VISHWANT KUMAR

MADAN LAL SHARMA AND ANR.

MARCH I 8, 2·004

[V.N. KHARE, CJ., S.B. SINHA AND S.H. KAPADIA, JJ.)

Delhi Rent Control Act, 1958 ; Sections 4 & 9-Amending Act 57 of 1988; Section J(c)-Application by tenant before Rent Controller for fixation _{.

C of standard rent-During pendency of the application, Amending Act introduced-Rent Controller dismissing the application being infructuous on ground of subsequent amendment-Tribunal and High Court concurring with the Rent Controller-Correctness of-Held, right of a tenant under the Act is a protective right and not a vested right-Hence after amendment, the right of tenant would cease to exist.

D Appellant-tenant entered into an agreement with respondentlandlord in 1976 for taking on rent a shop on a monthly rent of Rs. 5000.

In 1978, the appellant-tenant filed an application before Rent Controller y for fixation of standard rent to the shop under section 9 of the Delhi Rent E Control Act, 1958 seeking to fix the monthly rent at Rs. 1350 per month instead of Rs. 5000. which was excessive. During the pendency of the application before the Rent Controller, on 1.12. I 988, section 3(c) was inserted by an Amending Act providing that the provisions of the Rent Act would not apply to the premises whose monthly rent exceed Rs. 3500.

The respondent-landlord moved an application before the Rent Controller F seeking dismissal of the standard rent application of the appellant in view of the amended section 3(c). The Rent Controller dismissed the standard rent application holding it to be infructuous in view of the amended section.

Tribunal and High Court dismissed the appeals of the appellant-tenant.

In appeal to this Court, the appellant-tenant contended that section G 4 of the Rent Act conferred a substantive right to the tenant not to pay rent in excess of the standard rent; that the !is commenced on the date of application to the Rent Controller for fixation of standard rent; that the rights of the appellant got crystallized under the Act on making an application; that the Rent Act being a beneficial legislation, the H 254

VISHWANT KUMAR v. M.L. SHARMA 255

Amendment Act, while inserting section 3(c) to the Rent Act, did not intend A to obliterate the rights vested in the appellant on the date of the application; that the appellant cannot be made to suffer on account of court's delay by relying on the doctrine of "Actus curiae neminem gravabit"; and that the right not to pay rent in excess of the standard rent did not depend on its fixation by the Rent Controller and that it was on incident B of tenure and consequently it was not in the nature of protective right.

Dismissing the appeal, the Court

HELD: I. I. There is a difference between a mere right and what is right acquired or accrued. Under section 4 of the Delhi Rent Control Act, C 1958, the tenant is not bound to pay rent in excess of the standard rent whereas under section 9, he has a right to get the standard rent fixed. Such a right is the right to take advantage of an enactment and it is not an accrued right. There is a vast difference between rights of a tenant under the Rent Act and the rights of the landlord. The right of a statutory tenant to pay rent not exceeding standard rent or the right to get standard rent D fixed are protective rights and not vested rights. On the other hand, the landlord has rights recognized under the law of Contract and Transfer of Property Act which are vested rights and which are suspended by the provisions of the Rent Act but the day the Rent Act is withdrawn, the suspended rights of the landlord revive. 1257-G-H; 258-A; C-DI

D.C Bhatia v. Union of India, !199511 SCC 104; Thyssen S1ahlunion GMBH v. Steel Authority 1J( India Ltd, 119991 9 SCC 334 and Parripati Chandrasekhar Rao & Sons v. Alapati Jalaiah, 1199513 SCC 709, referred to.

1.2. The object of the Amending Act, 1988 was to rationalize the Rent Act whereby the protection given to the richer tenant is withdrawn.

The object of the Amendment Act, 1988 is to strike a balance between

the claims of the landlord who get meagre rent particularly in times of inflation and the tenants who equally need protection from arbitrary eviction. In the circumstances, in view of section 3(c) as amended, the G application for fixation of standard rent filed by the tenant on 11.4.1978 has been correctly dismissed as infructuous. 1258-D-fl

A Ambalal Sarabhai Enterprises ltd v. Amrit Lal & Co. and Anr .. 120011 8 sec 397, relied on.

A Atma"Ram Milla! v. lshwar Singh Punia, 119881 4 sec 284 and Mis.

Raval & Co. v. K.G. Ramachandran, 1197411 SCC 424, distinguished.

1.3. Where there is an agreed rent between landlord and tenant either prior or earlier to the Amending Act providing that the provisions of Rent Act will not apply to the premises whose monthly rent exceeded B Rs. 3500, the tenant is estopped from taking a plea that it is not the standard rent. 1260-AJ

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4070 of2002.

c From the Judgment and Order dated 4.5.2001 of the Delhi High Court in S.A.O. No. 4 of 2001.

V.R. Reddy, Pradeep Dewan, Sakya Singha Chaudhuri, Pramod B.

Agarwala, Navin Kumar, Ms. Anupama Dhingra and Ms. Praveena Gautam for the Appellant.

D T.L.V. Iyer. S. Balakrishnan, Subramonium Prasad and S.N. Jha for the Respondents.

The Judgment of the Court was delivered by

KAPADIA, J. The Delhi Rent Control Act, 1958 (hereinafter referred E to for the sake of brevity as "the Rent Act") was amended by Act No.57 of

1988. The said Amending Act came into effect from I .12.1988. Section 3(c) of the Amending Act provided that the provisions of the Rent Act will not apply to premises whose monthly rent exceeded Rs. 3500. The question which arises for determination in this civil appeal is - whether section 3(c) F as amended was applicable to standard rent application, which was pending before the Court on 1.12.1988 when the Amending Act came into forre?

On 7th May, 1976, an agreement was entered into between the appellant

- tenant and the respondent - landlord, under which the appellant took on lease a shop on a monthly rent of Rs. 5000 per month. On 11.4. 1978, the G appellant filed a petition for fixation of standard rent under section 9 of the Rent Act. The contention of the appellant was that the standard rent should be fixed at Rs. 1350 per month and that the rent agreed upon at Rs. 5000 per month was excessive. On 23.3.1987, the respondent filed his written statement.

The case was pending on 1.12.1988 when section 3(c) was inserted by

H Amending Act 57 of 1988. On 27.5.2000, when the case was pending, the

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VISHWANT KUMAR v. M.L. SHARMA [KAPADIA. J.] 257

respondent moved an application tinder section 151 CPC before the Rent A Controller seeking dismissal of standard rent application made by the tenant, in view of amended section 3(c).

By order dated 16.12.2000, the Rent Controller allowed the landlord's application and consequently dismissed the standard rent application made by the tenant as incompetent and not maintainable. Being aggrieved, the appellant herein preferred appeal No.9 of B 200 I before the Tribunal which was dismissed. Aggrieved, the appellant herein preferred second appeal bearing S.A.O. No.4 of 200 I in the High Court which was also dismissed by the impugned judgment dated 4.5.200 I.

Hence, this Civil Appeal.

Mr. Y .R. Reddy, learned senior counsel for the appellant submitted that C section 4 conferred a substantive-Hg.ht on the tenant not to pay rent in excess of the standard rent except to the extent of lawful increase of the standard rent in accordance with the provisions of the Act. Os 11.4.1978, pursuant to the right wnferred under the Rent Act, the appellant filed a stl!Pdard rent application. It was urged that on 11.4.1978 the tenant had a right to apply for fixation of standard rent without limit. It was urged that when the /is D commenced on 11.4.1978, all the rights of the appellant got crystallized.

That the Rent Act was a beneficent legislation and the Amendment Act while !nserting section 3(c) did not intend to obliterate the rights vested in the appellant on the date of his petition for fixation of standard rent.

It was vehemently urged that the appellant can not be made to suffer because of E court's delay. In this connection, learned.counsel for the appellant relied on the doctrine of "Actus curiae neminem gravabit". It was further contended that the right not to pay rent in excess of the standard rent did not depend on its fixation by the Rent Controller, that it was on incident of tenure and consequently it was not in the nature of protective right. In this connection, it was submitted that limited repeal in section 3(c) did not affect any right, F privilege, obligation or liability acquired under any enactment and, therefore, such a right was not intended to be taken away by section 3(c) of the Rent Act.

In support of his arguments, learned counsel relied upon several judgments of this Court.

We do not find merit in the above arguments. There is a difference G between a mere right and what is right acquired or accrued. We have to examine the question herein with reference to sections 4, 6 and 9 of the Act.

It is correct that under section 4 of the.Rent Act, the tenant is not bound to pay rent in excess of the standard rent, whereas under section 9 he has a right to get the standard rent fixed. Such a right is the right to take advantage of H

A an enactment and it is not an accrued right. In the case of C. C. Bhatia v.

Union of India, reported in [ 1995] I SCC I 04, it has been held that right of a statutory tenant to pay standard rent is a right to be governed by the Act and if the legislature repeals the Act or a part of it, the statutory tenant can do nothing about it. It is a mere right and not a vested right. To the same effect is the judgment of this Court in the case of Thyssen Stahlunion GMBH B v. Steel Authority of India ltd., reported in [1999] 9 sec 334, in which it is held that right to be governed by the Act is not a right of an enduring nature. What is unaffected by repeal is a right acquired or accrued under the Act. That till the decree is passed. there is no accrued right. The mere right ..4. existing on date of repeal to take advantage of the repealed provisions is not C a right accrued within section 6( c) of the General Clauses Act. Further, there is a vast difference between rights of a tenant under the Rent Act and the rights of the landlord. The right ofa statutory tenant to pay rent not exceeding standard rent or the right to get standard rent fixed are protective rights and not vested rights. On the other hand, the landlord has rights recognized under the law of Contract and Transfer of Property Act which are vested D rights and which are suspended by the provisions of the Rent Act but the day the Rent Act is withdrawn, the suspended rights of the landlord revive. See: Parripati Chandrasekhar Rao & Sons v. Alapati Jalaiah, [1995] 3 SCC 709. 1 Lastly, as held by this Court in the case of D.C. Bhatia, (supra), the object of the amending Act, 1988 was to rationalize the Rent Act whereby the E protection given to the richer tenant is withdrawn. The object of the Amendment Act. 1988 is to strike a balance between.the claims of the landlord who get meager rent, particularly in times of inflation and the tenants who equally need protection from arbitrary eviction. In the circumstances, we hold that in view of section 3(c) as amended, the application for fixation of

F standard rent filed by the tenant on 11.4.1978 has been correctly dismissed as infructuous. We have gone through the decisions cited by the learned counsel for the appellant. The case of Ambalal Sarabhai Enterprises ltd. v.

Amri1 Lal and Co. and Anr., [2001] 8 SCC 397 was a case involvin!; rights of a landlord under section 14(1)(b) of the said Act.

It was held that a ground ofeviction based on illegal sub-Jetting under section 14( I )(b) of the G Rent Act would not constitute a vested right of landlord, but it would be a right within the meaning of section 6(c) of the General Clauses Act if proceeding for eviction is pending. however, the tenant has no vested right under the Rent Act as the tenant has only a protective right. In the present case. we are concerned with the nature of rights of the tenant under the Rent Act. The ratio of this decision supports our above view.

VISHWANT'KUMAR v. M.L. SHARMA [KAPADIA . .I.] 259

The judgment of this Court in the case of Atma Ram Mittal v. !shwar A Singh l'unia, reported in (1988] 4 SCC 284 has no application to the present case.

In that case, the landlord had instituted the suit, in civil court in Haryana, for possession of the shop rented out to the tenant in 1978, on the ground of arrears of rent. It was filed in the civil court as the premises in question were exempted for l 0-years from the Rent Act. On behalf of the B tenant, it was urged that in view of section 1(3) of the Rent.Act the suit was not maintainable and under section 20 of the Rent Act the jurisdiction of the civil court was barred. However, during the pendency of the litigation, the period of exemption/immunity expired. The question was whether the premises which was not I 0-years old on the date of the suit and which was exempted from the operation of the Rent Act would be governed by it on expiry of ten C years during the pendency of the litigation. The tenant succeeded before the High Court on the ground that the suit was filed during the immunity period and it was barred under section 20 of the Rent Act. Allowing the appeal, this Court held that if the immunity from the Rent Act depended upon the ultimate disposal of the case within ten years, which is in reality an impossibility, the immunity would become illusory. In coming to that conclusion, this Court invoked the doctrine of actus curiae neminem gravabit - an act of the Cou11 shall prejudice no man. In that case, the rights of the landlord under the Rent

Act were suspended for JO-years but on expiry they stood revived. The matter was concerning the rights of the landlord. In the circumstances, the judgment of this Court in the Atma Ram Mittal (supra) has no application to E the facts of the present case.

Similarly, the judgment of this Court in Mis Raval & Co. v. K.G.

Ramachandran, (1974] I SCC 424 has no application to the facts of the present case. In the said case, one of the arguments advanced on behalf of the tenant was that the fixation of fair rent under the Tamil Nadu Rent F Control Act .:ould only be downwards from the contracted rent and the contract rent was not to be increC\sed.

It was held by this Court, by a majority decision, that the Tamil Nadu Rent Control Act was a complete Code in respect of contractual tenancies. as well as statutory tenancies.

That the scheme of the Act was different from the Bombay Rent Act.

On close G reading of the Tamil Nadu Rent Control Act, this Court found that the fair rent was required to be fixed for the building which was something like an incident of tenure regarding the building. This conclusion was based on the scheme of the Tamil Nadu Rent Control Act. Hence, the judgment of this • Court in the case of Mis Raval & Co. (supra) has no application to the facts of this case.

A In any event of the matter where there is an agreed rent between landlord and tenant either prior or earlier to the Amending Act providing that the provisions of Rent Act will not apply to the premises whose monthly rent exceeded Rs. 3500, the tenant is estopped from taking a plea that it is not the standard rent.

B For the aforestated reasons, there is no merit in this civil appeal and accordingly the same is dismissed with no order as to costs.

B.S.

Appeal dismissed.

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