# RAKESH WADHA WAN AND ORS v. MIS. JAGDAMBA INDUSTRIAL CORPORATION AND ORS

- **Citation:** [2002] 3 S.C.R. 468
- **Court:** Supreme Court of India
- **Decided:** 2002-04-26
- **Case number:** Civil Appeal No. 2135 of 1999
- **Bench:** R.C. Lahoti, Brijesh Kumar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/rakesh-wadha-wan-and-ors-v-mis-jagdamba-industrial-corporation-and-ors-18653
- **Pages:** 24

## Headnote

Rent Control and Eviction:
East Punjab Urban Rent Restriction Act, I 949 (E.P. U.R.R. Act): Section
C 13(2)(i) and its proviso.
Eviction on the ground of default in payment of rent-Proof of rate of
rent-Tenants plea that rent recited in lease deed was not acted upon and
hence rent not payable at that rate-Held, Deed of lease and payment of rent
D through Cheque at an agreed rent for a certain period are enough to overrule
the plea of tenants.
'Assessed by Controller' qualifies the entries preceding expression
-1
Controller has to make assessment of not only the cost of application but also
of arrears of rent and interest on such arrears and pass an interim orderE If the amount deposited is short, the Controller may afford opportunity to
tenant to tender the deficit amount within a reasonable time.
Preamble and Section I 3(2)(i) and its proviso-Lacunae in the provision
of the E.P.JJ.R.R. Act-Proving advantageous for unscrupulous litigants and
creating obstacles in its smooth functioning-Object sought to be achieved
F has been frustrated-Need to revamp emphasized
-<tInterpretation of Statutes:
Legislative provision-Ambiguity in-Susceptible to two meanings-:-
Resolving of-An obligation is cast on the Court to interpret it in such a
G manner as to make it workable in conformity with object of the enactment and
in conformity with other similar legislations or by devising the procedure
without altering structure so that substantive law is meaningfully implemented.
Evidence Act, I 872:
H
Sections I 7 and 2 I:
468
--
-
...
--
-
RAKESH WADHAWAN v.IAGDAMBA INDUSTRIAL CORPN.
469
Admission-Evidential value-Admission is a piece of evidence which A
does not conclusively bind a party unless it amounts to estoppel-Mere failure
to object a wrong averment as to rate where it was not a point in issue,
inference that rate of rent other than the rent agreed upon cannot be drawnE.P. U.R.R. Act.
Respondent-tenants were in possession of suit premises under an B
agreement from the then owners/landlords at a monthly rent of Rs. 2,000 p.m.
excluding water and electricity charges. Tenants defaulted in payment of rent .
Hence eviction petition was filed by the landlord. In the meanwhile, there was
litigation between the family members oflandlords in the Civil Court Tenants
had deposited before the Rent Controller arrears of rent@ Rs. 1,800 p.m. in C
terms of interim order passed by the Civil Court Tenants, in the written
statement, submitted that agreed rent@ Rs. 2,000 p.m. was never acted upon
and real monthly rent was Rs. 1,800 p.m. only. The rent Controller held that
the amount tendered by the tenants towards arrears of rent was short and
thus invalid. Accordingly, he passed eviction order. Aggrieved, tenants
preferred an appeal before the Appellate Authority. The Appellate Authority D
reversed the findings of the Rent Controller holding the rent to be Rs. 1,800
p.m. at which rate arrears of rent had already been cleared by the tenants,
and the tenants were not liable to be evicted. Landlord preferred Civil Revision
Petition which was dismissed by the High Court. Hence this appeal.
Allowing the appea~ the Court
E
HELD: I.I. No reason has been assigned to show as to why the parties
would have arrived at an agreed rate of rent of Rs. 2,000 p.m. and yet chosen
not to act upon it The subsequent conduct of the parties belies the plea taken
by the tenants that rate of rent so appointed was not intended to be acted
upon. [475-H; 476-A]
F
1.2. The written statement filed in the civil suit by the landlord-plaintiff
did not contain any admission as to the amount of rent as such; there was a
mere failure to object In that suit, rent payable by the tenants was not a
subject matter of controversy but it was a side issue. Admission is only a piece G
of evidence and can be explained; it does not conclusively bind a party unless
it amounts to an estoppel. Value of an admission has to be determined by
keeping in view the circumstances in which it was made and to whom.

## Text

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A
RAKESH WADHA WAN AND ORS.
v.
MIS. JAGDAMBA INDUSTRIAL CORPORATION AND ORS.
APRIL 26, 2002
B
[R.C. LAHOTI AND BRIJESH KUMAR, JJ.]
Rent Control and Eviction:
East Punjab Urban Rent Restriction Act, I 949 (E.P. U.R.R. Act): Section
C 13(2)(i) and its proviso.
Eviction on the ground of default in payment of rent-Proof of rate of
rent-Tenants plea that rent recited in lease deed was not acted upon and
hence rent not payable at that rate-Held, Deed of lease and payment of rent
D through Cheque at an agreed rent for a certain period are enough to overrule
the plea of tenants.
'Assessed by Controller' qualifies the entries preceding expression
-1
Controller has to make assessment of not only the cost of application but also
of arrears of rent and interest on such arrears and pass an interim orderE If the amount deposited is short, the Controller may afford opportunity to
tenant to tender the deficit amount within a reasonable time.
Preamble and Section I 3(2)(i) and its proviso-Lacunae in the provision
of the E.P.JJ.R.R. Act-Proving advantageous for unscrupulous litigants and
creating obstacles in its smooth functioning-Object sought to be achieved
F has been frustrated-Need to revamp emphasized
-<tInterpretation of Statutes:
Legislative provision-Ambiguity in-Susceptible to two meanings-:-
Resolving of-An obligation is cast on the Court to interpret it in such a
G manner as to make it workable in conformity with object of the enactment and
in conformity with other similar legislations or by devising the procedure
without altering structure so that substantive law is meaningfully implemented.
Evidence Act, I 872:
H
Sections I 7 and 2 I:
468
--
-
...
--
-
RAKESH WADHAWAN v.IAGDAMBA INDUSTRIAL CORPN.
469
Admission-Evidential value-Admission is a piece of evidence which A
does not conclusively bind a party unless it amounts to estoppel-Mere failure
to object a wrong averment as to rate where it was not a point in issue,
inference that rate of rent other than the rent agreed upon cannot be drawnE.P. U.R.R. Act.
Respondent-tenants were in possession of suit premises under an B
agreement from the then owners/landlords at a monthly rent of Rs. 2,000 p.m.
excluding water and electricity charges. Tenants defaulted in payment of rent .
Hence eviction petition was filed by the landlord. In the meanwhile, there was
litigation between the family members oflandlords in the Civil Court Tenants
had deposited before the Rent Controller arrears of rent@ Rs. 1,800 p.m. in C
terms of interim order passed by the Civil Court Tenants, in the written
statement, submitted that agreed rent@ Rs. 2,000 p.m. was never acted upon
and real monthly rent was Rs. 1,800 p.m. only. The rent Controller held that
the amount tendered by the tenants towards arrears of rent was short and
thus invalid. Accordingly, he passed eviction order. Aggrieved, tenants
preferred an appeal before the Appellate Authority. The Appellate Authority D
reversed the findings of the Rent Controller holding the rent to be Rs. 1,800
p.m. at which rate arrears of rent had already been cleared by the tenants,
and the tenants were not liable to be evicted. Landlord preferred Civil Revision
Petition which was dismissed by the High Court. Hence this appeal.
Allowing the appea~ the Court
E
HELD: I.I. No reason has been assigned to show as to why the parties
would have arrived at an agreed rate of rent of Rs. 2,000 p.m. and yet chosen
not to act upon it The subsequent conduct of the parties belies the plea taken
by the tenants that rate of rent so appointed was not intended to be acted
upon. [475-H; 476-A]
F
1.2. The written statement filed in the civil suit by the landlord-plaintiff
did not contain any admission as to the amount of rent as such; there was a
mere failure to object In that suit, rent payable by the tenants was not a
subject matter of controversy but it was a side issue. Admission is only a piece G
of evidence and can be explained; it does not conclusively bind a party unless
it amounts to an estoppel. Value of an admission has to be determined by
keeping in view the circumstances in which it was made and to whom. A mere
failure to object (about a wrong averment) cannot be placed on a footing
higher than an admission. Admission as to rate of rent contained in the rent
note and as evidenced by payment of rent at that rate by cheques by the H
A
B
c
D
E
F
470
SUPREME COURT REPORTS
[2002) 3 S.C.R.
tenant outweighs the landlord's mere failure to object about a wrong averment
as to rate of rent in a case where it was not a point in issue and that too in a
litigation not inter-parties and no inference other than the rate of rent being
Rs. 2,00~~per month (and not Rs. 800 per month) could have been drawn. To
that extent the finding arrived at by the Appellate Authority suffers from
perversity and was liable to be set aside by the High Court in exercise of its
revisional jurisdiction. [476-F, G, H; 477-A]
2.1. The enactirent of 1949 Act was preceded by the Punjab Urban Rent
Restriction Act, 1941 which was intended to restrict unreasonable hike in rent
because of shortage of accommodation felt on account of housing properties
being requisitioned by the Government to provide accommodation to the
families of civil and army officers engaged in war. Statement of Objects and
Reasons of the Act stated, interalia, that need was felt to re-enact as a
permanent measure, a legislation for restricting the increase of rents of certain
premises situated within the limits of urban areas and the protection of
tenants against malafide tempts by their landlords to procure their eviction.
The legislation needs a new look and revamping at the hands of the legislature
as there are several lacunae in the provisions of the Act creating bottlenecks
in their smooth functioning highlighted in several judicial pronouncements
and such deficiencies are proving paradise for unscrupulous litigants and also
to some extent frustrating the very purpose sought to be achieved by the
legislation. It is high time the State of Punjab should have a fresh look at
Section 13 and other relevant provisions of the Act, learning lessons from the
manner in which these provisions have so far worked and by reviewing the
extent by which the object which the legislation sought to achieve has been
achieved or frustrated. Phraseology employed in drafting Section 13(2)(i) with
its proviso and the manner in which it has been so far interpreted, are far
from serving the object of enactment, rather defeating it
(477-F, H; 478-A, C; 479-D-E]
Nagindas Ramdas v. Dalpatram Jccharam Brijram and Ors., (1974) l SCC
242 and Attar Singh v. Jnder Kumar, AIR (1967) SC 773, referred to.
G
"Rent matters on Trial" (1998) by Prof D.N. Jauhar, Department of Law,
Punjab University, referred to.
2.2. It can be presumed that by engrafting Section 13(2)(i) and proviso
in the body of the Act the Legislature intended to confer on the tenants a
protection, larger and more beneficial than what it would have been if the
H provision was not enacted. (485-A]
(
-4.
-
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-
...
J-
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•
RAKESH WAD HA WAN v.JAGDAMBA INDUSTRIAL CORPN.
471
2.3. There are reciprocal obligations created by the proviso to Section A
13(2)(i). It ensures recovery of rent to the landlord and saves him from the
recalcitrant tenant by building pressure on tenant to make payment under
pain of eviction. At the same time it protects the tenants from the unscrupulous
devices of landlords. [481-C; 486-A]
2.4. Even if Section 13(2)(i) and the proviso would not have been enacted, B
there was Section 114 of the Transfer of Property Act to take care of such
situation. The provision in the Rent Control Legislation which obliges the
tenant to pay or tender the arrears of rent during the course of hearing and
relieve the tenant from the consequences of default in payment of rent is
founded on the doctrine of forfeiture of lease for non-payment of rent and c
equitable principle of granting relief against forfeiture within the exercise of
discretion vesting in the Court The Transfer of Property Act, 1882, did not
in terms apply to the Str.te of Punjab; however principles underlying or
contained in such of the provisions of the Transfer of Property Act as are
essentially the principles of equity, justice and good conscience have been held
applicable to the State of Punjab and Haryana. [484-A-C]
D
Rullia Ram Hakim Rai v. S. Fateh Singh S. Sham Sher Singh, AIR (1962)
Punjab 256; Khadi Gram Udyog Trust v. Shri Ram Chandraji Mandir, (1978) l
SCC 44 and Mangat R ai v. Ved Parkash, (1969) CW 254, referred to.
Dial Chand v. Mahant Kapoor Chand, (1967) 69 PLR 248 and Bihari Lal E
v. Ajudhia Dass, (1970) RCR 76, referred to.
Namdeo lokman Jodhi v. Narmadabai and Ors., AIR (1953) SC 228, relied
on.
+
r.uru Nanak Ex-Servicemen Cooperative T.F. Society Group No. 2 and Ors. F
v. The State of Haryana and Ors., AIR (1972) Punjab and Haryana, 83 D.B.,
Aziz-Ud-Din and Ors. v. Guru Bhagwan Das and Anr., (1912) 17 IC 991 and
Smt. Amiya Dev. Dhirendra Nath Manda/, AIR (1971) Calcutta 263, approved.
Chand/ess-Chandless v. Nicholson, (1942) 2 All ER 315, referred to.
3, As there is ambiguity and the provision is susceptible to two meanings,
the Court should interpret it in the manner which will best serve the object
sought to be achieved. If there be a dispute raised as to the quantum of arrears
of rent, or as the rate ofrent which would obviously in its tum have an impact
G
on the quantum of arrears, then for purpose of payment or tender within H
472
SUPREME COURT REPORTS
[2002] 3 S.C.R.
A the meaning of the proviso, the Controller must make an assessment,
provisional in nature, and appoint the quantum of arrears including the rate
of rent (if necessary) and, calculating the interest and the cost of application.
There may be a dispute as to the date on which the monthly rent becomes
due according to the contract of tenancy which will also need to be resolved
B without which the period for which interest at six per cent per annum is liable
to be paid would not be capable of being quantified. It is necessary to place
such an interpretation on the language of the proviso. Firstly, it is in
conformity with the object of enactment The legislation was enacted to protect
the tenants from the hands of unscrupulous landlords and any interpretation
to the contrary would give an upper hand to the landlords and provide a tool
C in their hands to be cracked like a whip on weaker tenants. Secondly, such
an interpretation would bring the provision in conformity with the several
other legislations of the times. Thirdly, the provision suffers from ambiguity.
In the absence of any in-built indication enabling determination of the
quantum of arrears, if disputed, and the period for which interest at six per
cent per annum is to be calculated, the provision would become unworkable
D and hence liable to be stuck down under Article 14 of the Constitution. An
obligation is cast on the Court to interpret it in such a manner as to make it
workable and save it from the vice of being rendered unconstitutional.
(483-C-H]
E
F
4.1. It is a settled rule of construction that in case of ambiguity, the
provision should be so read as would avoid hardship, inconvenience, injustice,
absurdity and anomaly.
Stationary Interpretation (Edition 2001) By Justice G.P. Singh, referred
to.
4.2. The proviso to Section 13(2)(i) must be read as obliging the
Controller to assess, by means of passing an order, the arrears of rent. th~
interest and the post of litigation - all the three, which the tenant shall pay
or tender on the first date of first hearing of the main petition following the
date of such assessment by Controller. Such order, based on an opinion
G formed prima facie by perusal of the pleadings and such other material as
may be available before the Controller on that day, would be an interim or
provisional order which shall have to give way to a final order to be made on
further enquiry to be held later in the event of there being a dispute between
the parties calling for such determination. [486-E, F]
H
Mam Chand Pal v. Smt. Shanti Agarwal, [2002] 3 SCC 49, relied on.
+
RAKESH WAD HA WAN v.JAGDAMBA INDUSTRIAL CORPN.
4 73
4.3. Under proviso to Section 13(2)(i), the Controller having discharged A
his obligation of passing an order either suo motu or on his attention in this
regard being invited by either of the parties, it will be for the tenant to pay
or tender the amount provisionally assessed by the Controller on the first date
of hearing of the application for ejectment. On compliance, the Controller
would proceed to adjudicate upon the controversy arising for decision by B
reference to pleadings of the parties and by holding a summary enquiry for
the propose. Such adjudication shall be provisional and subject to later final
adjudication. The Controller may hold that the quantum of arrears as determined finally is (i) the same as was found to be due and payable under the
provisional order, (ii) is less than what was determined by the provisional
order, or (iii) is more than the one held to be due and payable by the C
provisional order. In the first case the Rent Controller has simply to pass an
order terminating the proceedings. In the second case he may direct the
amount deposited in excess by the tenant to be refunded to him. But in the
third case it would not serve the purpose of the Act if the tenant was held
liable to be evicted forthwith. The Controller directing the eviction of the D
tenant may pass a conditional order affording the tenant one opportunity of
and a reasonable time for depositing the amount of deficit failing which he
shall be liable to be evicted. This power in the Rent Controller can be spelled
out from the use of the word "may" in the expression "The Controller may
make an order directing the tenant to put the landlord in possession", as also
from the principle of equity and fair play that the tenant having complied E
with provisional order passed by the Controller should not be made to suffer
ifthe finding arrived at by the Controller at the termination of the proceedings
be different from the one recorded in the provisional order. While exercising
the discretion to make a conditional order of eviction affording the tenant an
opportunity of purging himself of the default the Controller may also take
into consideration the conduct of the tenant whether he has even after the F
passing of the provisional order continued to pay or tender the rent to the
landlord during the pendency of the proceedings as a relevant factor governing
the exercise of his discretion. Such a course would be beneficial to the landlord
too as he would be saved from the trouble of filing a civil suit for recovery of
rent which fell due during the pendency of proceedings for eviction before G
the Controller. (488-H; 489-A-G]
Dial Chand v. Mahan/ Kapoor Chand. (1967) 69 PLR 248, approved.
Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hiralal, AIR (1962)
SC 527; The Nawabganj Sugar Mills Co. Ltd and Ors. v. The Union of India H
474
SUPREME COURT REPORTS
[2002] 3 S.C.R.
A and Ors., [1976] 1 sec 120; Mis. Jaipur Mineral Development Syndicate, Jaipur
v. The Commissioner of l T., New Delhi, [1977] 1 SCC 508 and Mahant Ram
Das v. Ganga Das, Am (1961) SC 882, referred to.
Jurisprudence by Salmond; Law in the Making by Sir Allen, referred to.
B
5. The view of the law so taken advances the object sought to be achieved
by the legislation, serves best the interests of landlord and tenant both, removes
uncertainty in litigation and obscurity in drafting of the provision and also
accords with the principles of justice and equity. Even if it is an innovation,
it is in the field of procedural law, without affecting the substantive rights
and obligations of the landlord and the tenant and such innovation is
C permissible on the basis of authority and supported by principles of justice,
good sense and reason. The case is sent back to the Controller who shall, after
affording the parties an opportunity of making payment or tender arid then
proceed to decide the case afresh consistently with the law as settled now.
D
[491-A, B, D)
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2135 of
1999.
From the Judgment and Order dated 28.5.1998 of the Punjab and
Haryana High Court in C.R. No. 442 of 1998.
E
K. Ramamoorthi, Anil Mittal, K.C. Gupta and K.K. Gupta for the
F
Appellants.
Nidesh Gupta, Naveen Singh and Ms. Minakshi Vij, for the Respondents.
The Judgment of the Court was delivered by
R.C. LAHOTI, J. Late Parmodh Paul, who died during the pendency
of the proceedings and whose legal representatives, the appellants before u:..
have been brought on record, filed a petition under Section 13 of the East
Punjab Urban Rent Restrictions Act, 1949 (hereinafter 'the Act', for short),
against the respondent-firm through its two partners on the ground of the
G tenants having defaulted in payment of rent, a ground for eviction under
Clause (i) of sub-Section (2) of Section 13 of the Act. Hereinafter for the
sake of convenience and brevity, Late Parmodh Paul shall be referred to as
the 'landlord' and the respondents as the 'tenants'.
According to the averments made in the petition for eviction filed on
H 17.9.1991, the suit premises were obtained by the tenants on tenancy from
RAKESH WADHAWAN v.JAGDAMBA INDUSTRIAL CORPN. [R.C. LAHOTI, I.] 475
Shri Mani Ram and Smt. Ratan Devi, the then owners and landlords, under A
the rent note dated 20-9-1982. The rate of rent agreed upon was Rs. 2000 per
month excluding water and electricity charges. The tenants neither paid nor
tendered the arrears of rent from 1st March, 1985. There was a civil litigation
relating to partition of joint family properties, including the suit premises,
between the members of the family wherein, in terms of an interim order B
passed by the Civil Court, the tenants had deposited rent at the rate of Rs.
1800 per month for the period October 1985 to .January 1988. In the eviction
petition, the landlord prayed for a direction from the Rent Controller to evict
the tenants on the ground of non-payment of rent.
In the written statement dated 8. 1.1992 the tenants admitted to have C
executed the rent note reciting the rate of rent at Rs. 2000 per month, other
than water and electricity charges, but submitted that the rate of rent so
appointed was never intended to be acted upon and the real monthly rent of
the premises was Rs. 1800 only. In the family litigation, to which the tenants
were not a party, in terms of the order passed by the Civil Court, rent at the
rate of Rs. 1800 was deposited for the period October 1985 to January 1988. D
The rent for the period upto September 1985 was paid to the
landlords.Subsequent arrears accumulating, owing to infighting amongst the
legal heirs, for the period 1.2.1988 to September 1991, i.e. for 44 months,
amounting to Rs. 79200 plus interest Rs. 8910 and costs Rs. 75 totalling Rs.
88, 185 were tendered before the Rent Controller on 14.11.1991.
E
The Rent Controller held the rate of rent of. the demised premises was
Rs. 2000 excluding water and electricity charges. The amount tendered by
the tenants was found to be short and, therefore, invalid. Consequently, at the
end, the tenants were ordered to be evicted from the suit premises.
The tenants preferred an appeal before the Appellate Authority. The
Appellate Authority reversed the finding of the Rent Controller and held the
F
rate of rent to be Rs. 1800, at which rate the arrears had stood cleared and,
therefore, the tenants were not liable to be evicted. Civil Revision preferred
before the High Court by the landlord was dismissed by the High Court
forming an opinion that the finding of fact arrived at by the Appellate Authority G
was not liable to be interfered with in exercise of revisional jurisdiction. This
is an appeal by special leave preferred by the landlord.
We will first examine what is the rate of rent. It is admitted between
the parties that the agreed rate of rent as recited in the deed of lease executed H
476
SUPREME COURT REPORTS
[2002] 3 S.C.R.
A between the parties was Rs. 2000 but it was the case of the tenants that the
rate of rent so appointed was not intended to be acted upon. No reason has
been assigned to show why the parties would have arrived at an agreed rate
of rent of Rs. 2000 per month and yet chosen not to act upon it. The subsequent
conduct of the parties belies the plea taken by the tenants. For several months
B rent has been paid at the rate of Rs. 2000 p.m .. We would refer in particular
to the contents of the letter dated 9.8.1985 written by the tenants to Ratan
Devi, the then landlord wherein it is stated inter alia "we are forwarding
herewith two cheques of Corporation Bank, cheque No. CA 781770482 dated
9.8.1985 for Rs. 4000 being the amount of rent for June and July, 1985.
Another cheque for United Commercial Bank, cheque No. 256453 dated
C 9.8.1985 for Rs. 2000, the rent of August, 1985 receipt of which please be
acknowledged." The contents of this letter are neither disowned nor explained
and this Jetter sinks a death-nail into the plea of the tenants. Apart from other
evidence available on record, these two material pieces of evidence viz. the
deed of lease and tenants' Jetter abovesaid accompanied by cheques, are
enough to overrule the plea of the tenants and to hold that the rate of rent is
D Rs. 2000 p.m.
The Appellate Authority, in arriving at a finding to the contrary, was
deeply impressed by the fact that in the family litigation for partition of the
property, the plaintiffs therein had alleged rate of rent of these premises as
E Rs. 1800 p.m. and this averment was not disputed by the landlord herein,
who was one of the defendants therein. The Appellate Court overlooked
some very relevant facts. The plaintiffs in the partition suit were not the
landlords realizing the rent; that was the landlord herein who was realizing
the rent from the tenants. By an interim order the Civil Court had restrained
the tenants from making payment of rent to the litigating parties and had
F directed the rent to be deposited in the Court so as to be available for
distribution to the party found entitled at the end to release of the rent. The
written statement filed in the civil suit by the landlord-plaintiff herein did not
contain any admission as such; there was a mere failure to object. In that suit,
rent payable by the tenants herein was not a subject matter of controversy;
G it was a side issue." Admission is only a piece of evidence and can be explained;
it does not conclusively bind a party unless it amounts to ari estoppel. Value
of an admission has to be determined by keeping in view the circumstances
in which it was made and to whom. A mere failure to object cannot be placed
on a footing higher than an admission. If the two clear cut admissions made
by the tenants, referred to herein above, were to be weighed against the
H landlord's mere failure to object about a wrong averment as to rate of rent
I ...
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RAKESH WAD HA WAN v.JAGDAMBA INDUSTRIAL CORPN. [R.C. LAHOTI, J.] 4 77
in a case where it was not a point in issue, then no inference other than the A
one of the rate of rent being Rs. 2000 p.m. could have been drawn. To that
extent, the finding arrived at by the Appellate Authority suffer from perversity
and should have been set aside by the High Court even in exercise of revisional
jurisdiction. On the material available on record, no inference other than the
rent of the suit premises being Rs. 2000 p.m., excluding water and electricity B
charges, can be drawn. We hold it accordingly.
Though we are holding the rate of rent as Rs. 2000 p.m. excluding
water and electricity charges but it cannot be denied that to begin with there
was a serious dispute as to the rate of rent as to whether it was Rs. 2000-,
and hence followed the dispute whether the amount tendered by the tenant C
in the suit along with interest and cost of application amounted to compliance
with proviso under Section I 3 (2)(i), and if so, whether a decree for eviction
could at all have been passed. All such disputes were genuine and not frivolous
or just in air without any basis. In this appeal, the tenant-respondents have,
·in the affidavit of Ashwini Kumar, supported by documents, filed with the
leave of the Court, set a statement of payments made, which reveals that the D
controversy between the parties is very narrow, and even if there is some
default in payment it is marginal and not deliberate. There is a serious lacuna
with which the relevant provision of the Act suffers which we propose to
demonstrate and deal with so as to remove the same, if we can.
The landlord-tenant litigation accounts for a major part of litigation
pending in courts of law or before statutory authorities. Also a substantial
number of cases consists of those wherein eviction is prayed for on the
ground of non-payment of rent or the tenant being a defaulter. The enactment
E
of 1949 Act was preceded by the Punjab Urban Rent Restriction Act 1941
which was intended to restrict unreasonable hike in rent because of shortage F
of accommodation felt on account of housing properties being requisitioned
by the Government to provide accommodation to the families of civil and
army officers engaged in the war effort in some capacity or the other. For
raising additional revenue to compensate the costs of the war, new tax on the
immoveable property was imposed. The 1941 Act was to remain in force
only for a period of five years. It was replaced by 194 7 Act enacted by the G
Governor of Punjab in exercise of his powers under Section 93 of the
Government of India Act, 1935. Then the country witnessed partition and
large scale migration of population between the East and West Punjab. In this
wake the 1949 Act was enacted. Statement of Objects and Reasons of the Act
stated, inter alia, that need was felt to re-enact as a permanent measure, a H
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A legislation for restricting the increase of rents of certain premises situated
within the limits of urban areas and the protection of tenants against malafide
attempts by their landlords to procure their eviction. The State legislation
enacted more than 50 years ago as a measure for taking care of the then
problem created by the then circumstances has, nevertheless, continued to
B remain in operation till this date. The legislation needs a new look and
revamping at the hands of the legislature. There are several lacunae in the
provisions of the Act creating bottlenecks in their smooth functioning
highlighted in several judicial pronouncements and such deficiencies are
proving paradise for unscrupulous litigants and also to some extent frustrating
the very purpose sought to be achieved by the legislation. One of such
C deficiencies in legislation, as we would highlight a little. later, is capable of
being demonstrated from the facts of the present case. Before we may enter
into that discussion, we find it appropriate to reproduce the observations
made by Professor D.N. Jauhar, Department of Laws, Punjab University
based on his research and survey in his work "Rent Matters on Trial" (1998),
D at page 23:
E
F
G
"The present Rent Act had outlived its utility decades ago and has
become totally outdated. The Act which was initially introduced as a
temporary short term measure for five years only, during the Second
World War, has become a permanent piece of legislation. One would
not mind its being permanently on the Statute Book but what is really
disturbing is that it has stagnated for the last five decades. No effort
whatsoever, worth the name, has been made either by the State
Government, or the Central Government to suitably revise the Act
from time to time so as to keep pace with the changing socio-economic
pattern of society.
The need of the hour is a law which will regulate, not control, the
relations between an owner and an occupier with the sole object of
harmonising relations between the two. Such a statute is the dire need
of the hour which requires that the present Act be consigned to
history."
In Nagindas Ramdas v. Dalpatram Jccharam Brijram and Ors., [1974]
l SCC 242 this Court summed up the reasons which persuaded the spurt of
rent control legislations in different States of the country in these words :
"The strain of the last World War, Industrial Revolution, the large
H
scale exodus of the working people to an urban areas and the social
,
f
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1,
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RAKESH WADHA WAN v.JAGDAMBA INDUSTRIAL CORPN. [R.C. LAHOTI, J.]
4 79
and political changes brought in their wake social problems of A
considerable magnitude and complexity and their connected evils.
The country was faced with spiralling inflation, soaring cost of living,
increasing urban population any scarcit)' of accommodation. Racketing
and large scale eviction of tenants under the guise of the ordinary
law, exacerbated those conditions making the economic life of the B
community unstable and insecure. To tackle these problems and curb
these evils, the Legislatures of the States in India enacted Rent Control
legislations."
Almost similar necessity existed in the State of Punjab for enacting the
1949 Act as pointed out by this Court in Attar Singh v. Inder Kumar, AIR C
(1967) SC 773. The Court observed that the Act is a piece of ameliorative
legislation in the interests of tenants of premises in urban areas, so that they
may be protected against large increase in rents and from harassment by
eviction.
It is high time when State of Punjab should have a fresh look at Section D
13 and other relevant provisions of the Act learning lessons from the manner
in which these provisions have so far worked and by reviewing how far the
object which the legislation sought to achieve has been achieved or frustrated.
useful assistance can be taken from the Rent Control legislations in other
States to see how pari materia provisions have been drafted therein. The E
phraseology employed in drafting Section 13(2)(i) with its proviso and the
manner in which it has been so far interpreted, afo, in our opinion, far from
serving the object of enactment, rather defeating it.
The relevant part of Sec.13 reads as under:
"13. Eviction of tenants. (I) A tenant in possession of a building or
rented land shall not be evicted therefrom in execution of a decree
passed before or after the commencement of this Act or otherwise
F
and whether before or after the termination of the tenancy, except in
accordance with the provisions of this Section, [or in pursuance of an
order made under Section 13 of the Punjab Urban Rent Restriction G
Act, 1947, as subsequently amended].
(2) A landlord who seeks to evict his tenant shall apply to the
Controller for a direction in that behalf. If the Controller, after
giving the tenant a reasonable opportunity of showing cause H
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•
against the applicant, is satisfied
(i)
that the tenant has not paid or tendered the rent due by him
in respect of the building or ,rented land within fifteen days
after the expiry of the time fixed in the agreement of tenancy
with his landlord or in the absence of any such agreement,
by the last day of the month next following that for which
the rent is payable:
Provided that if the tenant on the first hearing of the application for
ejectment after due service pays or tenders the arrears of rent and
interest at six per cent per annum on such arrears together with the
cost of application assessed by the Controller, the tenant· shall be
deemed to have . duly paid or tendered the rent within the time
aforesaid;
xxx
xxx
xx xx
D
"the Controller may make an order directing the tenant to put the
landlord in possession of the building or rented land and if the
. Controller is not so satisfied he shall make an order rejecting the
application:
Provided that the Controller ·may give the tenant a reasonable
E
time for putting the landlord in possession of the building or rented
land and may extend such time so as not to exceed three months in
the aggregate".
The expression employed is 'the rent due'. A Full Bench of the High
Court of Punjab in Rullia Ram Hakim Rai v. S. Fateh Singh S. Sham Sher
F Singh, AIR (1962) Punjab 256, has taken the view that the expression 'rent
due' in contradistinction with the words 'rent legally due' or 'rent recoverable'
or the 'arrears ofrent within the period of limitation' implies that the obligation
of the tenant to pay or tender tlie rent extends to depositing all the arrears of
rent without regard to the period of limitation. This view finds support from
G a decision of this Court in Khadi Gram Udyog Trust v. Shri Ram Chandraji
Mandir, [1978] 1 SCC 44, wherein, interpreting the pari materia provision
contained in the U.P. Urban Buildings (Regulation of Letting, Rent and
Eviction) Act, 1972, this Court has held that the expression "entire amount
of rent due" includes the rent the recovery whereof has become barred by
time, for, the statute of limitation bars the remedy but does not extinguish the
H right. The learned counsel for the tenants conceded during the course of
,l
•
RAKESH WAD HA WAN v.JAGDAMBA INDUSTRJAL CORPN. [R.C. LAHOTI, J.]
48 J
hearing that on the present framing of the provision under examination, the A
obligation of the tenant to pay or tender even time barred rent, to take
advantage of the proviso, cannot be denied.
The question still remains what is the amount which the tenant should
tender and what is the course to be followed if there be any genuine dispute
between the amount claimed or alleged by the landlord to be due and the B
amount which the tenant admits or alleges to be due. Apparently the Punjab
Act does not provide any mechanism taking care of such a situation. A
Division Bench of the High Court in Mangat Rai v. Ved Parkash, (I 969) CLJ
254, took the view that it is wrong to say that the proviso casts only a
unilateral duty on the tenant, without there being any corresponding duty and C
discretion vesting in the Court in connection therewith. There are reciprocal
"
obligations created by the proviso. So far as the calculation of arrears of rent
and interest is concerned, that is the sole responsibility of the tenant. But so
far as the assessment of the costs is concerned, the proviso assigns that
function to the Controller. There are a few other decisions also taking the
same view. However, we do not find any in-depth discussion or any attempt D
made at analyzing and interpreting the proviso in the light of the object
behind the enactment.
There may be unscrupulous landlords, who with the purpose of placing
the tenants in a quandary and thereby earning an easy order of eviction may E
highly inflate the claim. For example, the landlord may claim the arrears at
a highly inflated rate of rent, or may claim rent alleging it to be in arrears
though the same had already stood paid and for which the landlord chose not
to issue receipts for payment, or there may be a bonafide dispute as to the
rate at which the rent was paid or is payable. Several other State legislations
provide for an interim or provisional order being passed by the Court or the F
Rent Controller, resolving the dispute momentarily by a judicial order, with
which order the tenant should comply and failing which the tenant may
suffer adverse consequences. A provision for such an interim or provisional
order has not been expressly made in the Punjab Act; yet can it be spelt out?
If we were to go by adopting an approach approving the interpretation placed G
on the proviso by the Punjab High Court in Mangat Ram's case (supra),
serious and uncalled for consequences are bound to follow.
In Dial Chand v. Mahant Kapoor Chand, (1967) 69 PLR 248, the
learned Single Judge of Punjab High Court opined that in the event of there
being a dispute as to the quantum of rent, the tenant can take one of the three H
'
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[2002] 3 S.C.R.
A courses:
_,
"He can under protest make payment or tender of the arrears at.the
rate claimed by the landlord in the ejectment application, and if the
rate is found subsequently to be less, he can hope for adjustment of
B
. the excess payment. He can come forward with a straight statement
of what is the true rate of rent and on that proceed to comply with
the proviso, in which case he has the benefit of the proviso, if the
finding is that the rate stated by him is the rate of rent for the tenancy.
Lastly, he can enter into a dispute with the landlord, as in this case,
z
and insist upon his lower rate of rent and then take the consequence
c
if he is not able to prove that that is the actual rent. If he fails to
establish this ground, obviously he fails to have advantage of the
proviso."
0
This is too simplistic an approach and defeats the purpose of enactment
as would be seen shortly hereafter. In Behari Lal v. Ajudhia Dass, [1970]
D RCR 76, the tenant .tendered full amount claimed by the landlord to plead
that what he was paying was more than the rent due and reserved his right ·
to recover back the excess paid by him. The plea. forcefully advanced by the
A
landlord was that as the tenant had pleaded the amount tendered by him to
~e in excess,. accompanied by a claim for refund, the same was not a valid
E tender, and therefore, the tenant was liable to be ejected. Such a tall plea of
-the landlord, of course, did not find favour with the High Court and rightly
so. Yet the manner in which Section 13 (2)(i) with the proviso has been
interpreted in some of the decisions by Punjab High Court, if allowed to
prevail, the consequence would be that the tenants shall have to succumb to
the pressure of the .landlord by conceding and making the payment or tender
F as dictated by the landlord along with interest and costs; else he inescapably
),..
~
suffers the risk of eviction. If he raises a dispute in defence even if bonafide,
and howsoever believ~d to be true, he must suffer eviction if on trial, for any
reason including any fortuitous circumstances, he fails in substantiating his
plea though he very much believed, and genuinely, that he would be able to
do so. A tenant forcefully raising a plea in his defence stands to lose and
"
G suffer for his failure to substantiate his defence. On the contrary, if the
landlord has made a false or exaggerated claim, submitted to by the tenant
by making a deposit with interest and costs, and the landlord fails in
substantiating his claim of the arrears, he does not stand to lose anything.
loThus there are no holds barred for the landlord while the tenant is subject to
H strict discipline. This could not have been the intendment of an enactment,
t.
>
RAKESH WADHA WAN v.JAGDAMBA INDUSTRIAL CORPN. [R.C. LAHOTI, J.] 483
which as its Preamble speaks, is meant to restrict the eviction of tenants from A
urban premises.
There are two means of resolving the riddle : firstly, by placing such
meaningful interpretation on the provision as would enable the legislative
intention being effectuated; and secondly, by devising such procedure without
altering the structure as would enable the substantive law being meaningfully B
implemented. Let us see whether the expression 'assessed by the Controller'
qualifies only 'the cost of application' or qualifies the entire preceding
expression i.e. 'the arrears of rent and interest at six per cent per annum on
such arrears together with the cost of application'. As there is ambiguity and
the provision is susceptible to two meanings, the Court should interprei it in C
the manner which will best serve the object sought to be achieved.