this Court in the case of Popatlal Ratansey Vs. Kalidas Bhavan (1957 B.L.R. 860). The issue which arose for consideration before the Division Bench was whether a consent decree by which the standard rent is fixed, would operate as res judicata in subsequent application for fixation of standard rent of the suit premises. The Division Bench held that there is a fundamental distinction between an agreement which is embodied in a lease and the one which is embodied in a consent decree. The agreement which is embodied in a lease is purely and simply an 13 WP-2588.sxw agreement as to rent. On the other hand, what is embodied in a consent decree is the decision of the Court as to the standard rent. The Division Bench held that such a decision would prevent the tenant from contending in a subsequent application under Section-11 of the said Act that the standard rent which he has previously agreed was not the fair rent. Again same issue was considered by this Court in the case of Manoharlal Bapulal Shah Vs. Anant Ramchandra Rediz (1979 Mh.L. J. 717). A specific argument was advanced before this Court that in view of the enactment of Section 11-A, a tenant is precluded from making a fresh application for fixation of standard rent only when in the earlier proceeding, the rent was fixed by the Competent Court on merits of the case. The argument in short was that in the earlier proceeding, the standard rent was fixed not after adjudication, but by consent, and therefore, Section 11-A will have no application. Reliance was placed on Objects and reasons of the Maharashtra Act 14 of 1962 by which Section-11-A was brought on the statute book. This Court held that there is nothing in Section 11-A of the Act which will prevent the consent decree or order fixing the 14 WP-2588.sxw standard rent passed in the earlier proceeding between the parties from operating as estoppal between them or those who obtain title from them. This Court held that there is nothing in Section 11-A to indicate that it is a comprehensive provision enumerating all the circumstances under which the Court is precluded or estopped from giving de novo consideration to the question of fixation of standard rent. Relying upon another decision of this Court in the case of Lila Kishanchand Jaisinghani Vs. Odhavji Popatlal Ahya ((1974) 76 Bom.L.R. 523), this Court held that once the standard rent is fixed by the Court, it will operate as an estoppel and will preclude the tenant from re-agitating the same question by making fresh application for fixation of standard rent. 16 Now it will be necessary to consider the findings recorded by the Courts below on this aspect. Before dealing with the findings, it must be noted that though the application for standard rent has been dismissed, there is no challenge by the defendant to the said order and what is challenged in this petition is only to the decree for eviction. The Appellate Court noted that the compromise decree of 1971 was never challenged by the 15 WP-2588.sxw defendant tenant till filing of the written statement in the present suit in the year 1981. It was also noted that there is no case made out of fraud or collusion or error of facts. In fact, the Appellate Court has recorded a finding of fact that in the evidence, the defendant has not uttered even a word about any fraud as regards the earlier decree. Only contention raised is that he signed the consent terms under pressure. What is the nature of pressure is not at all disclosed. In fact, under the said consent decree to which the earlier tenant Mr. Anand Chavan was a party, the predecessor of the plaintiff has accepted the present defendant as the tenant in place of Mr.Chavan. In fact, in the cross examination, the defendant has accepted that previous tenant Mr. Chavan was paying the rent at the rate of Rs.120.00 per month. Thus, there is no allegation of fraud, coercion or mistake of fact made by the defendant. Therefore, the earlier consent decree fixing the standard rent at the rate of Rs.120/-per month will operate as estoppal and it was not open for the defendant to file a fresh application for fixation of standard rent. 16 WP-2588.sxw 17 Now the question to be examined is what is the effect of filing an application for standard rent which was not maintainable. On this aspect, it will be necessary to consider a decision of the Division Bench of this Court in the case of Yeshbai and another Vs.Ganpat Irappa Jangara and another (A.I.R. 1975 Bombay 20). In Paragraph 1 of the decision the Division Bench as framed the Point No.1 which reads thus: “Whether the dispute as contemplated under Section 12 (3)(a) must be a bona fide dispute in order to claim benefit under Section 12(3)(a)?” 18 In Paragraph 48, the Division Bench has held thus :- “Section-11-A precludes a Court from entertaining a plea of standard rent or permitted increases being excessive. If the same are already fixed on merits by the Court except on proof of fraud or collusion or an error of the facts, and there has been no structural alterations or change in the amenities justifying change in circumstances. Now it is difficult to hold that even if a tenant is barred from raising a plea about standard rent or permitted increases under Section11-A, still he can raise a dispute about the standard rent or permitted increases in the written statement and take the case out of the provisions of Section 12(3)(a). If a literal meaning is given to the word “dispute” in Section 12(3) (a), in such a case absurd results would follow for, although he is precluded by the judgment of the Court and barred 17 WP-2588.sxw from raising a plea under Section 11-A, he would be free to merely raise such a plea howsoever dishonest it may be, with a view to get out of the clutches of Section 12 (3) (a). The Court will have to harmonise the provisions of Section 11-A and Section12 (3) (a) by not adopting the ordinary rule of literal or grammatical meaning being given to a word in a statutory provision. The Court will be justified in restricting the meaning of the word “dispute” by holding that the dispute to be raised by the tenant must be one which could be raised by him and not barred by the provisions of Section 11-A .To accept that the word “dispute” in Section 12(3)(a) also includes a dispute barred under Section 11-A is to give protection to dishonest tenants from withholding payment of rent and permitted increases by raising false and frivolous contentions without the risk of being evicted. We see no difficulty in holding that the dispute contemplated by Section12(3) (a)must be a dispute which is capable of being adjudicated by a Court, and not a dispute which cannot be raised on account of the bar under Section 11-A”. (underlines supplied). Ultimately, the Division Bench came to a conclusion that under the scheme of the Section, the legislature intended to use the word “dispute” under Section 12(3)(a) as meaning a bonafide dispute and not any dispute. 19 In the present case, in view of the binding nature of the earlier consent decree, there was no bona fide dispute as regards the standard rent. As held earlier, the application for fixation of 18 WP-2588.sxw standard rent was itself not maintainable. Therefore, Section 12(3) (b) will have no application and this was a case where there was a clear default and that is why both the Courts below have passed the decree on the ground of default under Section 12(3)(a). It was tried to be submitted that before the present standard rent application, another standard rent application was filed in which the interim standard rent amount was fixed at Rs.100/-. Apart from the fact of final order passed in the said application was not produced, even the said application was not maintainable in view of bar of Section 11A and therefore, it is very difficult to find fault with the finding recorded by the Court below on the issue of arrears of rent. The dispute regarding the standard rent was not bonafide. One the date of demand notice, the petitioner was in arrear for a period of more than six months and there was no compliance with the notice. 20 As far as bona fide need is concerned, the father of the plaintiff stepped into the witness box. He deposed that his family consisted of ten members including himself, his wife, two sons, two daughters in law and four grand children. He himself 19 WP-2588.sxw disclosed that the plaintiff has been transferred temporarily to Bhusaval. Thus, what is brought on record that the family of the plaintiff consists of three married couples and four children. It brought on record that the family was in possession of rented house of one Mr. Aurangabadkar consisting of one hall which was converted into two rooms by a partition. He stated that the premises was in dilapidated condition. Thus, what is brought on record is that family of the landlord consisted of ten members who were occupying only two rooms on rental basis. 21 An argument was advanced that other two tenants Mr. Kulkarni and Sidaram have vacated their premises. In the cross examination of the father of the plaintiff, not even a suggestion has been given that vacant possession of the tenements has been handed over by the said two tenants. All that was sought to be suggested was that the premises occupied by Mr. Kulkarni has been vacated and Kulkarni’s son has constructed a bunglow. In fact, in the plaint itself a specific case was made out by the plaintiff that the said premises of Kulkarni was not convenient. There is no material placed on record to show that the plaintiff had in fact 20 WP-2588.sxw obtained the possession of the tenements in possession of the said two tenants. Moreover, in the plaint the plaintiff pointed out