Hon'ble Mr. Justice Ashok Bhushan
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.1256112562 OF 2017
HARBANS KAUR … APPELLANT(S)
VERSUS
IQBAL SINGH & ANR. … RESPONDENT(S)
J U D G M E N T
ASHOK BHUSHAN, J.
These appeals have been filed by the appellant, the
landlord of the premises in question, challenging the
judgment of the Rajasthan High Court dated 09.10.2014
allowing the writ petition filed by the tenant setting
aside the order of eviction passed by Rent Tribunal as
well as Appellate Rent Tribunal. Division Bench of the
Rajasthan High Court vide its judgment dated 14.12.2015
dismissed the Special Appeal(Writ) of the landlord as
not maintainable.
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2. Brief facts of the case necessary to be noticed for
deciding these appeals are:
The appellant is landlord of Shop No.3 and 4 in
Plot No.362 which was let out to the respondenttenant
in August, 1995 at the rent of Rs.8,500/ per month. A
Rent Deed dated 19.08.1995 was executed between the
parties. Rent deed contained a clause for yearly
increase of rent by 10%. The tenant continued to pay
rent to the landlord as per the agreed rent with 10%
enhancement yearly. In the year 2003 the tenant was
making payment of rent at the rate of Rs.16,564/ per
month. In April, 2003, rent which was paid by the
tenant was Rs. 16,564/, upto July, 2003 the tenant
paid the rent at the rate of Rs.16,564 per month. The
landlord issued notice dated 27.03.2004 stating that
with effect from 01.08.2003 upto 29.02.2004, for a
period of seven months, the tenant has neither paid or
tendered rent, arrears from 01.08.2003 to 29.02.2004
amounting to Rs.1,15,945/ were asked to be deposited
in the bank account of landlord. Notice mentioned that
in the event the tenant does not deposit the amount in
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the account, landlord shall be compelled to carry out
legal proceedings for eviction of the tenant. After the
aforesaid notice dated 27.03.2004 the tenant deposited
an amount of Rs.95,200/ on 26.04.2004 in the bank
account of the landlord. Landlord filed an Application
No.1258 of 2004 under Section 9 of the Rajasthan Rent
Control Act, 2001 (hereinafter referred to as the “Act,
2001”) praying for eviction on the ground of arrears of
rent. The tenant filed reply opposing the abovesaid
application. The tenant took stand in the application
that in accordance with the provisions of Act, 2001,
which has come into effect from 01.04.2003, on
increasing the rent under the provisions of Section 6
in the prescribed rent of Rs.8,500/ @ 7.5% per annum
the rate of rent from 01.04.2003 comes to be
Rs.13,600/ per month. It was stated In the written
statement that tenant has deposited rent upto February,
2004 @ Rs.13,600/ per month i.e. a total of
Rs.95,200/ in the bank account.
3. Rejoinder was filed by the landlord where it was
pleaded that respondenttenant has been paying rent
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from August, 2002 @ Rs.16,564/ per month which rent
was paid till July, 2003. It was claimed that the
respondenttenant is liable to pay rent @ Rs.16,564/
per month. The Rent Tribunal heard the parties and by
its judgment and order dated 22.04.2011 directed for
eviction of the tenant. The Rent Tribunal held that the
case of tenant that rent is payable @ Rs.13,600/ per
month cannot be accepted. The tenant having not
deposited at the rate of Rs.16,564/ per month, has
committed default in paying rent. An appeal was filed
by the tenant before the Rent Appellate Tribunal which
too was dismissed by order dated 15.01.2014. The order
of the Rent Tribunal was upheld. The tenant aggrieved
by the order of the Appellate Tribunal filed Writ
Petition No.6965 of 2014 in the High Court which writ
petition was allowed by the learned Single Judge vide
its judgment and order dated 09.10.2014. Against the
judgment of the learned Single Judge dated 09.10.2014
Special Appeal (Writ) No.2075 of 2014 was filed which
was dismissed by the Division Bench vide its judgment
dated 14.12.2015 holding writ appeal as not
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maintainable. Aggrieved against the judgments of the
High Court landlord has filed these appeals.
4. Learned counsel for the appellants submits that the
High Court committed error in interpreting the
provisions of Sections 4, 6, 7 and 14 of the Act, 2001.
He submits that the rent which was being paid by the
tenant on the enforcement of the Act i.e. w.e.f.
01.04.2003 was Rs.16,564/ per month, the tenant was
liable to pay the rent at the same rate. It is not the
case of the appellants that they are demanding rent
with the hike of 10% after the enforcement of Act,
2001. The tenant, however, is calculating the rent by
revising the rent with effect from year 1995 as per the
provisions of Section 6 of the Act. The tenant's case
that rent payable was Rs.13,600/ per month is
erroneous. By the notice given by the landlord dated
27.03.2004 an amount of Rs.1,15,945/ which was due
from August, 2003 to February, 2004 was demanded at the
rate of Rs.16,564/ per month. The tenant having not
deposited the due amount and having deposited amount of
only Rs.95,200/ on 26.04.2004 has committed default.
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The rent which was being paid on the date of the
commencement of the Act, 2001, shall be treated as
agreed rent between the parties. There is change in the
statutory scheme of Act, 2001 which now entitles
landlord to seek revision of the rent. As per the
provisions of Act, 2001 the tenant has not been given a
right to get revision of the agreed rent under the
statutory scheme.
5. Learned counsel for the respondent refuting the
submission of the learned counsel for the appellants
submits that the High Court has rightly taken the view
that the landlord was not entitled to enhancement of
the rent more than 5% in view of the Act, 2001. The
landlord was not at liberty to claim rent with
enhancement at the rate of 10% per annum. The High
Court had rightly held that permitting the landlord to
demand rent with increase of 10% shall be contrary to
the Section 6 of the Act, 2001. Any agreement cannot be
given effect if it provides the revision of rent above
@ 5%. Learned counsel for the respondents additionally
submitted that in the event the rate of rent as claimed
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by the landlord is accepted the agreed rent, after the
receipt of the notice by the tenant, tenant has
deposited amount of Rs.95,200/, which covered rent
upto December, 2003 and part of rent of January, 2004.
The tenant was not in default for four months, hence he
could not have been evicted under Section 9 of Act,
2001. He submits that unless there is default for
payment of 4 months rent eviction cannot be ordered. He
submits that due to this reason the orders of eviction
were unsustainable and this Court may not interfere
with the judgment of the High Court.
6. We have considered the submissions of the learned
counsel for the parties and perused the records.
7. We need to look into the statutory scheme of Act,
2001 for considering the respective submissions. The
Rent Control Legislation which was in operation prior
to Act, 2001 also need to be noted for appreciating the
changes in law brought by the Act, 2001. The issue in
these appeals pertains to rate of rent and the revision
of rent as prescribed by the Act, 2001, hence, only
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those provisions of both the earlier Act and the
Act,2001 need to be noted. Act, 2001 has repealed the
Rajasthan Premises (Control of Rent and Eviction) Act,
1950. We may first notice the provisions of Act, 2001
which are relevant for the present case. Section 4
provides for rent to be as agreed which is to the
following effect:
“Section 4. Rent to be as agreed. The rent
payable for any premises shall, subject to
other provisions of this Act, be such as may
be agreed upon between the landlord and the
tenant and it shall not include the charges
payable for amenities which may he agreed upon
separately; and shall be payable accordingly.”
8. Chapter II of the Act, 2001 deals with “Revision of
Rent”. Section 6 of the Act (as existing on relevant
day) provides as follows:
“Section 6. Revision of rent in respect of
existing tenancies. (1) Notwithstanding
anything contained in any agreement, where
the premises have been let out before the
commencement of this Act, the rent thereof
shall be liable to be revised according to
the formula indicated below :
(a) where the premises have been let out
prior to 1st January, 1950, it shall be
deemed to have been let out on 1st January,
1950 and the rent payable at that time shall
be liable to be increased at the rate of
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7.5% per annum and the amount of increase of
rent shall be merged in such rent alter ten
years. The amount of rent so arrived at
shall again be liable to be increased at the
rate of 7.5% per annum in similar manner
upto the year of commencement of this Act;
(b) where the premises have been let out on
or after 1st January, 1951, the rent payable
at the time of commencement of the tenancy
shall be liable to he increased at the rate
of 7.5% per annum and the amount of increase
of rent shall be merged in such rent after
ten years. The amount of rent so arrived at
shall again be liable to be increased at the
rate of 7.5% per annum in similar manner
upto the year of commencement of this Act.
(2) Notwithstanding anything contained in
Subsection (1), where the period of ten
years for merger of increase of rent under
Subsection (1), is not completed upto the
year of the commencement of this Act, the
rent at the rate of 7.5% per annum shall be
increased upto the year of the commencement
of this Act and amount of increase of rent
shall be merged in rent.
(3) The rent arrived at according to the
formula given in Subsection (1) and (2)
shall, after completion of each year from
the year of commencement of this Act, again
be liable to be increased and paid at the
rate of 5% per annum and the amount of
increase of rent shall he merged in such
rent after ten years. Such tent shall
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further be liable to he increased at
similar rate and merged in similar manner
till the tenancy subsists.
(4) The rent revised as per formula given
under Subsection (1) or Subsection (2)
shall be payable, after the commencement of
this Act, from the date agreed upon between
the landlord and the tenant or where any
petition is filed in a Rent Tribunal, from
the date of filing of such petition.”
9. Section 7 deals with revision of rent in respect of
new tenancies which is to the following effect:
“Section 7. Revision of rent in respect of new
tenancies. (1)In the absence of any
agreement to the contrary, the rent of the
premises let out alter the commencement of
this Act shall be liable to be increased at
the rate of 5% per annum and the amount of
increase of rent shall be merged in such rent
after ten years. Such rent shall further be
liable to be increased at the similar rate and
merged in similar manner till the tenancy
subsists.
(2) Any agreement for increase of rent in
excess of 5% per annum shall be void to that
extent.”
10. Section 14 provides the procedure for revision of
rent. Section 14 subsection (1) is as follows:
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“Section 14. Procedure for revision of rent.
(1) The landlord may seek revision of rent
under Section 6 or Section 7 by submitting it
petition before the Rent Tribunal accompanied
by affidavits and documents, if any.”
11. Now we notice the relevant provisions as existed in
Act, 1950. Section 5 dealt with the payment as agreed
rent to the following effect:
"Section 5. Rent to be as agreed. The rent
payable for any premises situated within the
areas to which this Act extends for the time
being shall, subject to the other provisions
thereof, be ordinarily such, as may be agreed
upon between the landlord and the tenant.”
12. Section 6 dealt with fixation of standard rent.
Section 6(1) is as follows:
"Section 6. Fixation of standard rent.(1)
Where no rent has been agreed upon or where
for any reason the rent agreed upon is claimed
to be low or excessive, the landlord or the
tenant may institute a suit in the lowest
court or competent jurisdiction for fixation
of standard rent for any premises.
(2)..................”
13. In the Act, 1950, Section 7 provided for fixation
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of provisional rent, which provided that upon the
institution of a suit under Section 6, the Court shall
forthwith make an order fixing in a summary manner a
provisional rent for the premises in question, which
shall be binding on all parties concerned and shall
remain in force till a decree fixing the standard rent
therefor is finally made in such suit.
15. The important differences between the statutory
scheme as contained in Section 6 of Act, 1950 and as
now contained in Act, 2001 are:
(i) Under the old Act the landlord or the
tenant both were entitled to file a suit for
fixation of standard rent, if it is claimed
that rent is either low or excessive. Thus,
landlord could have moved the Court for
enhancement of the rent and equally the tenant
could have instituted a suit in the event the
rent was excessive and the Court after holding
inquiry was to determine the standard rent for
such premises.
(ii) In Section 6 of Act, 2001 the tenant has
not been given any right to apply for revision
of the rent on any ground. The old Act did not
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contain any prohibition regarding the annual
increase of rent whereas Section 6 now
contains the prohibition, restricting annual
increase only by 5% for both the tenancies
which were in existence prior to enforcement
of the Act as well as tenancies which
commenced after the commencement of the Act,
2001.
14. The moot question to be answered is as to whether
the agreed rent which was being paid by the tenant
immediately before the commencement of Act, 2001 i.e.
with effect from 01.04.2003 is liable to be redetermined as per provisions of Section 6 of Act, 2001
by a tenant and tenant can unilaterally revise the rent
under new Section 6. Reverting to the facts of the
present case, it is on the record that tenant was
paying the rent of Rs.16,564/ per month immediately
before the enforcement of the Act and even subsequently
till the month of July, 2003. In the rent agreement
there was mutual agreement between the parties for
annual increase @ 10% and the rent of Rs.16,565/ per
month was arrived at complying @ 10% increase annually
to the tenancy which commenced from 01.08.1995. As per
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tenant the rent which was become payable after the
enforcement of the Act has to be redetermined applying
Section 6 and instead of 10% as agreed between the
parties calculation has to be on the basis of increase
at the rate of 7.5% w.e.f. 01.08.1995 as per provision
of Section 6.
15. A comparison of scheme of Section 6 as it existed
in Act, 1950 and Section 6 as it brought under Act,
2001 makes it clear that although the tenant under the
old Act was entitled to apply for fixation of standard
rent if the rent was excessive whereas under Section 6
of the Act, 2001 tenant has not been given any right to
pray for reduction of the rent. It is true that Section
6(1) begins with the words “Notwithstanding anything
contained in any agreement”. Section 6(1) subclause
(b) provides for “where the premises have been let out
on or after 01.01.1950”, the provision contemplates
that the rent payable at the time of commencement of
the tenancy shall be liable to be increased at the rate
of 7.5% per annum.
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16. Subsection (4) of Section 6 further provides that
rent revised as per formula given under subsection (1)
and subsection (2) shall be payable, after the
commencement of this Act from the date agreed upon
between the landlord and the tenant or where any
revision petition is filed, from date of filing of such
petition.
17. Section 14 of the Act contains procedure for
revision of rent which provides that landlord may seek
revision of rent under Section 6 and 7 by submitting a
petition before the Rent Tribunal accompanied by
affidavits and documents, if any. Section 14 subsection (1) uses the words “landlord may seek
revision”. It is not obligatory for every landlord to
seek revision of rent in accordance with Section 6.
Section 6 contains provision entitling landlord to seek
revision of rent notwithstanding anything contained in
any agreement between landlord and tenant. Section 6
empowers the landlord to obtain revision of rent and to
calculate the rent from date of initiation of tenancy.
But in the event landlord does not choose to invoke the
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machinery of revision of the rent as provided in
Section 6 and Section 14, the agreed rent between the
parties shall not automatically be changed nor the
tenant can unilaterally revise the rent. Section 6 is
also beneficial to the tenant to the extent that any
contrary agreement between the parties to increase the
rent annually more than as provided under Section 6
cannot be enforced by a landlord after the enforcement
of the Act. In the event landlord applies for revision
of the rent, the revision of rent has to be in
accordance with the formula as provided under Section
6(1) and 6(2) of the Act. The statutory scheme does not
indicate that the tenant can unilaterally compute the
rent as per formula under Section 6(1) from the
inception of the tenancy and reduce the amount of rent
which he was paying immediately before the enforcement
of the Act. In the present case, the tenant has come up
with the case in his written statement that he has
recomputed the rent from inception of tenancy and has
arrived at calculation that the rent payable with
effect from the enforcement of Act, 2001 was
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Rs.13,600/ only and relying on the said computation he
deposited an amount of Rs.95,200/ in response to the
notice. The High Court in its judgment has held that
after the enforcement of the Act, 2001 no agreement can
provide for higher revision of rent. The High Court in
its judgment has made following observation:
"Section 6 of the Act starts with nonobstantive clause, thus no agreement to
provide higher or lower rate of revision of
rent would operate after commencement of the
Act of 2001.
The landlord was thus not at liberty to
claim rent with enhancement @ 10% per annum.”
18. Ultimately, the High Court held following:
"The landlord was entitled to the rent as was
payable on the date of commencement of the
Act of 2001 without its revision, in facts
and circumstances of this case. In view of
above, I find that demand of rent based on
the agreement was not proper so as to
consider it to be a case of short remittance
and default in payment of rent thereof. In
the background aforesaid, the findings of the
default in payment of rent, recorded by the
Rent Tribunal so also by Appellate Rent
Tribunal cannot be allowed to stand. The
impugned orders passed by the Rent Tribunal
so also by Appellate Rent Tribunal are thus,
quashed. A case of default in payment of rent
is not made out.”
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19. The observation of the High Court that landlord was
entitled to the rent as was payable on the date of
commencement of the Act, 2001 without its revision is
perfectly correct. The landlord cannot claim revision
of rent as per agreement at the rate of 10% per annum
after the enforcement of the Act. The present is not a
case that the landlord is claiming rent after the
enforcement of the Act by adding 10% increase in the
rent. The landlord's case throughout is that the rent
at the rate of Rs.16,564/ per month was being paid by
the tenant since before the commencement of the Act and
even after the commencement of the Act, till the month
of July, 2003 the tenant paid rent at the rate of
Rs.16,564/ per month.
20. Section 4 of the Act which deals with the agreed
rent provides that rent payable for any premises shall
subject to the provisions of this Act, be such as may
be agreed between the landlord and the tenant. When the
tenant was paying the rent of Rs.16,564/ per month
before the enforcement of the Act as per the rent
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agreement, the said amount was agreed amount which was
being paid before the enforcement of the Act. It is
true that in the agreed amount which was being paid
immediately before the commencement of the Act, the
landlord cannot increase @ 10% of the rent as per
agreement. The increase after the enforcement of the
Act shall be in accordance with Section 6 and in the
event the tenant does not agree for the said increase,
the landlord is free to file application under Section
6 read with Section 14. In view of the foregoing
discussion, we are of the view that the High Court has
not appreciated the true import of Sections 6 and 7 of
the Act, 2001 in observing that the tenant is not in
default.
21. One more submission which has been pressed by the
tenant to relieve the tenant from eviction has to be
considered. Section 9 of the Act provides for eviction
of the tenant which is to the following effect:
“Section 9. Eviction of tenants.
Notwithstanding anything contained in any
other law or contract but subject to other
provisions of this Act, the Rent Tribunal
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shall not order eviction of tenant unless it
is satisfied that,
(a) the tenant has neither paid nor tendered
the amount of rent due from him for four
months :
Provided that the ground under this clause
shall not be available to the landlord if he
has not disclosed to the tenant his hank
account number and name of the bank in the
same Municipal area, in the rent agreement or
by a notice sent to him by registered post,
acknowledgment due :
Provided further that no petition on the
ground under this clause shall he filed unless
the landlord has given it notice to the tenant
by registered post, acknowledgment due,
demanding arrears of rent and the tenant has
not made payment of arrears of rent within a
period of thirty days from the (late of
service of notice.
Explanation. For the purposes of this clause,
the rent shall be deemed to have been tendered
when the same is remitted through money order
to the landlord by properly addressing the
same;or having been deposited with the Rent
Authority;or”
22. Section 9(a) provides that eviction can be ordered
only when the tenant has neither paid nor tendered the
rent due from him for four months. He submits that
admittedly after the receipt of the notice dated
27.03.2004 demanding arrears of rent of Rs.1,15,945/,
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the tenant has paid an amount of Rs.95,200/ which
covered the payment of rent upto December, 2003 and
part of rent of January, 2004. He submits that notice
was issued demanding arrears of rent from August, 2003
to 29.02.2004 and the rent upto December, 2003 having
been deposited there was no default for four month
entitling the landlord to claim eviction.
23. Section 9 second proviso of Act, 2001 contemplates
a notice by landlord demanding arrears of rent and the
tenant has not made payment of rent within 30 days from
the service of the notice. The words “arrears of rent”
mean the arrears as demanded by notice and the ground
for eviction as contemplated under Section 9(a) is “the
tenant has neither paid nor tendered the amount of rent
due from him for four months”. The payment and
tendering of rent thus relates to rent for four months.
The tenant cannot be heard saying that since although
his payment was done complying the arrears of rent as
demanded but since he has made the payment upto
December, 2003 and the part of January, 2004, he should
be relieved from eviction. What Section 9 contemplates
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is payment or tendering the amount of rent due from him
for four months, thus, tendering of payment of rent is
rent due from him for four months. In the event rent
due from him for four months is not paid the ground as
contemplated under Section 9(a) is made out. We in this
context notice a judgment of this Court in Prakash
Mehra vs. K.L.Malhotra, (1989) 3 SCC 74. In the above
case this Court has occasion to consider the provision
of Section 14(1)(a) of Delhi Rent Control Act. The
arrears demanded by the notice were the arrears which
were required to be paid by the tenant. The High Court
has held that Section 14(1)(a) of the Act made out a
ground for eviction only where the tenant had neither
paid nor tendered the whole of the arrears of rent
legally recoverable from him within two months of the
date on which a notice of demand for the arrears of
rent was served on him by the landlord. In the above
case the contention of the landlord was that the rent
which was due after the notice should also be treated
to be as defaulted rent which argument was not
accepted. In paragraph 7 of the judgment following was
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laid down:
“7. It is urged before us by learned Counsel
for the appellant that Section 14(1)(a) of the
Act contemplates the payment or tender of the
whole of the arrears of rent legally
recoverable from the tenant on the date when
the demand notice is sent including the rent
which has accrued after service of the demand
notice. When the notice was sent on 7 May
1976, rent for the months of April and May
1976 lad become due, and as two months was
given for payment of the arrears, it would
include also the rent which had accrued during
the said period of two months. We are not
satisfied that there is substance in the
contention. The arrears of rent envisaged by
Section 14(1)(a) of the Act are the arrears
demanded by the notice for payment of arrears
of rent. The arrears due cannot be extended to
rent which has fallen due after service of the
notice of demand. In this case, the two bank
drafts representing the arrears of rent
covered by the notice of demand had been
tendered within two months of the date of
service of the notice of demand. The High
Court is right in the view taken by it. We are
not satisfied that the construction placed by
B. C. Misra, J. in Jag Ram Nathu Ram v.
Surinder Kumar [S.A.O. No. 52 of 1975 decided
on 28 April, 1976 (Del)] and in S.L Kapur v.
Dr. Mrs. P. D. Lal, [1975 Ren C.J. 322 (Del)]
lays down the correct law on the point. ”
24. This Court in the above case has held that arrears
of rent as envisaged in provision of Section 14(1)(a)
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of the Delhi Rent Control Act are the arrears demanded
by the notice for payment of arrears of rent. In the
present case arrears demanded by the notice i.e.
Rs.16,564/ per month starting from December, 2003 to
February, 2004 totalling Rs.1,15,945/ were required to
be paid by the tenant, the tenant having paid only
Rs.95,200/ as per his calculation of the rent at the
rate of Rs.13,600/ per month has committed default.
According to the learned counsel for the tenant, the
rent paid by the tenant was sufficient to cover the
rent upto December, 2003 and part of January, 2004,
admittedly, the arrears as demanded having not been
paid and we having found that the landlord has demanded
arrears of rent for seven months according to rate of
rent Rs.16,564/ per month which was being paid by the
tenant even before the enforcement of the Act, 2001 and
after the enforcement of the Act, 2001. The landlord
having not added 10% increase in the rent demanded,
there was no breach of Section 6 and the High Court has
committed error in allowing the writ petition of the
tenant.
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25. In view of the foregoing discussions, we allow the
appeals, set aside the judgment and order of the High
Court and restore the order of the Rent Tribunal.
......................J.
( ASHOK BHUSHAN )
......................J.
( K.M. JOSEPH )
New Delhi,
January 29, 2019.
