# [1975] 3 S.C.R. 709

- **Citation:** [1975] 3 S.C.R. 709
- **Court:** Supreme Court of India
- **Decided:** 1975-02-26
- **Bench:** K. K. Mathew, P. N. Bhagwati, N. L. Untwalia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1975-3-s-c-r-709-6474
- **Pages:** 17

## Headnote

U.P. (Temporary) Control df Rent and Eviction Act, 1947, Sections 3, 7
and 7A and Control of Rem and Eviction Rules, 1949, Rules 3, 4, 5 and 6lntimation of racancy by landlord-Allotment order made afrcr expiry af rflc
ri'quircd period-Allotment order, if i11valid.
Compromise Decree-Compromise void, being w1/awful
a11d
opposed to
public policy-Respo11dent. if committed fraud in ignoring
void
compromise
while l•Pf'fyi11g for eviction of appellant.
The appellant who is the owner of the building bearing No.
24/6, Tulsa
Kathi, Kanpur, lives in the upper floor of the building with his son and other
members of the family.
There are two shops in the ground floor in
which
tenants had been inducted.
One of the shops has been in possession of Raghu.
nath Prasad Mehrotra, respondent no. 3 and his brother Kanahyalal Mehrotra
who have been carrying on the business of Druggists and Chemists in the said
shop as partners of the firm Pioneer Drug Stores. The other shop was in the
teaancy of Bata Shoe Company Ltd. Since the said
Company
had taken
another shop on rent sometime in the year 1961 it was about to vacate the shop
in the building of the appellant. He, therefore,
filed an application on
7 .. J 1-1961 before the Rent Control and Eviction Officer (Rent Controller) with
a copy to the District Magistrate, Kanpur under Rule 6 of the Control of Rent
and Eviction Rules, 1949 framed under Section 17 of the U.P.
(Temporary)
Control of Rent and Eviction Act, 1947 praying for the release of the shop in
his favour on the ground that he requ,ired the ao:ommodation for his own use
for establishing a· business for his son.
On 2-5-1962. respondent No.· 3 made
an application under section 7 ( 2) of the Act for allotment of the accommodation to him. There were four more applicants under section 7(2). The shop
was actually vacated by Bata Shoe Company on 15-8-1962. On 16-8-1962 intimation was given by the apPellant to the Re.nt Controller about the vacancy of
the shop in accordance with section 7(1 ). The Additional District Magistrate,
to whom proceedings had been transferred, made an order on 17-9-1962 refusing to release the shop to the appellant and directed its allotment to respondent
No. 3. In pursuance of the orc!er made in his favour,
the respondent got
actual possession of the shop from the appellant who had occupied the shop fn
the meantime.
Before the filing of the application by the third respondent on 2-11-1962
under section 7A of the Act, the appellant had filed on 22-9-IQ62,
suit
No.
132/ I 962 in the Court of First Civil Judge at Kan,pur challenbing the allotment order of the Additional District
Magistrate and the Rent Controller
i\mpleading the third respondent as the sole defendant in the suit. A decree
for permanent injunction was asked for.
Interim injunction was granted. The
suit ended in compromise on 11-10-1%2. The appellant filed an application
for review on 17-11-1962 before the Rent Controller asking him to review bis
e·{·parte order dated 15-11-1962 made under section 7A of the Act chiefly on
two grounds viz. (!) that no notice was served upon the appellant; (2) that
the third respondent had obtained the order fradulently by suppressing the fact
of compromise entered in Suit No. 13211962. The Rent Controller refused to
review his oruer and disrnissed the application on 8-1-1963. The appellant on
the same date i.e. on 8-1-1963 filed a petition in the Allahabad
High
Court
under Article 226 of the Constitution to challeng~ the various orders of allotment and delivery of possession made by 1 ~spondents I and 2 from time tc
time.
The Writ J>etition was dismissed by a learned single Judge on 7-5-1963.
Special Appeal No. 254/1963 was dismissed by a Bench of the Allahabad High
Court on 3-2-1964.
The present appeal was preferreti in this Court on grant
of certificate by the High Court.
·.110
SUPREME COURT REPORTS
(1975] 3 S.C.R.
It was contended on behalf of the appellanC that
(i) The order of allotment havini not been made within 30 da

## Text

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SRI KRISHNA KHANNA
~.
709'
ADDITIONAL DISTRICT MAGISTRATE, KANPUR AND ORS.
February 26, 1975.
[K. K. MATHEW, P. N. BHAGWATI AND N. L. UNTWALIA, JJ.]
U.P. (Temporary) Control df Rent and Eviction Act, 1947, Sections 3, 7
and 7A and Control of Rem and Eviction Rules, 1949, Rules 3, 4, 5 and 6lntimation of racancy by landlord-Allotment order made afrcr expiry af rflc
ri'quircd period-Allotment order, if i11valid.
Compromise Decree-Compromise void, being w1/awful
a11d
opposed to
public policy-Respo11dent. if committed fraud in ignoring
void
compromise
while l•Pf'fyi11g for eviction of appellant.
The appellant who is the owner of the building bearing No.
24/6, Tulsa
Kathi, Kanpur, lives in the upper floor of the building with his son and other
members of the family.
There are two shops in the ground floor in
which
tenants had been inducted.
One of the shops has been in possession of Raghu.
nath Prasad Mehrotra, respondent no. 3 and his brother Kanahyalal Mehrotra
who have been carrying on the business of Druggists and Chemists in the said
shop as partners of the firm Pioneer Drug Stores. The other shop was in the
teaancy of Bata Shoe Company Ltd. Since the said
Company
had taken
another shop on rent sometime in the year 1961 it was about to vacate the shop
in the building of the appellant. He, therefore,
filed an application on
7 .. J 1-1961 before the Rent Control and Eviction Officer (Rent Controller) with
a copy to the District Magistrate, Kanpur under Rule 6 of the Control of Rent
and Eviction Rules, 1949 framed under Section 17 of the U.P.
(Temporary)
Control of Rent and Eviction Act, 1947 praying for the release of the shop in
his favour on the ground that he requ,ired the ao:ommodation for his own use
for establishing a· business for his son.
On 2-5-1962. respondent No.· 3 made
an application under section 7 ( 2) of the Act for allotment of the accommodation to him. There were four more applicants under section 7(2). The shop
was actually vacated by Bata Shoe Company on 15-8-1962. On 16-8-1962 intimation was given by the apPellant to the Re.nt Controller about the vacancy of
the shop in accordance with section 7(1 ). The Additional District Magistrate,
to whom proceedings had been transferred, made an order on 17-9-1962 refusing to release the shop to the appellant and directed its allotment to respondent
No. 3. In pursuance of the orc!er made in his favour,
the respondent got
actual possession of the shop from the appellant who had occupied the shop fn
the meantime.
Before the filing of the application by the third respondent on 2-11-1962
under section 7A of the Act, the appellant had filed on 22-9-IQ62,
suit
No.
132/ I 962 in the Court of First Civil Judge at Kan,pur challenbing the allotment order of the Additional District
Magistrate and the Rent Controller
i\mpleading the third respondent as the sole defendant in the suit. A decree
for permanent injunction was asked for.
Interim injunction was granted. The
suit ended in compromise on 11-10-1%2. The appellant filed an application
for review on 17-11-1962 before the Rent Controller asking him to review bis
e·{·parte order dated 15-11-1962 made under section 7A of the Act chiefly on
two grounds viz. (!) that no notice was served upon the appellant; (2) that
the third respondent had obtained the order fradulently by suppressing the fact
of compromise entered in Suit No. 13211962. The Rent Controller refused to
review his oruer and disrnissed the application on 8-1-1963. The appellant on
the same date i.e. on 8-1-1963 filed a petition in the Allahabad
High
Court
under Article 226 of the Constitution to challeng~ the various orders of allotment and delivery of possession made by 1 ~spondents I and 2 from time tc
time.
The Writ J>etition was dismissed by a learned single Judge on 7-5-1963.
Special Appeal No. 254/1963 was dismissed by a Bench of the Allahabad High
Court on 3-2-1964.
The present appeal was preferreti in this Court on grant
of certificate by the High Court.
·.110
SUPREME COURT REPORTS
(1975] 3 S.C.R.
It was contended on behalf of the appellanC that
(i) The order of allotment havini not been made within 30 days of
the receipt oi' the intimation sent by the landlord under s1:ction
7 (1) (a) of the Act as required by Rule 3 of the Rules was
llltr11
~ire~ and void;
(ii) Respondent No. 3 had no right to apply for
possession
under
section 7 A of the Act after having entered into a compromise in
Suit No. 132/ 1962;
(iii) that the order of allotment issued by the Rent Controller was bad
as it was mechanically issued on the basis of the order of the Additional District Magistrate and without any application of the miad
by the to rm er.
Dismissini the appeal,
HELD : (By Court)
(i) Section 3 of the Act providing for restrictions on eviction is baS<:d oil
public policy. It is intended to protect the weaker section of the commwlity
in gem:ral by granting equality of bargaining power. [714D; 718E]
Murlidhar Agarwal and A11r. v Slate of Uttar Pradesh and Ors.; A.I.R. 1974
S.C. 1924, relied on
In Jiwa11 Singh v. Rajindra Pra~ad & Anr., Civil Appeal No. 999(N")
of
1971 decided on 18-12-1974, this Court held that if the landlord failed to ducharge his obligation of giving 7 days' notice in accordance with
!ll~tio•
7(1)(a), he !Olli bis right of making a nomination under Rule 4. The District
Magistrate has got to i;riakc the orde~ of allotment within 30 days of the r•eccipt
of the intimation sent by the landlord under 11ection 7 (1 )(a) of the Act H•
has, at the same time, to give notice of bis order of allotmeni to the landlord.
If the landlord receives no notice from the District Magistrate within 30 days,
which as a matt.er of construction under Rule 4 must mean shortly after th•
expiry of 30 days of the receipt by the landlord under section 7(1)(a), of an
order of allotment having been made within that period, he gets a right to
nominate ~ tenant. Ordinarily and generally the District Magistrate shall bav•
to allot the accommodation to the nominee o_f the landlord but for special
reason~ to be recorded in writing, he may depart from the nomination made by
llhe landlord and allot the accommodation to some other person, even to a
person who was an appiicant before him before the expiry of the period Of 30
days and due to one reason or the other no order of allotment could be made
in his favour .within the said period. If, however, the landlord does not mat.
a nomination in accordance with Ruic 4 he cannot challenge the order of allotment subsequently made by the District Magistrate on the expiry of . the 'ieriod
of 30 days only on the ground of its having been made beyond the timr.
[7150-E, F-716B; 718E-719F]
(ii) In the instant caac it is not correct to say that the order of allotment
·made on the 17th September, 1962-two days after the expiry of the period of
30 days was invalid on that account alone. The High Court is also right in its
view that no order of allotment was poMible to be made in this case before
disposal of the landlord's claim under Rule, 6. There is no time limit fixed for
disposal of. such a claim. Of course it should be disposed of u
quicklJ as
possible; preferably within the period of 30 days mentioned in Rule 3. Thaa
being so even, in the light of Rule 6 it is difficult to nullify an order or allot-
. ment made by the District Magistrate metely on the ground of havin1 been
made on the expiry of the period -0f 30 days.
On the facts of this case !lllrely
the order of allotment was not invalid. [716D-E; 719F-720B]
(iii) The order of allotment in this case was made by the Additional Dia·
trict Ma~strate, respondent No. 1. It inay not be quite correct to say th11t it
was purely an administrative order as has been the view of the Hilb
·Court in
the
Special Appeal. But the order was made by him in
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7 I 1
a quasi-judicial manner after hearing the parties concerned and after fully applying his mind. He, being a delegate of the District Magistrate, waa compelftt
to make order of allotment. So was the Rent Controller. But the latter morely
issued the formal order made by the former. It was not a case where die
authority competent to make the order mechanically did it on the directioa or
in pursuance of an order of a differenr authority not competent to pa9' the
order.
[717G-718B; C-D]
(ii) By majority (Mathew and Untwalia, JJ.)
The appellant filed Civil Suit No. 132/1962 against tire third respondent to
challenge the order of allotment made in his favour by respondent Nos. 1 aad
2.
Neither of the said two respondents was impleaded as a defendant in ti.
suit.
But that apart, the agreement entered into between the appellant amid
~spondent No. 3 embodied in the compromise petition dated 11-10-1962 Wfll
void under section 23 of the Contract Act as it was unlawful and against tit•
public policy of the Act under the Rules.
So long as the Act and the llules
continued in force the control of letting vested in the Districl. Magistrale a"'
not in the portie8,
By an agreement of the kind embodied iri the compromi!e
petition the parties could not curtail the wwers of the District Magistrate. n
was unlawful and against the public policy of the law to do so.
RespondeDt
No. 3 committed no fraud in ignoring the void compromise when he applied
for eviction of the appellant under section 7A of the Act and for dcliYerv of
aclulll, physical possession to him.
[717C-FJ
Per Bhagwati, J. (dissentina)
Even if the compromise was unlawful and the consent decree was oa taa\
account void, t'he very fact of the 3rd respondent having submitted to the co•-
sent deem:, declaring the order of allotment to be invalid and recognising the
right of the appellant to occupy the shop for himself vi.r-a-vl.t the 3rd respoa.
dent, was a highly relevant circumstance bearing on the exercise of the discretion of the District Magistrate, and it ought to have been disclosed to the
District Magistrate. It is a well settled proposition of law and this propositioa
should apply equally in the field of administrative law, that when
a. party
approaches a tribunal for discretionary relief, he must not only come
wi1Ja'
clean hands but must also show the utmost good faith and disc!<* all material
facts having a bearing on the exercise of discretion of the authority which are
within bis knowledge. He cannot escape this obligation on the plea that th•
other side can always, if it so chooses, appear and bring the material facts to the
notice of the authority. It is an obligation of confidence which he owes to the
authority and this obligation is impoeed by law in the larger interesta of administration of justice so that justice, whether dispensed by Civil court or by
admini~trative authority, remains pure and unsullied. The non-disclOSUI'I of
the fact of consent decree by the 3rd respondent in the application made by
ltim vitiated the order of the Rent Control and Eviction Ofticer under 111Ction
"!A. [722C-723B; 72•A-EJ
Civ1L APPELLATE JURISDICTION : Civil Appeal 1;0, 38 of 1968.
From the Judgment and Decree dated the 3rd February, 1964
of the Allahabad High Court in Spl. Civil Appeal No. 254 of 1963.
S. T. Desai, S. S. Bhatia, J. P. Goyal and S. M. Jain,
for the
11ppellant .
. f3ishan Narain, B. P. Maheshwari and Surtsh Sethi, for respondent
H
No. 3.
The Judgment
of the
Court
was delivered by Untwalia,
J .
. P. N. Bhagwati, J. gave a dissenting Opinion,
712
sUPREME COURT REPORTS
[1975] 3 s.c.R.
UNTWALIA, J.-There is a building bearing
no.
24/6, Tulsa
Kothi, situated at Mall in the City of Kanpur, The appellant in this
appeal filed by certificate of the Allahabad High Court is the owner
of the said building. He lives in the upper floor of the building with
his son and other members of the family. There are two shops in the
ground floor in which tenants had been inducted. One of the shops has
been coming in possession of Raghunath Prasad Mehrotra, respondent
no. 3 and his brother Kanahyalal Mehrotra who have been carrying
on the business of Druggists and Chemists in the said shop as parilners
of the firm Pioneer Drug Stores. The other shop was in the tenancy
·of Bata Shoe Company Ltd. Since the said Company
had
taken
another shop on rent sometimr in the year 1961 it was about to vacate
the shop in the building of the appellant. He, therefore, filed an applic;;. ~ion on 7-11-1961 before the Rent Control and Eviction OUicer
(fc,r brevity, Rent Controller) with a copy to the District Magistrate,
Kanpur under Rule 6 of the Control of Rent and Eviction Rules, 1949
framed under section 17 of the U.P. (Temporary) Control of Rent
and Ewction Act, 1947-herein'l\fter called respectively the Rules
and the Act praying for the release of the shop· in his favour on the
~ound that he required the accommodation for his own use for establishing a business for his son. On 2-5-1962, respondent no. 3 111adC'
an application under section 7(2) of the Act for allotment' of the accommodation to him. There were four more applicants under sec:tion
7(2). The shop wa,s actually vacated by Bata Shoe Company on
15-8-1962. On 16-8-1962 intimation was given by the appellant to
the Rent Controller about the vacancy of the shop in accordance with
seotion 7(1). It may be stated here that the Additional District Magistrate, respondent no. 1 as also the Rent Controller, respondent no. 2
had been authorised by the District Magistrate of Kanpur to exercise
powers under the Act. On 18-8-1962 Ike Rent (',,ontroller heard the
matters and fixed 27-8-1962 for orders. Due to some reason he felt
difficulty in dedding the 'Jlatter of the release of shop in favour of the
appellant or its allotmelit to any of the five f!pplicants including respondent no. 3. In due course, the District Magistrate transferred the
proceedings to the Additional District: Magistrate, respondent no. 1.
After hearing all the parties concerned he made an order on 17-9-1962
refusing to release the shop to the appellant and directed its allotrnent
to respondent no. 3 Thereupon a formal order of allotment alloting
the shop accommodation to respondent no. 3 was issued by the Re1H
Controller, respondent n·o. 2 on 18-9-1962.
It appears that the appella.nt had in the meantime occupied the
shop when it was vacated by Bata Shoe Company. Respondent no. 3.
l!herefore filed an application under section 7 A of the Act on 2·· 111962, which was allowed by the Rent Controller ·on 15-11-1962. The
order was ex-parte in absence of the appellant as he is said to have
not responded to the notice issued and alle!!ed to have been served
on him uuder sec~ion 7~(1) of the Act. The shop was got vacated
and act.ual possess10n delivered to respondent no. 3 with the help of
the pohce force on 16-11-1962 in accordance with section 7 A(3) of
ilieAd
.
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713
Before the filing of the application by the third respondent on
2-11-1962 under section 7 A of the Act, the appellant had filed on
22-9-1962 Suit No. 13211962 in the Court of First Civil Judge at
Kanpiur challe~ging the allotment order of the Additional District
Magistrate and the Rent Controller implementing the third respondent
as the sole defendant in the suit. A decree for pel'Qlanent injunction
was asked for. Interim injunction was granted. The suit ended in compromise on 11-10-1962. The terms of the compromise will have to be
considered at the appropriate place in this judgment. It may also be
noted here that Kanahyalal Mehrotra,
brother of the third respondent, filed another suit to challenge the compromise decree dated
11-10-1962 claiming that the order of allotment had been made in
favour of the partnership firm and the third respondent had no right
to nullify the said order by the compromise. The suit was decreed
and we were informed at the Bar that an appeal from the decision of
the Trial Court is pending.
The appellant filed
an application for review on 17-11-1962
before the Rent Controller asking him to review his cx-parte order
dated 15-11-1962 made under section 7A of the Act chiefly on two
grounds viz. ( n that no notice was served upon the appellant; (2) that
the third respondent had obtained the order fraudulently by suppressing
the fact of compromise entered in Suit No. 13211962. The Rent Controller refu•ed to review his order and dismissed the application on
8-1-1963. The appellant on the same date i.e. on 8-1-1963 filed
a
petition in the Allahabad High Court under Article 226 of the Constitution to challenge the various orders of aUotment and delivery of p0ssession made by respondents 1 and 2 from time to time. The
Writ Petition was' dismissed by a learned single Judge on 7-5-1963.
Special Appeal No. 25411963 was dismissed by a Bench of the Alla·
habad High Court on 3-2-1964. The present appeal was pre·
ferred in this Court on grant of certificate by the High Court.
The appellant had urged five points before the High Court in the
special appeal. Mr. S. T. Desai appearing for him in this Court pressed only 3 points for our consideration in support of this appeal. They
are : (1) The order of allotment having not been made within 30 days
of the receipt of the intimation sent by the landlord under section 7(1)
(a) of the Act as required by:Rule 3 of the Rules was ultra vires and
void; (2) Respondent no.3 had no right to apply for possession under
section 7 A of the Act after having entered into a compromise in Suit
No. 13211962; (3) thac the order of allotment issued by the Rent
Controller was bad as it was mechanically issued on the basis of the
order of the Additional District Magistrate and without any application of the mind by the former.
Mr. Bishan Narain, learned counsel for resrandent no. 3 submitted that the period
o~ 30 days
mentioned
in
Rule
3 was
directory, or, in any view of the matter in the facts and circumstances
of this case the order of allotment was not bad on that account. He
further submitted that the allotment order was in favour of the partnership firm, respondent no. 3 had applied for the allotment as a partner of the firm and the compromise entered into between the appellant
15-L 470 Sup.CI/75
7'1
SUPREME COURT REPORTS
ll975J 3 s.c.a.
and the said respondent was not bi.nding on the firm. Moreover, it
was illegal, null and void. He further argued that there was no sulJ..
:;tance i'l the third point urged on behalf of the appellant in as much
,ilS the order was. really that of the Additional District Magistrate who
had made it after fully hearing tl-te parties concerned.
The High Court in appeal has expressed the view that the requirement of passing the order of allotment within the period of 30 days
is directory or in any view of the matter on the facts of this ca!;e it
could not be made before disposing of the appellant's application for
. release of the accommodation under Rule 6. In the opinion of the High
Court the compromise was a fraud on the officers empowered to act
. under the Statute and was of no avail to the appellant. The order of
allotment was in fact made by the Additional District Magistrate and
the formality of issuing the order could be done either by him or by
the Rent Cuntroller, as it was an administrative order.
The object of the Act as its Preamble indicates is to provide for
continuance of powers to control the letting and the rent of residential and non-residential accommodation and too prevent the eviction
of tenants therefrom. Section 3 providing for restrictions on eviction
as held by one of us (Mathew, J.) delivering the judgment on behalf of
this Court in the case of Murlidhar Aggarwal Another v. State of Uttar
.Pradesh and others(') is based on Public Policy. It is intended, to
protect the weaker section of the community in gep.eral by granting
equality of bargaining power. The protection is based on public policy.
Similarly, the Scheme of the Act as per the· provisions contained. in;
Section 7 and 7 A and Rules 3 to 6 is to curtail the right and freedom
of the landlord to a large extent in the matter of letting out of accommodation. Section 7 provides for control on letting; sub-section ( 1) of
which casts a duty on the landlord to give notice in writing of the
vacancy of the accommo::lation to the District Magistrate. Under subsection (2) the District Magistrate may "by general or special order
require a landlord t· · ,,,. ·r not to let to any person any accommodation which has fallen vacant or is about to fall vacant.
The provision of sub-se1;tion r'.'1 has to be read in conjunction with the relevant rules. Section 7 A empowers the J:?istrict Magi5trate to take action
against the unauthorised occupants by directing their eviction and in
case of necessity even with force. Proviso to sub-section (1) of Section
7A enjoins upon the· District Magistrate not to pass any order of eviction if he is satisfied that there has been undue delay or it is otherwise inexpedient to do so. In order to appreciate the true purp-ort of
the law contained in Section 7 of the Act it is necessary to read Rtaes
3 to 6 of the Rules in full :
3. "Allotment Order-'-The District Magistrate shall
make an allotment order within thirty days of the receipt of
the intimation sent by the landlord under section 7 (1 )(a) of
the Act and shall give notice thereof to the landlord.
4. Landlord's Right to Let-If the landlord, receives no
notice from the District Magistrate w~thin thirty days of the
(1) A.I.R. 1974 S.C. 1924.
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715
receipt by District Magistrate of the intimation given by
landlord under section 7(l)(a), the landlord may nominate a
tenant and the District Magistrate shall allot the accommodation to hiS nominee unless, for reasons to be recorded in
writing, he forthwith · allots the accommodation to
other·
person.
5. Liability for Rent from the date of allotment-Th,:
allottee shall, unless he intimates in writing to the District
Magistrate his. refusal to accept the accommodation within
seven days of the receipt of the order, be liable for rent from
the date of allotment.
6. Occupation by landlord-When the District Malstrate is satisfied that an accommodation, which has fallen
vacant or is likely to fall vacan is bona fide needed by the
landl-ord for his own personal occupation, the District Magis- ·
trate may permit the landlord to occupy it himself."
Recently in the case of Jiwan Singh v. Rajindra Prasad & Anr.('f,
j11dgment of which was delivered by Mathew, J. on behalf of this very
Bench on 18-12-197 4, it was pointed out that if the landlord failed to
discharge his obligation of giving 7 days' 11otice in accordance with
section 7(1)(a), he lost his right of making .a nomination under Rule
4. It is to be noticed that on the failure of the District Magistrate to
make an ailotment order within the period pmvided in Rule 3 the landlord gets a right to nominate a tenant. The District Magistrate under
Rule 4 has got to allot the accommodation to the nominee of the landlord unless for the reasons to be recorded he allots it to somebody else.
Under certain circumstances therefore the Di~trict Magistrate is empowered to make an order of allotment even after the expiry of the
period of 30 days by ignoring the nomination made by the landlord.
In such a situation and in the context of the Rules it is difficult to
holdl that the period fixed for the making of an allotment order in
Rule 3 is mandatory in the sense of resulting in the nullification of the
order of the District Magistrate if made after the expiry of the period.
Without resorting to the well-known expressions of the requirement
of the law being mandatory or· directory we would rest our view on
the plain readin,g of the language of the Rules. The District Maoistrate .
. as we have said above, has got to make the order of allotment within
30 days of the receipt of the intimation sent bv the landlord urder
section 7(1)(a) of the Act. He has, at the same time, to give notice of
his order of allotment to the landlord. If the landlord receive8 no
notiee from the District Magistrate within 30 days, which as a mutter
of construction under Rule 4 must mean shortly after the expiry of
30 days of the receipt byl the District Magistrate of the intimation
)!iven by the landlord under section 7(1)(a), of an order of allotment
having been made within that period, he gets a right to nominate a
tenant. Ordinarily 1.ttd generally the District Magistrate shall have to
allot the accommodation to the nominee of the landlord 1- 1t for special reasons to be rec;.orded in writing, he. may dep::.:: from the nomination made by the landlord and allot the accommodation to some
(!) Civil Appeal No. 999 (N) of 1971.
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SUPREME COURT REPORTS
[1975] 3 S.C.R.
other person, even to a person who wa.s an applicant before him be- .
fore the expiry of the period of 30 days and due to one reason or the
other no order of allotment could be made in his favour within the
said period. If, however, t!le landlord does not make a nomination in
accordwice with Rule 4 he cannot challenge the order of allotment
subsequently made by the District Magistrate on the expiry of the
period of 30 days only on the ground of its having been made beyond
the time.
It is no doubt true that the liability for rent of the allottee begins
only from the date of allotment under Rule 5 and the landlord suffers
if there is delay in the making of the allotment by the District Magistrate. The landlord may move the legal machinery for
forcing the
District Magistrate to make the allotment. Jt may well be that in some
case the order of allotment made after undue delay will be found to
be bad. In the instant case it is not correct to say that the order of aliotment made on the 17th September, 1962-two days after the expiry
of' the period of 30 days was invalid on that account alone. The High
Court is also right in its view that no order of allotment was possible
to be made in this case before disposal of the landlord's claim under
Rule 6. There is no time limit fixed for disposal such a claim.
Of
course it should be disposed of as quickly as possible, preferably withiti the period of 30 days mentioned in Rule 3. That being so even in
the light of Rule 6 it is difficult tQ nullify an order of allotment made
by the District Magistrate merely on the ground of having been made
·on the expiry of the period of 30 days. On the facts of this case surdy
the order of allotment was not invalid.
The appellant filed Civil Suit No. 13211962 against the third respondent to challenge the order Qf allotment made in his favour by r·espondent nos. l ancl 2. Neither of the said two respondents was impleaded as a defendant in the suit. But that apart, the agreement entered
into between the appellant and respondent no. 3 embodied in the
compromise petition dated 11-10-1962 was void under section 23 of
thie Contract Act as it was unlawful and against the Public Policy o~
the Act under the Rules. The four terms of the compromise are as
onder
(a) "That it is admitted by the defendant that at the
expiry of 30 days from the date of intimation
the
shop in dispute automatically stood released t~ the
plaintiff and the allotment order dated 18th Sevtember, 1962 was not at al! effective vis-a-vis
the
rights of the plaintiff as a landlord to use the said
premises.
(b) That the defandant has no ·objection if the plaintiff
continues to utilize the accommodations for his. own
busirn~ss or a business of his son whether himself or
in partnership with any person and till such time as
the plaintiff and his son utilize the accommodation in
this manner, the defendant will not be entitled to enforce his allotment order against him.
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s. K. KHANNA v. A.D.M. (Untwalia, J.)
717
(c) That the plaintiff has agreed that if at any time he
wants to discontinue the business established by
him in the said shop and wants to let out the shop
to any person, he will do so in favour of the defendant and unless he refuses to take the lease on reasonable terms, the plaintiff will not let out the shop to
any third party.
( d) That the shop is already in possession or the plaintiff
and the defendant will not be entitled to take any
steps till the landlord himself desires to let out the
shop to the defendant."
By clause (a) the parties agreed to the statement of the law which in
our judgment was not sound and correct. It will be hazardous to
permit a landlord and a tenant to agree to such a position of law.
It was not open to respondent no. 3 to permit the appellant to utilize
the accommodation for his own business or business of his son as was
done under clause (b). Nor was it open t'o the appellant to agn:e to
let out the shop, if in future he let it out to anybody, after giving
first preference to the third respondent as was agreed to be done
under clause (c).
So long the Act and the Rules continued in force
the contml of letting vested in the District Magistrate and not in the
parties. By an agreement of the kind emobodied in the compromise
petition the parties could not curtail the powers of the District Magistrate.
It was unlawful and against the public policy of the Jaw· to do
so.
The Public Policy behind the Act and the Rules is to vest lhe
control o~ letting in the District Magistrate for the benefit of the
general public or to be more precise such members thereof who were
in need of accommodation on rent.
In our opinion, therefore, respondent no. 3 committed no fraud in ignoring the void compromise
when he applied for eviction of the appellant under section 7 A of
the Act and for delivery of actual, physical possession to him.
We
do not accept the alternative argument put furward by Mr. Bishen
Narain as correct in respect of the compromise. It was not bad for
the rtason of having been entered into by respondent no. 3 . alone.
After perusing the application for allotment made by
respondent
no. 3, the order of allotment made by respondent no. 1 and the order
made by respondent no. 2 under section 74(3) of the Act, we have
come to the conclusion that the allottee of the accommodation in
question was respondent no. 3 although he may have taken it for the
purpose of extending his business of Chemists and Druggists run in'
partnership with his brother.
The third submission made on behalf of the appellant has no
force and must also be rejected. The order of allotment in this case
was made by the Additional District Magistrate, respondent no. 1.
It may not be quite correct to say that it was purely an administrative
order as has been the view of the High Court in the Special Appeal.
But the order was made by him in a quasi-judicial manner after hearing the parties concerned and after fully applying his
mind.
He,
being a delegate of the District Magistrate, was competent to make
the order of allotment.
So was the Rent Controller. But the latter
718
SUPREME COURT REPORTS
[1975] 3 S.C.R.
merely issued the formal order made by the former. It was not a
c:ase where the authority competent to make the order mei.:hanic:ally
did it on the direction or in pursuance of an order of a different
authority not competent to pass rhe order.
In our judgment, therefore, the order of allotment allotting the accommodation to responde:nt no. 3 was not bad. 'Nor had the order made by the Rent Controller under section 7 A of the Act any infirmity.
In the result the appeal fails and is dismissed..
No orders a:; to
cost.
BHAGWATI, J.-1 have had the advantage of reading the judgment
of brother Untwalia, J. Hi:.; has discussed the three contentions
urged by Mr. S. T. Desai on behalf of the appellant and
rejected
them.
Whilst agreeing with the view taken by him in regard to the
first and the third contentions, I find myself unable to subscribe to
the view taken by him in regard to the .second contention.
I shall
immediately proceed to give my reasons why I take a diITcrent view
as regards the s.econd contention, but before I do so, I would like to
add a few words in reference to the first contention.
The Act with which we are concerned in this appeal is the United
Provinces (Temporary) Control of Rent and Eviction Act,
1947.
The object of this Act, as may be gathered from its preamble, i~. tJ
provide for conl.:inuance of powers to control the letting and the rent
of residential and non-residential accommodation and to prevent the
eviction of tenants irom such accommodation.
Section 7, which is
the material section, enacts various provisions relating to control on
le:tting.
It consists of four sub-sections, but of them only twc are
material.
Sub-s. l(a) requires the landlord to give notice of vaca:ncy
to the Distrkt Magistrate within seven da:ys after the accommodation becomes vacant by his ceasing to occupy it or by the tenant
vacating it or otherwise ceasing to occupy it or by termination of
tenancy or by release from requisition or in any other manner whatsoever. A similar obligation is laid on the tenant vacating the accommodation under sub-s. l(b).
Sub-s. (2) then proceeds to say that
the :District Magistrate may by general or special order require
a
landlord to Jet or not to let to any person any accommodation . which
is or has fallen vacant or is about to fall vacant. It may be noted
that the power conferred on the District Magistrate under sub-section
(2) is absolute in tel'l11s.
The vacant accommodation is placed completely under the control of the District Magistrate and he may require
the landlord to let the accommodation to any person nominated by
him or he may even make .a negative order that the landlord shall
not let the accommodation to a par!icular person.
Morco\·er, this
power may be exercised by the District Magistrate at any time. There
is no provision in the statute requiring the District Magistrate to
exercise this power within a particular time limit.
The question is
whether there is anything in the Rules which imposes any such limitation ODI the District Magistrate ? Rule 3 provides that the Distdct
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719
Magistrate shall make an allotment order within thirty days of the
receipt of the intimafron sent by the landlord under s. 7(1)(aj and
shall give notice thereof to the landlord.
This Rule obviously contemplates that the District Magistrate must make an order requiring
the landlord to let the accommodation to a specified person within
thirty days of the receipt of the intimafron ·of vacancy from the landlord. But does it also carry with it by necessary implication a negative prohibition that if the District Magistrate does not make such an
order within the stipulated time, he shall be precluded from making
such order thereafter.
We do not think so.
The only· consequence
·of the District Magistrate not making an- order of allotment within the
period o~ thirty days is that set out in Rule 4.
It confers. a right on
the landlord to nominate a tenant and where the landlonl makes such
a nomination, the District Magistrate is bound to allot the accommodation to such n'ilminee "unless for reasons to be recorded
in
writing he forthwith allots the
accommodation to other
persons".
It is significant to note that Rule 4 does not provide that if the District
Magistrate fails to make an order cf alh;tment within the period of
. thirty d~ys, the landlord may occupy the accommodation himself.
The only right which enutes to the landlord in', such a case is to
nomiillate a tenant.
This he may do or may not do depending on his
volition.
But he does not get a right to occupy the accommodation
for himself. Moreover, even where the landlord nominates a tenant,
the District Magistrate may, for reasons to be recorded in \vriting.
disregard such nomination and allot the accommodation to another
person notwithstanding the expiJiation of the period of thirty days.
It would, therefore, be seen that the time limit of thirty days is not
intended to operate as a fetter on the right of the District Magistrate
to make an order of allotment in the sense that he cannot thereafter
make such an order.
The only reason why the period 'Of thirty days
is provided is that thereaf1ter the landlord gets a right to nominate a
tenar.t, thou!!h even this right can be displaced by the District Magistrate in a proper case.
But if for some reason, the landlord does not
exercise this right and nominate a tenant, the power of the District
Magistrate to make an order of allotment conferred under s. 7(1)(-a)
i&. not affected.
There is nothing in the Rules which says tlii;t the
landlord shall be entitled to occupy the accommodation himself or
that the District Magistrate shall be precluded from making an order
of allotment ,after the expiration of the period of thirty days. Rule
4 in fact indi.::ates to the contrary.
And so also does Ruic 6. That
rule provides that if the landlord want.s the accommodation bona fide
for his own personal occupation, he must obtain permission of the
District Magistrate to occupy it himself.
This provision also suggests
that the landlord does not become entitled to occupy the accommodation himself on the ·expiration of the period 0£ thirty days, but
he can do so only if the necessary permi$sion is granted by the District Magi~lrate. If is, therefore, clear, on a con;spectus of the provisions contained in s. 7, sub-ss. (1) and (2) Rules 3, 4 and 6, that
even if an order of allotment is not made bv the District Magistrate
within the period of thirty days, the landlord does not become entitled
to occupy the accommodation himself in defeasance of the power of
the District Magistrate to make an order of allotment and the Dist-
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SUPREME COURT REPORTS
[1975] 3 s.c.R.
rict Magistrate can, notwithstanding the expiration ~f the period ~f
thirty days, make an order of allotment under s,. 7.(lJ(a). . The va~1dity of the order of allotment made by the D1stnct Magistrate. m
favour of the third respondent could not, there£ore, be assailed on the
ground that it was made after the expiration of thirty days from the
receipt of intimation of vacancy from the appellant.
I would now turn to examine the third contention on which I
find myself in disagreement with my learned brother Untwaiia, J.
The
facts which bear on this contention are fully set out in the judgment •of
my learned brother Untwalia, J. and I need not reiterate them. It
would be enough for my purpose to state that Civil Suit No. 132 of
1962 was filed by the appellant against the 3rd respondent in
the
Court of the First Civil Judge, Kanpur challenging the validity of the
order of allotment made by the District Magistrate in favour of the
3rd respondent. Immediately on filing the suit, the appellant obtained an injunction restraining the 3rd respondent from taking any steps
to enforce the order of allotment or to interfere with the possession
of the appellant in respect of the shop.
The result was that the 3rd
respondent was prevented from obtaining possession of the shop from
the appellant and he could ll'Ot even move the District Magistrate for
evicting the appellant and handing over possession of the shop to
him.