Case Note & Summary
The dispute arose between a landlord and tenant over premises in Baroda, governed by the Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947. The tenant occupied the premises at a monthly rent of Rs. 70. The landlord served a notice dated December 1, 1956, alleging non-payment of rent since October 1, 1955, and demanding possession. The tenant replied on December 7, 1956, claiming payment up to April 1, 1956, and asserting a right to credit for Rs. 200 spent on electric installation with the landlord's consent, and also contended that the rent was excessive. On January 5, 1957, the tenant moved the Civil Judge under Section 11(1) of the Act for fixation of standard rent and under Section 11(3) for specification of interim rent. He deposited Rs. 500 in court on January 8, 1956 (as per text, likely 1957). The landlord instituted an ejectment suit on January 27, 1957, on grounds of non-payment of rent. The Civil Judge ordered the tenant to deposit arrears at Rs. 51 per month within 15 days, which the tenant substantially complied with. The two proceedings were amalgamated. On March 28, 1958, the trial court fixed the standard rent at Rs. 50 per month and dismissed the ejectment suit, holding that the tenant was ready and willing to pay the standard rent within the meaning of Section 12 of the Act. On appeal, the District Court fixed the standard rent at Rs. 70 per month but confirmed the dismissal of the ejectment suit, finding that the tenant had complied with the order to deposit interim rent and had proved readiness and willingness to pay the standard rent. The landlord filed a revision petition before the High Court of Gujarat under Section 115 CPC. The High Court reversed the District Court and ordered eviction, holding that the tenant was not ready and willing to pay the standard rent, had not deposited the standard rent at the enhanced rate fixed by the District Court, had not paid the interim rent at the rate fixed by the trial court, and had not paid costs of the suit. The tenant appealed to the Supreme Court by special leave. The Supreme Court examined the provisions of the Act. It held that Section 12(1) protects a tenant who continues in occupation after determination of the contractual tenancy, provided he pays or is ready and willing to pay the standard rent and permitted increases and observes other conditions. This protection is subject to Section 13 and the limitations in Sections 12(2) and 12(3)(a). The court observed that the expression 'may' in Section 12(3)(a) has mandatory content, and if the conditions are fulfilled, the court is bound to pass an ejectment decree. Regarding Section 12(3)(b), the court held that the power to fix standard rent is exercisable under Section 11(1) alone, and the tenant must pay or tender the standard rent fixed by the court and permitted increases on or before the first day of hearing or such other date as the court may fix. If the standard rent is enhanced in appeal, the appeal court may fix a date for payment of the difference. The Explanation to Section 12 creates a rule of evidence: if the tenant regularly pays or tenders the interim rent specified by the court till disposal of the suit, the court is bound to presume readiness and willingness at the date of the decree. The standard rent in Section 12(3)(b) is not to be equated with interim rent under Section 11(3). On the facts, the District Court should have fixed a date for payment of the difference between the standard rent due and the amount deposited, but this omission was only technical. The Supreme Court further held that the High Court, in exercise of power under Section 115 CPC, had no authority to set aside the order of the District Court merely because it considered the judgment assailable on an error of fact or even of law. The High Court could exercise its power only if the subordinate court acted without jurisdiction, failed to exercise jurisdiction, or acted with material illegality or irregularity. The High Court's reversal of the District Court's finding was therefore beyond its revisional jurisdiction. The Supreme Court allowed the appeal, set aside the High Court's order, and restored the District Court's decree, subject to the direction that the District Court should fix a date for payment of the difference in standard rent as required by Section 12(3)(b).
Headnote
A) Rent Control - Statutory Tenancy Protection - Section 12(1) Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947 - Tenant who remains in occupation after determination of contractual tenancy is entitled to protection from eviction so long as he pays or is ready and willing to pay standard rent and permitted increases and observes other conditions of tenancy consistent with the Act - Held that this protection is subject to Section 13 and limitations in Sections 12(2) and 12(3)(a) (Paras Not mentioned). B) Rent Control - Eviction Grounds - Section 12(3)(a) Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947 - The expression 'may' in Section 12(3)(a) has mandatory content; if conditions of the clause are fulfilled, the court is bound to pass a decree in ejectment against the tenant - Held following Bhaiya Punyalal Bhagwandin v. Bhagwat Prasad, [1963] 3 S.C.R. 312 (Paras Not mentioned). C) Rent Control - Standard Rent and Interim Rent - Sections 11(1), 11(3), 12(3)(b), Explanation to Section 12 Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947 - Power to fix standard rent is exercisable under Section 11(1) alone; tenant must pay or tender standard rent fixed by court and permitted increases on or before first day of hearing or other date fixed by court; if standard rent is enhanced in appeal, appeal court may fix date for payment of difference - Held that Explanation erects rule of evidence; presumption of readiness arises if interim rent regularly tendered; standard rent not equated with interim rent (Paras Not mentioned). D) Civil Procedure - Revisional Jurisdiction - Section 115 Code of Civil Procedure, 1908 - High Court cannot set aside subordinate court order merely because it is assailable on ground of error of fact or even of law; power exercisable only if subordinate court acted without jurisdiction, failed to exercise jurisdiction, or acted with material illegality or irregularity - Held that High Court exceeded its jurisdiction in reversing District Court's finding on readiness and willingness (Paras Not mentioned). E) Rent Control - Appeal Court's Duty - Section 12(3)(b) Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947 - When standard rent enhanced in appeal, appeal court ought to fix date for payment of difference; failure to do so is technical error - Held that District Court erred technically by not fixing date, but error did not justify High Court's interference under Section 115 CPC (Paras Not mentioned).
Issue of Consideration
Whether the tenant was ready and willing to pay standard rent and entitled to protection from eviction under Sections 12(1) and 12(3)(b) of the Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947; whether the High Court could reverse the District Court's finding under Section 115 CPC
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's order, and restored the District Court's decree, subject to the direction that the District Court should fix a date for payment of the difference in standard rent as required by Section 12(3)(b).
Law Points
- Section 12(1) protects tenants who continue in occupation after contractual tenancy is determined
- Section 12(3)(a) uses 'may' with mandatory content
- Section 12(3)(b) requires payment or tender of standard rent fixed by court
- Explanation to Section 12 creates evidentiary presumption of readiness and willingness if interim rent regularly tendered
- standard rent and interim rent are not equated
- High Court under Section 115 CPC can interfere only on jurisdictional errors or material illegality
