# SMT. SHRISHT DHA WAN v. ·~ SHAW BROTHERS

- **Citation:** [1991] Supp. 3 S.C.R. 446
- **Court:** Supreme Court of India
- **Decided:** 1991-12-13
- **Bench:** Dr. T .K.Thommen, R.M. Sahai
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/smt-shrisht-dha-wan-v-shaw-brothers-11375
- **Pages:** 26

## Headnote

,_
Rent Control and Eviction
.
·_;~~
Delhi Rent Control Act, 1958:
,..
c
S.21-Applicationfor permission to let out residential premises/or short
period-Requirements of-Order of Rent Controller granting permissio~
When can be challenged.
'Fraud -What constitutes for purposes of s.21: Onus to prove fraudOn whom lies.
D
Words and Phrases:
'Fraud': 'jurisdictional fact' -Meaning of.
•
E
The ·appellant-landlady on 3.11.1978, applied for permission under
s.21 of the Delhi Rent Control Act, stating that she wanted to give the
ground nour of her house on rent for residential purposes for a short
period of three years, whereafter she would need the house. After recording the statements of the landlady in support of her application, and of the
_,
tenant who had agreed in writing to vacate the house after the stipulated
F period, the Rent Controller granted the permission. Twenty days before
the tenancy was to come to an end, the tenant-firm vainly requested the
landlady to renew the lease; and the latter filed an execution application
under s.21 of the Act, which was successfully challenged by the tenant-
"'.;~
farm on the ground that the permission was obtained by the landlady by
playing fraud as she knew from the very beginning that the premises were
G availa~le for letting out indefmitely.
The Rent Controller held that in the absence of any averment in the
-.
application of the landlady that she would require the premises for her
younger son, her statement in support of it could not be looked into; and
that, apart from the variance between pleadings and proof, the landlady
H failed to establish that the premises were let out with intention to get it
446
J
SMT. DHA WAN v. SHAW BROS.
447
back after three years for her second son. It was also held that even
assuming that the premises were not needed by her for her son could not
validate the sanction.
The appellate authority, agreeing with the findings of the Controller,
held that since the landlady stated that she requirtid the premises for
herself after three years and she was having an accommodation which was
sufficient for her and her family, the permission obtained by her was
vitiated by fraud.
After unsuccessfully approaching the High Court, the landlady
preferred the appeal by special leave to this Court.
It was contended by the appellant that the authorities below misdirected themselves in placing the burden on her to prove that the
permission obtained by her was genuine; and that it was for the tenant to
establish that the permission was obtained by playing fraud.
A
B
c
On the question of the requirements of s. 21 of the Delhi Rent
D
Control Act for the purpose of acl'.ording permission, and as to what
constitutes fraud in relation thereto,
Allowing the .landlady's appeal, this Court,
HELD: (By the Court): 1. Section 21 of the Delhi Rent Control
Act,1958 operates in terms thereof, notwithstanding any other law, unless
the contract itself, or the permission of the Controller, is vitiated by fraud.
Absent such vitiating circumstance, and once the Controller has accorded
sanction, the parties to the contract are presumed to have. entered into
their relationship and the law binds them to the terms of their agreement.
[pp. 456EF; 4610]
E
F
2. Section 21 of the Act is attracted in the specific circumstances
postulated by it-the absence of requirement by the landlord of the whole
or any part of the premises for a particular period, the period must be
clear and definite, the lack of requirement must be honestly felt by the
landlord, the permission of the Controller in the prescribed manner for
G
the lease orthe premises in. question, the agreement in writing between the
landlord and the. tenant for the lease of such premises as a residence for
'the agreed.period, the refusal of the tenant to vacate the premises on the
. exp fry orthat period, an<J an application made within the prescribed time
by the landlord invoking the power of the Controller under the section.
.
. [pp.456GH; 457A;

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A
SMT. SHRISHT DHA WAN
v.
·~
SHAW BROTHERS
...
DECEMBER 13, 1991
B
[DR. T .K.THOMMEN AND R.M. SAHAI, JJ.]
,_
Rent Control and Eviction
.
·_;~~
Delhi Rent Control Act, 1958:
,..
c
S.21-Applicationfor permission to let out residential premises/or short
period-Requirements of-Order of Rent Controller granting permissio~
When can be challenged.
'Fraud -What constitutes for purposes of s.21: Onus to prove fraudOn whom lies.
D
Words and Phrases:
'Fraud': 'jurisdictional fact' -Meaning of.
•
E
The ·appellant-landlady on 3.11.1978, applied for permission under
s.21 of the Delhi Rent Control Act, stating that she wanted to give the
ground nour of her house on rent for residential purposes for a short
period of three years, whereafter she would need the house. After recording the statements of the landlady in support of her application, and of the
_,
tenant who had agreed in writing to vacate the house after the stipulated
F period, the Rent Controller granted the permission. Twenty days before
the tenancy was to come to an end, the tenant-firm vainly requested the
landlady to renew the lease; and the latter filed an execution application
under s.21 of the Act, which was successfully challenged by the tenant-
"'.;~
farm on the ground that the permission was obtained by the landlady by
playing fraud as she knew from the very beginning that the premises were
G availa~le for letting out indefmitely.
The Rent Controller held that in the absence of any averment in the
-.
application of the landlady that she would require the premises for her
younger son, her statement in support of it could not be looked into; and
that, apart from the variance between pleadings and proof, the landlady
H failed to establish that the premises were let out with intention to get it
446
J
SMT. DHA WAN v. SHAW BROS.
447
back after three years for her second son. It was also held that even
assuming that the premises were not needed by her for her son could not
validate the sanction.
The appellate authority, agreeing with the findings of the Controller,
held that since the landlady stated that she requirtid the premises for
herself after three years and she was having an accommodation which was
sufficient for her and her family, the permission obtained by her was
vitiated by fraud.
After unsuccessfully approaching the High Court, the landlady
preferred the appeal by special leave to this Court.
It was contended by the appellant that the authorities below misdirected themselves in placing the burden on her to prove that the
permission obtained by her was genuine; and that it was for the tenant to
establish that the permission was obtained by playing fraud.
A
B
c
On the question of the requirements of s. 21 of the Delhi Rent
D
Control Act for the purpose of acl'.ording permission, and as to what
constitutes fraud in relation thereto,
Allowing the .landlady's appeal, this Court,
HELD: (By the Court): 1. Section 21 of the Delhi Rent Control
Act,1958 operates in terms thereof, notwithstanding any other law, unless
the contract itself, or the permission of the Controller, is vitiated by fraud.
Absent such vitiating circumstance, and once the Controller has accorded
sanction, the parties to the contract are presumed to have. entered into
their relationship and the law binds them to the terms of their agreement.
[pp. 456EF; 4610]
E
F
2. Section 21 of the Act is attracted in the specific circumstances
postulated by it-the absence of requirement by the landlord of the whole
or any part of the premises for a particular period, the period must be
clear and definite, the lack of requirement must be honestly felt by the
landlord, the permission of the Controller in the prescribed manner for
G
the lease orthe premises in. question, the agreement in writing between the
landlord and the. tenant for the lease of such premises as a residence for
'the agreed.period, the refusal of the tenant to vacate the premises on the
. exp fry orthat period, an<J an application made within the prescribed time
by the landlord invoking the power of the Controller under the section.
.
. [pp.456GH; 457A; 461C]
H
448
SUPREME COURT REPORTS
[1991) SUPP. 3 S. C.R.
A
3.(i) Permission granted under s.21 of the Act can be assailed by the
'""
•.;::----
tenant only if it can be establishe~ that it was vitiated by fraud or
collusionor jurisdictional error which in the context of Section 21 is
t
nothing else except fraud and collusion. [pp.457F; 468AB]
(ii) Fraud or coJlusion must relate to the date when permission was
·~
B granted. [pp. 457GH; 458A; 468B]
l
(iii) Permission carries a presumption of correctness which can be
permitted to be challenged not only by raising objection but proving
....
itprima facie to the satisfaction of C~ntroller before landlord is called
..--
uponto file reply or enter into evidence. [pp.459B;468BC]
l
c
l
(iv) No rashing or roving inquiry should be permitted at the stage of
execution. [pp. 459E; 468C]
(v) A permission does not suffer from any of these errors merely
D
because no reason was disclosed in the application at the time of cretion
r
of short term tenancy. [pp.4588; 4680)
(vi) Availability of sufficient accommodation either at the time of
grant of permission or at the stage of execution is not a relevant factor I
for deciding validity of permission. [p.468EJ
E
4. (i) Any objection to the validity of sanction should be raised prior
to expiry of the lease. [p.462F]
--("-
(ii) The objection should be made immediately on becoming aware
"
of fraud, collusion etc. [pp.459B; 462F]
·
.f ,_
F
(iii) A tenant may be permitted to raise objection after expiry of
lease in exceptional circumstances only. [p.462G]
~
(iv) Burden to prove fraud or collusion is on the person alleging
r
"
it.[p.459B; 462G]
..-l:"
G
5. The authorities in the instant proceedings misunderstood the
guiding principle of burden of proof, misconstrued the requirements of
the section, and reached a totally unreaso~able conclusion that the original order of the controller was obtained by fraud. The High Court was
r
wrong in affirming the totally unsustainable conclusion reached by the
H authorities. [pp.459EFG; 471A]
t
..
-4
i
SMT. DHA WAN v. SHAW BROS.
449
Per Dr. Thorrimen, J. (Concurring)
A
I. Section 21 of the Delhi Rent Control Act, 1958 postulates that both
the landlord and the tenant act honestly. If the permissi?n of the Controller has been fraudulently obtained by the landlord, and the tenant has
been let into the premises, the landlord loses the right to seek eviction of
'
the tenant by the summary procedure contemplated by the section.
B
---...
Likewise if the tenant has deJiberately-but not a1ccidently-violated the
I
·\
terms of the lease, by using the premises otherw~.e than as permitted by
I
the section, he is liable to be evicted on an application by the landlord,
..
although the stipulated period of the lease has not expired. All this is
because the very basis of the Controller's order has been violated by the
...
fundamental breach of the guilty party.[pp.458(iH; 459A]
...
c
2. Fraud is essentially a question of fact, the burden to prove which
is upon him who alleges it. He who alleges frallld must do so promptly.
[p.459B]
3.1 There is a presumption of legality in favour of a statutory order.
'.j
[p.459B]
D
....
l'
3.2 The Controller's order under s.21 is pres'umed to be valid until
proved to be vi~iated by fraud or ma/a fide. [p.459BJ
4.1 That the landlord does not require the building is a question of
honest belief heid by him at the relevant time, that is, at the time of .his
E
seeking the Controller's permission. The landlord must have honestly and
reasonably believed that he would not require the building for the period
specified in his application to the ControHer for permission to let out the
premises. If that belief was truthfully hield by him at the time of his
application to the ControJJer, the fact that subsequent events proved him
wrong, and that he did not require the buiJdini~ not only for the period
F
stated in the application, but also for a longer period, or that he required
it earlier than anticipaied would not make the belief any less honest or
valid. [pp.457GH; 458AB]
4.2 All that the landlord is required to state in his application for
permission of the Controller is the absence of his requirement of the
premises for the particular period, but he is not bound to state its reasons.
G
[p.458B]
Jnder Mohan Lal v. Ramesh Khanna, [1987] 4 SCC 1, relied on.
4.3 What. s. 21 postulates is the bona fide belief of an honest and
)
reasonable landlord and not the reckless &nd casual opinion of an irresponsible and careless person.[p. 458C]
H
'
(
~
A
B
c
D
E
F
G
H
450
SUPREME COURT REPORTS
(1991] SUPP. 3 S. C.R.
4.4 There is no fraud if what the landlord honestly believed to be true
turned out to be false. The section does not place any higher degree of
responsibility on the landlord. [p. 458D]
5. If the order under s.21- was obtained by the fraud of the party
seeking it or if the Controller made a 'mindless order' in the sense of
acting malafide by illegitimate exercise of power owing to non-application
of his mind to the strict requirements of the section, then the special
mechanism of the section would not operate.[ p.459BC]
S.BNoronah v. Prem Kumari Khanna, [1980] 1 SCC 52, relied
on.
6. The order of the controller in the circumstances warranted by
section 21 is a self-executing order requiring no further proceeding. It is
at once a sanction for the lease and for eviction on expiry of the period of
the lease. Neither can the landlord evict the tenant during the period of the
lease nor can the tenant remain in possession beyond that period. None has
any right outside the section which operates strictly in terms thereof
provided the conditions stipulated therein are unquestionably
satisfied.[p.457D-EJ
JR.Vohra v. India Export House Pvt. Ltd. & Anr., [1985] 1 SCC 712,
relied on.
Shiv Chander Kapoor v. Amar Bose, [1990] 1 SCC 234; Subhash Kumar
Lata v. R.C.Chhiba and Another, [1988] 4 SCC 709; V.S.Rahi and Another v.
Smt. Ram Chambeli, [1984] 1 SCC 612; Yamuna Maloo v. Anand Swarup,
[1990] 3 SCC 30; Pankaj Bhargava and Another v. Mohinder Nath and
Another, AIR 1991SC1233; Smt. Dhanwanti v. DD.Gupta, [1986] 3 SCCl
and Pukhraj Jain v. Padma Kashyap and Another, [1990] 2 SCC 431,
referred to.
Per Sahai , J.
1.1 Mistake of fact in relation to jurisdiction is an error of jurisdictional fact. [p.46SAJ
1.2 A jurisdictional fact is one on existence or non-existence of which
depends assumption or refusal to assume jurisdiction by a Court, tribunal
or an authority.[p.464G]
l.3 No statutory authority or tribunal can assume jurisdiction in
respect of subject matter which the statute does not confer on it and if by
' .
SMT. DHAWANv. SHAW BROS.
451
deciding erroneously the fact on which jurisdiction depends the court or
A
tribunal exercises the jurisdiction then the order is vitiated. Error of
jurisdictional fact renders the order ultra vires and bad.
Raza Textiles v. Income Tax Officer, Rampur. [1973] 1 SCC 633,
relied on.
Wade Administrative Law, referred to.
1.4 As regards section 21 of the Delhi Rent Control Act, 1958, the
jurisdictional fact can be said to be availability of vacant premises which
are not required by the landlord for the particular period and its letting
out for residential purpose.
1.5 A permission obtained under section 21 of the Act may be
vitiated if the premises were not vacant on the date of application or if the
permission is obtained in respect of non-residential premises.
1.6 An error of jurisdictional fact which could entitle a Controller to
re-examine the matter in the context of s.21 is fraud or collusion.
2.1 Fraud in public law is not the same as fraud in private law. Fraud
in public law or administrative Jaw, as it is developing, is assuming
different shade. It arises from a deception committed by disclosure of
incorrect facts knowingly and deliberately to invoke exercise of power and
procure an order from an authority or tribunal and must result in exercise
of jurisdiction which otherwise would not ha'Ve been exercised. Misrepresentation must be in relation to the conditions provided in a section on
existence or non-existence of which power can be exercised ..
Khawaja v. Secretary of State for Home Deptt., 1983(1) All England Reports p.765 andDerryv.Peek [1889] 14 App. Cas. 337,
referred to.
Craies on Statute Law, 7th Edn. p. 79, referred to.
2.2 Fraud or misrepresentation resulting in vitiation of permission in
context of s.21 therefore could mean disclosure of false facts but for which
the Controller would not have exercised jurisdiction.
2.3 But non-dislosure of a fact not required by a statute to be
disclosed does not amount to misrepresentation or may not amount to
fraud.
B
c
D
E
F
G
H
452
SUPREME COURT REPORTS
[1991] SUPP. 3 S. C. R
A
Anson's Law of Contract, referred to.
~·
2.4 Non-disclosure of any reason in the application under s.21 of the
Act about the need of the premises after expiry of period or failure to give
reason that the premises shall be required by son, daughter or any other
family member does not result in misrepresentation or fraud.
B
~
2.5 It is not misrepresentation under s. 21 to state that the premises
shall be needed by the landlord after expiry of the lease even though the
premises in occupation of the landlord on the date of application or after
expiry of period were or may be sufficient.
~
2.6 Section 21 does not place any positive or comprehensive duty on
c
the landlord to disclose any fact except that he did not need the premises
for the specified period. Even the Controller is not obliged with a proactive duty to investigate.
3.1 An action is mindless when it is thoughtless or without any care
or caution. In law it is passing of an order without any regard to the
D
provision of law. If the section requires the authority to pass an order on
inquiry or on being satisfied of existence or non-existence of a fact then the
I"'
duty cast is higher and an order which is passed without due regard to
duty to investigate then the order may be mindless. But in absence of any
statutory requirement it may utmost be regulatory oversight.
E
3.2 An order made under section 21 may be mindless if at the time
of granting permission there is material to indicate that the premises were
being let out for a short period even though It was available .for indefinite
letting. But in absence of any material to indicate to the contrary if the
Controller grants permission on the mere statement in the application that
the premises was available for being let out for a short time as it was not
F
required by the landlord and it is supported by a statement recorded
before Controller which is not objected to by the tenant rather agreed then
it would be too much to say that the exercise of power was made
thoughtlessly.
""
Shiv Chand Kapoor v. Amar Bose, [1991) 1 SCC 234; Smt.
~
G
Dhanwanti v. DD.Gupta, [1986] 3 SCC 1; Inder Mohan Lal v •.
Ramesh Khanna, [1987] 4 SCC 1 and Joginder Kumar Butan v.
R.P.Oberoi, [1987] 4 SCC 20, relied on~
3.3 There is no statutory requirement for the Controller to enter into
enquiry on application under sectfon 21 made by a landlord supported by
H
a statement and agreed to by the tenant.
~<~
·"-
SMT. DHAW AN v. SHAW BROS.
453
4.1 Error in assumption of jurisdiction should not be confused with
A
mistake, legal or factual in exercise Of jurisdiction. In the former the order
is void whereas in the latter it is final unless set aside by higher or
competent Court or authority.
4.2 A permission granted under section 21 once permitted to attain
finality becomes unassailable on error in exercise of jurisdiction. It could
B
be c~llenged later or in execution only if it could be brought in the
category of a void or ultra vires permission. Such invalidity can arise if
jurisdiction is exercised by misrepresentation of facts either about existence or vacancy or nature of premises.
5.1 Letting under s. 21 is not hedged with any restriction. Throwing
C
the whole or part of the premises by landlord for Jetting out is not linked
with his existing accommodation, its number or sufficiency. The one is not
dependent on the other. Even letting for paying instalment of Joan, for
constructing the premises or its re-letting cannot be said to be contrary to
section 21.
5.2 Valid~ty of permission has to be judged on the date of grant of
application. Availability of premises for indefinite letting cannot be judged
by subsequent events or the failure of the landlord to occupy immediately
for personal, financial economic or other reasons.
6.1 The declaration by the landlord that the premises were available
for letting out for short period is not required to be backed by any reason.
And the application filed under s.21 with or without reasons is neither bad
nor contrary to law. It may be accompanied by statement of reasons or
may merely state that the landlord does not require the premises for the
period mentioned therein. In either case the application shaJJ be in
accordance with law.
6.2 If the Controller is satisfied that what was stated was correct he
is obliged to grant permission. This satisfaction may be arrived at by
believing the statement or requiring a landlord to give reasons or furnish
such information as the Controller may consider necessary to satisfy
himself that the statement made by landlord was correct.
6.3 But once satisfaction is arrived at and the order is passed it
becomes operativ~ and final. It cannot be re-opened because of mere
mistake or error or in the circumstances a more reasonable approach
D
E
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should bav@ b@@n to r@ject the application or allow it after obtaining better
H
details.
A
454
SUPREME COURT REPORTS
[1991] SUPP. 3 S. C.R.
7.1 If a tenant has objection to raise to the validity of the limited
vacancy, it has to be done prior to the lapse of the lease and not as a
defence to the landlord's application for being put in possession. The
tenant cannot wait for the entire period of lease and then raise objection
to the execution on fraud or collusion unless he is able to establish that it
was not known to him and he came to know of it, for the first time only at
B
the time of execution.
Shiv Chand Kapoor v. Amar Bose, [1991] 1 SCC 234; Pankaj
Bhargava v. Mohinder Nath, AIR 1991 SC 1233 and Yamuna
Maloo v. Anand Swarup, [1990] 3 SCC 30, relied on.
C
7.2 The Controller shall not be justified in entertaining an objection
D
E
F
G
H
in execution unless the tenant establishes, affirmatively, that he was not
aware of fraud before expiry of the period of lease.
8.1 In the instant case, the tenant was not entitled to claim the
protection as the objection filed by him to execution application was in
defence to landlord's application for delivery of possession. The application is conspicuously silent on knowledge of fraud. It did not whisper that
the tenant was unaware of facts stated therein during subsistence of lease.
The tenant's application was, therefore, Hable to be dismissed.
8.2 No exceptional circumstance could be deciphered either from the
application or from the statement of the tenant. Neither the Controller nor
the Appellate Authority found any exceptional circumstance which could
justify the tenant to resist the execution after expiry of the period.
8.3 The authorities were not right in assuming fraud or misrepresentation on mere averment in the objection of the tenant, and in proceeding
to record the finding on premise that the landlady was required to prove
it.
8.4 Apart from the procedural error, even the finding that the
premises were not needed by the landlady after three years is not well
founded. The primajacie evidence led by her to prove that her statement
that she shall be requiring the premises after three years was not a mere
make belief or a pretence but a genuine statement on the state of affairs
as it stood then, and the averment could not be construed as misrepresentation.
8.5 The requirement of a landlord includes the requirement of a son
.>
SMT. DHAW AN v. SHAW BROS. [THOMMEN, J.]
455
or daughter or any member of the family. If the appellant gave the
premises for three years believing that in the meantime either of her sons,
who were temporarily residing out of Delhi in connection with their
employment, may require the premises, which may not have come out to
be exactly as she desired it to be, it could not invalidate the permission.
A
8.6 The Controller was, therefore, not justified in entertaining the
B
tenant's objection and entering upon an enquiry which was roving in
nature and wholly uncalled for.
J.R.Vohra v. India Export House Pvt. Ltd. & Anr., [1985] 1 SCC
172; Pukhraj Jain v. Padma Kashyap, [1990] 2 SCC 431;
SBNoronah v. Prem Kumari Khanna, (1980] 1 SCC 52 and
C
V.S.Rahi v. Ram Chambeli, [1984] 1 SCC 612, referred to.
CIVIL APPELLA1E JURISDICTION: Civil Appeal No. 4927of1991.
From the Judgment and Order dated 21.1.1989 of the Delhi High Court
in S.A.0.No. 18 of 1989.
D
Rajiv Dhawan, Akshyababu and Ms. Geetanjali Mohan for the Appel-
!ant
Awadh Behari Rohtagi, Ms. Indu Malhotra, Ms. Ayesha Khatri and Ms.
Neerja Dutta for the Respondent.
The Judgments of the Court were delivered by
THOMMEN, J. Leave granted.
The scope of section 21 * of the Delhi Rent Control Act, 1958 has been
* Section 21 reads:
" Recovery of possession in case of tenancies for limited period.-(1) Where a landlord does not
require the whole or any part of any premises for a particular period, and the landlord, after
obtaining the pennission of the Controller in the prescribed manner, lets the whole of the premises
or pan thereof as a residence for such period as may be agreed to in writing between the landlord
and the tenant and the tenant does not, on the el\ll.i!Y of the said period, vacate such premises, then,
not withstanding anything contained in Section 14 or in any other law, the Controller may, on an
application made to him in this behalf by the landlord within such time as may be prescribed, place
the landlord in vacant possession of the premises or part thereof by evicting the tenant and every
other person who may be in occupation of such premises.
(2) While making an order under sub-section (1 ), the Controller may award to the landlord
such damages for the use or occupation of the premises at such rates as he considers proper in the
circumstances of the case for the period from the date of such order till the date of actual vacation
by the tenant."
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G
H
456
SUPREME COURT REPORTS
[1991] SUPP. 3 S. C.R.
A considered by this Court in a number of decisions* .The section embodies the
legislative policy to devise a special mechanism to increase the supply of
accommodation to meet the rising demands of a growing metropolis. It
operates in limited circumstances; and, strictly within those bounds, and
subject to the vigilant enquiry of the Controller before according his permission, the parties are, once permitted to regulate their relationship in accordance
B
with the section, totally governed by the terms of their contract.
The section operates in terms thereof, notwithstanding any other law,
unless the contract itself, or the permission of the Controller is vitiated by
fraud. Absent such
vitiating circumstance, and once the Controller has
C accorded sanction, the paxties to the contract are presumed to have entered into
their relationship at arm's length and the law binds them to the terms of their
agreement.
While the Act is meant for the protection of the tenant, the legislative
policy reflected in section 21 is to carve out an area free of that protection.
D Where the conditions stipulated in section 21 are satisfied, the prohibition
contained in section 14 against eviction of tenants except on the specified
grounds or the requirements of the Transfer of Property Act or the Civil
Procedure Code or any other law are removed or dispensed with.
E
F
The section is attracted in the specific circumstances postulated by it The
absence of requirement by the landlord of the whole or any part of the premises
for a particular period, the permission of the Controller in the prescribed
manner for the lease of the premises in question, the agreement. in writing
between the landlord and the tenant for the lease of such premises as a
residence for the agreed period, the refusal of the tenant to vacate the premises
on the expiry of that period, and an application made within the prescribed time
by the landlord invoking the power of the Controller under this section: these·
are the conditions precedent to the exercise of power by the Controller to place
the landlord in vacant possession of the premises by evicting the tenant or any
G
*Shiv Chander Kapoor v. Amar Bose, [1990] l sec 234; /nder Mohan Lal v. Ramesh Khanna,
[1987] 4 SCC l; SubhashKumor Lota v. R.C.Chhibo and Another, [1988] 4 SCC 709; V.S.Rahi
andAnotherv. Smi.RamChombe/i, [1984] l SCC 612;JR.Vohro v.JndiaExportHou.se Pvt.lt.d.
and Another, (1985] l SCC 712; Yamuna·Maloo v. Anand Swarup, (1990] 3 SCC 30; Pankaj
Bhargava and Another ·v. Mohinder_Nath and An:,iher, AIR 1991SC1233; Smi. Dhanwonti v.
DD.Gupta, [1986] 3 SCC l; SB.Noronah v. Prem Kumori Khanna, [1980] 1 SCC 52 and
H
Pukhroj Jain v. Podmo Kashyap and Another, [1990] 2 sec 431.
SMT. DHA WAN v. SHAW BROS. [THOMMEN, J.]
457
other person in occupation of such premises. The person in occupation of the
A
premises has no right in law to resist eviction once the section is attracted. This
is an extraordinary power vested in the Controller to restore possession of the
premises to the landlord by a quick and summary action. The non obstante
clause contained in the section protects the action of the Controller from
challenge on any ground postulated in section 14 of the Act or any other law.
This is a wide protection of any action duly taken in terms of the section, but
B
the requirements of the section must be strictly complied with before action is
taken under it.
The order of the Controller in the circumstances warranted by the section
is a self-executing order requiring no further proceeding. It is at once a sanction
C
for the lease and for eviction on expiry of the period of. the lease. Neither can
the landlord evict the tenant during the period of the lease nor can the tenant
remain in possession beyond that period. Parties are bound by their contract,
as sanctioned by the Controller, and the provisions of section 14 are of no avail
to either party to circumvent section 21. Once the period has expired, there is
no question of any further notice to the tenant or any other person in occupation
D
of the premises and there is no scope for any further proceeding. None has any
right outside the section which operates strictly in terms thereof provided the
conditions stipulated therein are unquestionably satisfied. See JR.Vohra v.
India Export House Pvt. Ltd. & Anr., [1985) 1 SCC 712.
The only protection that the tenant has is what section 21 itself postulates. He is protected against the conduct of a fraudulent landlord. The law does
not protect either pany whose actions are tainted by fraud. A landlord seeking
recovery in terms of that section must satisfy that he has strictly complied with
the provisions of that section. The landlord must obtain the permission of the
Controller in the manner prescribed. He is not entitled to the permission unless
the condition specified for the purpose in section 21 is satisfied, namely, the
absence of his requirement of the building for a particular period. The period
must be clear and definite. The lack of requirement must be honestly felt by the
landlord. That the landlord does not require the building is a question of honest
belief held by him at the relevant time, that is, at the time of his seeking the
Controller's permission. The landlord must have honestly and reasonably
believed that he would not require the bui.lding for the period specified in his
application to the Controller for permission to let out the premises. If that belief
was truthfully held by him at the time of his application to the Controller, the
fact that subsequent events proved him wrong, and that he did not require the
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building not only for the period stated in the application, but also for a longer
_.,.._
period, or that he required it earlier than anticipated, would not make the belief
'
any less honest or valid. All that the landlord is required to state in his
application for permission of the Controller is the absence of his requirement
of the premises for the particular period, but he is not bound to state its reasons:
Inder Mohan Lal v. Ramesh Khanna, [1987] 4 SCC 1.
B
What the section postulates is the bona fide belief of an honest and
reasonable landlord, and not the reckless and casual opinion of ah irresponsible
and careless person. The question is, did the landlord make a fraudulent
P-=
representation to the Controller about the absence of his requirement of the
c
premises, i.e., knowingly that his statement was false or without belief in its
truth or recklessly careless whether it was true or false. Did the landlord
honestly believe that what he stated in his application to be a true and fair
representation of the facts? There is no fraud if what he honestly believed to
be true turned out to be false. The section does not place any higher degree of
responsibility on the landlord.
D
The section requires that the premises have to be let out solely for the
purpose of residence for the period agreed to in writing. If the agreement does
not so stipulate, the section is not attracted, and the Controller cannot sanction
the lease in terms of the section. No non-residential premises can come within
the protection of the section. On the other hand, if the premises let out as a
E
residence in terms of the section is deliberately used by the tenant for nonresidential purposes, he loses the protection of the statute for the period of the
lease and the Controller can, on an application by the landlord, evict the tenant,
or any other person in occupation, and restore possession of the premises to the
.....,,
landlord forthwith. The section protects the landlord and the tenant strictly in
terms thereof, and on the fraud or deliberate breach by either party of the terms
F
of the !ease as contemplated by the section, the protection is withdrawn from
the guilty party. This means, if the permission of the Controller has been
fraudulently obtained by the landlord, and the tenant has been let into the
premises, the landlord loses the right to seek eviction of the tenant by the
..-'
summary procedure contemplated by the section. Likewise, if the tenant has
-
deliberately-but not accidently-violated the terms of the lease by using the
G
premises otherwise than as permitted by the section, he is liable to be evicted
on an application by the landlord, although the stipulated period of the lease has
not expired. All this is because the very basis of the Controller's order has been
violated by the fundamental breach of the guilty party. The section thus
postulates that both the landlord and the tenant act honestly. Ne_ither of them
can take advantage of his own deceit or breach. No sanction of the statutory
H
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SMT. DHA WAN v. SHAW BROS. [SAHAI, J.]
459
~
authority procured by fraud can protect the guilty or harm the innocent.
A
'
Fraud is essentially a question of fact, the burden to prove which is upon
him who alleges it. He who alleges fraud must do so promptly. There is a
presumption of legality in favour of a statutory order. The Controller's order
under section 21 is presumed to be valid until proved to be vitiated by fraud or
malafide. If his order was obtained by the fraud of the party seeking it or if he
B
made a 'mindless order' in the sense of acting malafide by illegitimate exercise
of power owing to non-application of his mind to the strict requirements of the
._.,
section, then the special mechanism of the section would not operate. (See
SBNoronah v. Prem Kumari Khanna, (1980] 1 SCC 52].
My learned brother, R.M.Sahai, J. has exhaustively dealt with various
c
aspects of the questions raised in this appeal. He has eome to the conclusion
that there was no evidence of fraud or non-application of the mind of the
Controller to the essential requirements of the section, and the burden to prove
the same has not been discharged by the tenant. He has further found that the
evidence on record amply proved that the landlady honestly believed that sl'fe
D
required the premises at the end of stipulated period; that her request to the
Controller for permission in terms of section 21 was not in any manner tainted
by lack of good faith; and that the order obtained by her under section 21 was
not liable to be upset by conducting a roving enquiry and by placing th.e burden
wrongly on her to prove that she did not act dishonestly.
I agree that the statutory authorities in the present proceedings addressed
E
themselves to the wrong questions, misunderstood the guiding principle of
burden of proof, misconstrued the requirements of the section, and reached a
totally irrational, unreasonable and unsustainable conclusion that the original
order of the Controller was obtained by fraud. There was no justification on the
part of the authorities for coming to that conclusion on the basis of a belated
F
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plea and far from satisfactory or reliable evidence. The High Court was wrong
in affirming the totally unsustainable conclusion reached by the authorities.
In the. circumstances, I respectfully agree with the findings reached by
my learned brother Sahai, J.
·--.-
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R.M.SAHAI, J. Economically equally matched tenant, resisted execution, successfully, under Section 21 of Delhi Rent Control Act, (in short the
Act) by accusing landlady of fraud, misrepresentation and lies thus giving rise
to a very important issue in this landlady's appeal as to the nature and extent
of fraud which could vitiate the sanction granted under Section 21 of the Act
by the Rent Control Officer.
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SUPREME COURT REPORTS
[1991] SUPP. 3 S. C. R.
A
Short durational tenancy, a provision unique of its kind in a rent control
legislation, with a fresh look on eviction ensuring vacant possess,ionstatutorily,
after expiry of lease period 'without notice even'* or hazard of establishing
bonafide need,** due to social necessity, peculiar to Delhi, favourably inclined
towards landlord, was subjected to inherent and implied limitations by this
Court in Noronah,*** in larger social interest of fairness and justice, which perB meates our jurisprudence, to avoid any abuse of provision or arbitrary exercise
of power, by directing such sanction or permission to pass the test of being
clear of fraud or collusion. Even a mindless order was held to vitiate the
procet"Alings. And the tenant was permitted to raise the objection in execution.
Another was added to it in V.S.Rahe**** when an order on incorrect facts was
also held to be invalid. But the decision not only created misapprehension
C amongst tenants who seized upon it to raise all possible objections frivolous
and otherwise but was misunderstood by the authorities, too, who applied erroneously and tested validity of the permission on requirement on the date of
execution, or it was bad because the reason due to which sanction was obtained
did not materialise even at time of execution. At times the yardstick applied
D was of bonafide necessity as understood in Section 14 of the Act. Consequently
short term tenancy became an illusion and in a span of ten years from Noronah
(supra) there came to be rendered at least a dozen reported decisions by this
Court only. Although Noronah (supra) has, since, been substantially watered
down, in subsequent decisions, yet it still furnishes the basis for assailing the
sanction therefore it is necessary to examine, in brief, how much of it survives
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today and to what extent the law may be taken as settled.
*
For this it is worthwhile extracting the Section 21 which reads as under:-
"21. Recovery of possession in case of tenancies for limited
period.-(1) Where a landlord does not require the whole or any
part of any premises for a particular period, and the landlord; after
obtaining the permission of the controller in the prescribed manner, lets the whole of the premises or part thereof as a residence for
such period as may be agreed to in writing between the landlord
and the tenant and the tenant does not, on the expiry of the said
period, vacate such premises, then, notwithstanding anything
contained in Section 14 or in any other law, the Controller may, on
J.R.Vohra vlndiaExporl House PYt.Lld. & Anr ... [1985]1SCC172.
Shiv Chand Kapoor, [1990]1SCC234.
Pukhraj Jainv PadmaKashyap , [1990] 2 SCC 431.
***
SB.Noronahv,PremKwnari Khanna, [1980] l SCC 52.
H
**** V.S.Rahe v, Ram Chambeli, [I 984] l sec 612.
...
SMT. DHAW AN v. SHAW BROS. [SAHAI, J.]
461
an application made to him in this behalf by the landlord within
such time as may be prescribed, place the landlord in vacant
possession of the premises or part thereof by evicting the tenant
and every other person who may be in occupation of such premises."
What strikes one is, the simplicity of the ianguage and oneness of purpo~e. As
observed in Noronah (supra) the Parliament was keen on maximising accommodation available for letting, due to scarcity crisis. The objective was sought
to be achieved by simplifying the provision for letting and assuring possession
after expiry of lease. The only condition for applicability of the Section is nonrequirement of it by the landlord for short period. It is not subjected to any
restriction by requiring the landlord to disclose any reason nor whether it shall
be required thereafter for self or any family member. Othe_r conditions, namely,
passing of order, letting it for residential purpose, and entering of agreement
with tenant, are incidental only. Use of non-obstante clause further leaves no
room for doubt that the legislature intended it to operate on its own. That is why
it has been held to be a self-contained code*. Neither creation of tenancy nor
recovery of possession after expiry of period has been hedged in with any
statutory restriction or condition. However, Noronah (supra) culled out, dual
protection for tenants one substantive and other procedural by providing that
validity of sanction could be assailed on fraud etc. and the objection could be
taken in execution. But the latter, that is, procedural safeguard has been diluted
in four sub~equent decisions of Llrree Judge Bench. In Vohra (supra) warrant
of possession issued under Section 21, without service of notice, to the tenant
was upheld as after expiry of-short term tenancy the tenant had no right to
continue. However, to avoid a tenant from being completely shut out even
where the permission was obtained by 'a mere ritualistic observance of
procedure' or, 'where such permission was procured by fraud' or, 'was a result
of collusion' the court held that competing claims could be harmonised by
"insisting upon his approaching (tenant) the Rent Controller during
the currency of the limited tenancy for adjudication of his sooner
he discovers facts and circumstances that tend to vitiate ab initio
the initial grant of permission."
It was reiterated in Shiv Chand Kapoor (supra). Yamuna Maloo **narrowed it
down further when it held that;
"if the tenant has objection to raise to the validity of the limited
vacancy it has to be done prior to ~e lapse of lease and not as a
* Shiv Chand kapoor v. Amar Bose, (1991] l SCC 234.
**Yamuna Maloo v. Anand Saroop, [1990] 3 SCC 30.
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defence to the tenants application for being put in possession.