A 290

V. S. RABI AND ANR.

SMT. RAM CHAMBELI

JanuaJy 3, 1984

[E.S. VEN, KATARAMlAH AND R.B, MISRA, JJ.J

Delhi Rent Cotro/ Act, 1958, (Act 59 '°f 1958) Sectio; 2J~W.hile invoking ·

te re1nedial provisions of 'Section 21~ he lau; lllord Shot{!d conie with clean hads a . and not supprdss or falsify facis-Doctriue of suppressioverf will disentit/e hbn to get back possession later iiz such case; of stippression of facts- Duty of the Court- Meaning of collusion-Right to resile, when aval1able.....-Rule of oppression and illegal contract explained. ·

The respondent Smt. Ran1 Chambeli leased out the suit premises to the arpcllantS for a P.eriod o.f three yCars under an orQer dated December 22, 1977 passed bY the Additional Rent Controller in Suit No. M/?98/77 µnder section 21 of the Delhi Rent Contr9I ACt. . bii the expiry of the .said period, when the espondefil filed an application eforc the Rent Controller for possess'ion of the preinises, the appellants filed objections, highlighting how by suppression and falSifying facts the resporident resorted to the proYisions of section 21 of the :Rent.Act, arl'd challenged the need for personal Occupation. : The Additional Rent Cpiltroller, therefore, after hearing both sides revoked the perlnission granted in 1977.

HOwever, the Rent Control Tribunal set aside the o_rdr of the Addi. Rent Controller. and ordered eviction. The High Court in Second Appeal confinned Tribunal's order. Hence "the tenan(s'appeat" by Special' Leave of the Court,

Allo\ving the appeal, the c;:ourt,

Hi5:LD .:

1. On .the factsand ciicumstances of the" case, the landlady is not entitled to invoke th'C ren; edy under section.21 _of the Delhi Rent Control Ac~.

The permission under section 21 of the Act had been obtained by her .on the basis of wrong statement, but for which the permission wollld not have been accorded._ .. These statements which were in the nature of half truths were apparently ma.de

in Order to ffiake good the plea that_ there was only a .temBorary necessity to lease out t\le building for a short period and that thCre wiS a bonafide anticipation that there would be a pressing neCeSsity to reoccupy the pren}ises at '1e end of the period, which wer(;! the two crucial factors governing an order under section 2_1 of the At.

[296 F; E]

S.B. Noronah v •. Prem Kun1ari Khaizna, [19.80] 1 S.C.R. 281; applied.

. . . . . . 2: 1 It is true that the appellants who were the weaker.'of th6two parties did not. question ihe .truth of.the staten1ents made by the rspondentwhen.the . permiSsiOn was granted. But such \collusion, if anY, between the two unequal parties dO'es hot confer any sanctity on the transaction in question; In cases of this 'Ilature it is always oPen to the weaker of the two parties to establish that the.transaction was only a camouflage used to cover-its true nature. [296 H; 297 A]

)-.

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v .. s .. RAHi v. RAM CHAMBELJ (Venkataramiah, J.) 291 .

2:2.

Collusion in1plies the existenCe of two or n1ore parties \vho r;:an deal with each other independently with the object of entering into an arrangement which may seive as a cloak to cover up the real state of affairs. When one party can dominate over the will of the other, it would nOt be a case of Collusion but one of compulsioU; The ilbove view is fully in. cc; insonancc with the spirit behind the

rule of oppression which , is recognised as an exception to the doctrine" that a party cannot recover what he has given to the other P.arty under an illegal contract. The gro.und that the appellants cannot challenge! the permission , i_nitially grar.ted under section 21 of the ct is not, therefore) availa?le in this cse. (297 B-CJ

S1nith v. Ci<ff[1817] 6 & S 160@ 165, quoted with approval.

CIVIL APPELLATE JUR1So1CT10N: Civil Appeal No. 28<lJ of 1982.

From the Judgment and Order dated. the 23rd August, l 982 of the Delhi High Court at New Delhi in S.A.O. No. 277 of 1982'.

B.X. Joseph and N.S. Das Behl for the Appellant.

J.M. Khanna for the Respondent.

The Judgment of the Court was delivered by :

~ V~NKATARAMIAH; J.· This is an appeal by spcial leave against the judgment of the High Cou•t of Delhi atcd Augm.t 23. 1982 in S.A.O. No. 277 of J982tJismissing the appeal filed by the appellants.

The respondent Smt. Ra1~ Chambeli leased out the premises in question to the appellan'ts under an order dated December 22 •

1977 passed by the Additional R.enf Contr.oller in s.uit No. M/798/77 under section< 21 of tl1e Delhi Rent Control Act, I 958 (Act 59 of 1958) (hereinafter referred to as 'the Act'), the rckvant part~ wJ1ich reads thus :

"Statement of Smt. Ram Chambcli w/o SJ1.' G.L. Gandhi.

I' am the owner-landlord of premises No. 637, Double Storey, New. Rajinder Nagar, New Delhi. The entire premises comprising of two rooms, kitchen, bath, ]aterine shown in the plan Exhibit-Al is surplus with me for a limited period of 3. years which I want to let out to the respondent for res'dential purposes fer the said rericd at rupees 425/- p.m. which is mentioned in Mark Il with effect from tl1e date of perm1ss1on.

I have never let out the. portion to anybody earlier to it. My son and my mother were Jiving in the

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SUPRHME COURT REPORTS [J 984] 2 s.c.R •

. said premises. My mother has not been reeling well.· My

son is studying in 9th class. After about three years my. mother will be alright and my son.will grow up and for them

'J. spall require t-be pre111ies after three_ years. _

RO & AC

ARC • Statement of Shri V.S. Rahi, son of Sh: Thakur Gopal Singh, 45 years, teachcr •ind Smt. Santosh Rahi w/o Shri V.S. Rahi, aged 45 years, teacher .resident of 33/52, Prabhat Rold, Karol Bagh, New. Delhi.

We want. tlw premises for three' yqrs for the residential purposes from .the date of pe.rni:iSSion.

We are not in possession of the premises nor were we.tenants In it. ·

'RO & AC

ARC

ORDER . ' This order will dispose of application under Section 21 DRC Act filed by Smt. :Ram Chambel.i pplicant seeking pennissio1i to let out first floor of her premises No.. .637 Double Stof'ey, New Rajinder Nagar, New Delhi; It is stated • that the first floor4tif the said premises comprising of two living rooms, kitchen, bath and late.tine detailed in plan exhibit. A-I is.surplus with her for a lim.ited period. of three years cind she will req\lire it after the said period of three. years. The'- petitioner and respondent have made statement on oath in. this connection. In view of the statement of the 'parties, permission u/s. 21 .of DRC Ac.t is 'granted to Smt. R'.lm Chamlieli, wife of Shri G:L Gandhi applicant

to let out first floor of her p; emises No. 637, Double Storey, New Rajinder Nagar, New'Delhi to Shri V.S. Rahi and Smt. Santosh Rabi respondents fot resi<lei1tial pufposes for the said peri.od of three years with effect from the date. of the order. .. .

J. D: Kapoor, Add. Rent Controller''

On th_e cxpi1y of the period of three years mentioned in the above order the respondent filed an application before the Additional Rent Controller for possession or the premises.' The appell.ants filed objec; tions to the said application stating that. te respondent was coinfor-

' ' . v.s. RAHi v. R.AM CHAMBELI (Venkataramiah, J.) . 293

tably living with her husband and son in .the ground floor . of the

b11ilding; that she was not .in need of the first floor of the bu; lding . . which had been leasedout intheir favour; that the statement that her mother was Jiving with her was not true; tliat her son was studying in the 7th class in 1977 and not in the 9th class as stated by her before ·

the Rent Controller in 1977 and that the Rent c'ontrollet had permitted the lasing out of the building under section 21 of the Act without applying his mind.

H was further pleaded that the application had been .filed with a v"iew to extracting higher r"ent. The appellant.s also stated. that the statement of the respondent that she had not leased .out the building earlier to any body elsewas not.true. After. going through the affidavits filed by the parties in support of their cases the Additional Rent" Controller' held that the respondent .. had obtained the permission under section 21 of .the Act by making . wrong statements and accordingly revoked the said perrnission .. Consequently the appellants coul.d not be evicted unde, r that section.'

Aggrieved by the or.der of the Additional Rent Controller, the respondeii't filed an ap1}eal before the Rent. Contr'o'I. Tripunal. The Tribunal allowed the appeal and directed the eviction of the appellants. The Tribunal observed that when the Conirollcr had been informed by tl1e respond.en ·, right atthe time when the permission was gran'ted under section 21 of the Act that the property was not required by her for a period of three years but wculd"te. needed after that period foi the use of her son and her mother who was unwell at that time, there was no ground to hold that the transaction was not genuine.· Tl; e secnd appeal filed by the. appellants against . the order of the Tribunal was dismissed by the High Court. This

appeal by special .)eave is filed gains! the judgment of the' High

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 Section. 21 of tl)e Act reads . ·

"21.

Where. a lndlord. does not require the whole or any part of any premises for" a particular period, and the landlord, after obtaining the permission of the Controller in the prescribed -. manner, lets the whk of the preinises or part thereof as a residence, for such period as may be .agreed. to in writing between the landlord and the tenant' and the tenant does not; on the expiry of the said period, vacate such :Premises, the~1, not\vithstanding ;:iyq1ing contained in section 14 or in any .other law, the .Controller may,_ on an application made to him in this. behalf by the landlord within. such time as may be prescribed, place the

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SUPREME COURT REPORTS

[1984) 2 S.C.R. .

A landlord in vacant possession of the premises :or part thereof by evicting the tenant and every other person who may be in

ocupation of such premises."

When section 21 of the Act was enacted it was believed that it would encourage landlords .. who would not ordinarily be willing B to lease out a building as a residence for a short time even though - 'they might not. be in need of it durig that pericd, to lease ii..out for such short period because qf the si1mmary remedy provided by that section to recover possession>of the building quickly from. the tenant instead of the usual eviction proceedings which would take c

a Jong tirnc to terminate. . .

lt was not perhaps fully realised at the t'me of the enactment of section 2f .of the Act that many unscrupulous landlords would 'enter into arrangements purportjng tb be 'those .under that .seCt.fon

but in reality were ordinary leases and would utilise the threat of the summary remedy availabie under that section to realise higher rents or for any. other purpose considered to be contrary to the benign purposes sought to be:achievd by the Ace When one such case in • which the genui~1eness of a transaction entered irito under section 21 of the Act came before this Court in S.B. Norimah v. Prem Kumari Khanna, '1' Krishrni Iyer, J. observC'd :

"ft is easy to envisage the terrible blow to .the rent control Jaw if Section 21 were freely permitted to subvert the scheme . of Section 14. Every landlord will insist on a tenant going

•through the formal exercise Qf Section 21, making ideal avermcnts in terms of that Section .. The consequence will be that . both the Civil Procedure Code which prescribes suits for recovery of possession and the Delhi Rent Control Act which prescribe.s grounds for evictiort \vill be eclipsed. by the pervasiye operation of Section 21. , Neither grounds for evictioil nor suits for.cviction WiJJ thereafter be needed, and if the landlord moves the court for a mere warrant t~ place the Jandtdnl, through the court precess. in vacant possession of the premises, he gets it. No court-fee, no decree, no execution petition, no terminalion of tenanc);_ \Vish for possession_ and the co"urt is at. your Command . . Such a horrendous situation will be the negation of the rule of law in this area.

So it is that we deem it necessary to

(I) [1'980] I S.C.R. 281.

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v.s. RAH! v. RAM CHAi.imi, LJ (Venk.alaramiah, J.) 295

. lay down the law as implied inSecti.on 2!'.

When anapplication under Section 21 .is filed by the landlord and/or tennt; the Contro!!er must satisfy himself by .such inquiry as .lie may make abqut the. compulsive 're-.· q11iremei1ts of that provision.' If he makes a mindless order,. the Court, \Vhen challenged. at.· the time of execution, will go into the question aS to whether the twin cOnditiuns for sanction have .really been fulftlkd."

The appeal before us bas to be con'sidered agai1ist the above bac1"ground. . . ' . . . ' .

It is urged by the appellants that the order passed under sedion

21. '0fh_e Ai;; i in this Case-havir, g.hCt:n obt:::ined _en t:he basis.of statements which were wrong, the app!icaticn for eviction should be dis1nissed.

While it is true that the Court should . proced with the initial presumption that the order under section 21 of the. Act was a regular one, the Court should. still examine the maierial plae<d befcre it by the. tena11t i'rrducted und9r that provision in order' to satisfy itself th.at there has riot b~~!) any mi-sus~ of the said proVision by th, e Jarid!Ord taking advantage of the helpless ·$itua1ion in \Vhic~ the tenf}nt 'vas placed. a-t. the ti111c when such order \.v"as obtained.

• _ fn the instdnt case .. it.is See;1 tha~ there weie three wrpng state- . ments .ma.<; teby the esponde:nt \\; hen. She apprcaChed !he AdditioTI31

Rent COnroller scekirig , pern1issinn 11nder secticn 21 cf the Act" to lease out' the property. First, it is. not true thai the 'building had not bceri Jeas<; d out earlier.

Now it is admitted before us that there was. on~ Katria occµJ)ying tl~-e 'buiiditlg a~ a ·.teriant an a. mothly rent, ofRs. 100/- oniy and .he had vacated the same abaut. four 'or live months before the, date on which.the orde~ was ma.de under section . 21 while it is. true that he had been there as• tenant even before the respondent purchased ihe building "in the year l 972 .. After he vacated the building, .it was leased out to the appellants on a . rent ofRS. 425/- per mensem. Secondly, it is admitted that the respondent's mother was not living with her. It is now admitted before us that the wom'an who is more tliitn 75 years old described as the mother of the re.spondenl'in the statement of the respondent recorded by the Additional .

Rent Controlier vvhen pern1issiOn was given u~1d.er secti'cn. 21-- is the si'ster .of the 'respondeni's father although in the course .of the .pro-

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SUPREME COURT REPORTS .

(1984) 2 S.C:R

ceedings before the Additional Rent Controller out of which this appeal arises, she was described as the adoptive mother of the respondent. Itis now stated that she is the foster mother of the respon~ dent ad that she came with. the respondent to the residence of her husband after her marriage. It is stated that she was suffering from cataract in her eyes;. that it was not ripe for being treated in 1977 when the order was passed under section ·21 of the Act and that it was expcted that after the cataract was removed she would need the · - building in the occupaiio11 ofthe appellants which is equal in size . to the ground floor in the occupation of the respondent. Thirdly; the son of the respondent was an . young boy studying in the seventh class in !977 and not in the ninth class. From the foregoing it is obvious that-the respondent had suppressed that thj!re was a tenant iri the building who had vacated only a few months before the date of the .application under section 2fofthe Act; had made false statement about the relationship with her so-called foster mother; had not disolosed the nature of her sickness which was expected to be cured in three years; had stated that her son was studying in the ninth class to make it appear that he ould be sufficiently old at the end of the period of thre~ years and that he would be in need of extra accommodation. These statements which were in the nature of half-trµths were apparently made in order to make good the plea that t.here was only a temporary necessity to lease out the building for a short pericd and that the respondent bona fide anticipated that there. would be a pressing, necessity to reocc.upy the premises at the end of the pcricd which are the two crucial factors governing an order under secticn 21 of the Aci: The reasons given in this case are .quite unconvincing~ 'we arc not satisfied that the respondent honestly believed when she . applied .for permission under. section 21. of t]Je.Act that' she would. be in need of the premises in question at the end of the stipulated period. On a consideration of the material before him, the Additional Rent Controller' was right in holding thaLthe permission under section 21 of the Act had been obtained by the respondent ori the basis of wrong statements but for which the permission would not have been accorded. •

It is, however, urged that the appellants who had colluded with the respondent when po; rmission was granted under section 2i' of the Act should not be now allowed to resile from the stand they had taken then., It is true that the appellants who were the weaker of the two parties did not question the truth of the statements made by the respondent when the permission was granted. But sucl1 collussion, if any; beiween the to unequal parties does not confer any sanctity

• I

v.s. RAHi v. RAM CHAMBELl (Venkataramiah, J.)' ?,97 • • on the transaction in question. In cases of this nature it is always A open to the weaker of the two parties to establish that the transaction was only a camouflage used to cover its true nature. Collusion implies the existence ofo or more parties who can deal with each other independently with the object of entering into an arrangement which . . may serve as a cloak t-0 cover up the" real state of affairs. When

one party can dominate over the will of the other, it would not be

 B a case of collusion but one of compulsion~ The above Vitw' is fully in consonance with the spirit behind the rule of ci]lpression which is . recognised.as.an exception to the doctrine that a party cannot recover . what he has given to 'the. other party under an illegal contract. 'It can never be pred.icated as pari de/icto where one holds the rod and the other bows to it'. (Per Lord Ellenborough in Smith v. Cuff C

(1817) 6 M & S 160 at 165). Cases which call for appropriate relief . to be given to an innocent party where 'one has the power to dictate, the other has no alternative but to submit are not uncommon. Cheshire and Fifoot's Law of Contract (10th Edn.) referes to another type of case belonging to this category. At page 338 of that !realise is the '.' following .passage : D

. "Another type of case where the parties are not regarded as equally delictual is where the contr"act. is n•ndcrcd illegal bya statute, the object of which is to proteci one class of persons from the machinations of another class, as for example where it forbids a 1and1;, rd to take a premium from.a prospec- E live tenant. Here, the duty of observing the law is placed squarely upon the shoulders of t.he landlord, a11d the protected person, the tenant, may recover an illegal premiu111 in an action jor money had and. received, even if the statutf' omits to afford him this remedy either expressly or by implication. In the words of Lord Mansfield :

 F

. Where contracts or transactions are prohib.ited by positive statutes, for the sake of protecting one set of men from another set of men;· the one from their situation and condition being liable to be oppressed and imposed upon by the other; there the parties are not in G pari delicto; and in furtherance of these statutes, person injured after the transaction is finish<d and com, the pleted, may bring his action and defeat the contract." H The ground that the appellants cannot ch, allenge th~ permission

SUPREME COURT REPORTS [1984) 2 s.c.R. • A initially granted under section 21 of the Act is not therefore, available•. in this case:

. .

. . . .. .

The Tribunal and the High Court have approached the present case in a mechanical way ani, I have failed to apply correctly the ratio of the d.ecision in Noronah's ca.1e to the facts before thei11. We are of the view that on the facts and in the .circumstances_ of the case , the respondent is not.entitle<) to invoke the remedy under section 21 of the.

Act to. recover possession of the premies.'.

In the result, the judgments of the High Court .. and of the T-ribunal - are set aside and the application filed b'y th& respondent unde~ section 21 of the Act for recovery f the premises is dismissed.

. The appeal is accordingly allowed with costs .

.. S.R.· , Appml allowed. fl

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