Cc
D.
V.S. RAHI AND ANR. _ - SMT.’ RAM CHAMBELI January 3, 1984- , * . [E.s. VENKATARAMIAH AND RB. Misra, JJ.) .
Delhi’ Rent Control Act, £958, (Act 59 of 1958) Section 21—-While invoking —
7 the remedial provisions of ‘Section 21. the laudllord ‘should come with clean hands a : and not SUppress or falsify facts— Doctrine of suppressioveri. will disentitle him to - ' get back posséssion later in such cases of suppression af facts— Duty of the Court—
‘Meaning of collusion— Right to resile, when avatlable-—Rule of oppression and illegal contract explained. . . . e
The respondent Smt. Ram Chambeli. leased out the suit prémises to the. "appellants for a period of three years under an order dated December 22, 1977 passed by the Additional Rent Controller in Suit No. M/798/77 under ‘section 21 of the Delhi Rent Control Act. .On the expiry of: the said period, when the respondent filed an application before the Rent Controller for possession of the premises, the appellants filed objections, highlighting how by suppression and falsifying facts the respondent resorted to the provisions of section 21 of the Rent. Act, arfd challeng-
- ed the need for personal occupation. The Additional Rent Coitroller, therefore, . after hearing both sides revoked the permission granted in 1977. However, the’
Rent Control Tribunal set aside the order of the Addl. Rent Controller and ordered eviction. The High Court in Second Appeal confirmed Tribunal’s order. Hence ‘the tenant(s appeal by Special’ Leave of the Court,
- Allowmg the appeal, the Court,
HELD: 1.’ On the facts and circumstances of the’ case, the landlady is “not entitled to invoke: the remedy-under section,21 of the Delhi Rent Control Act.
The permission under section 21 of the Act had been obtained by her on the basis . of wrong statement, but for which the permission would not have been accorded._
+These statements which were in the nature of half truths were apparently made in order to make good the plea that there was only a.temporary necessity to lease - out the building for-a short period and that there was a bonafide anticipation that there would bea pressing necessity to reoccupy the premises at the end of the period, which were the two crucial factors governing an order under section 21 of the Act.
[296 | F; E] . : * SB. Noronah y.. Prem Kumari Khanna, {1980] 1 S.C.R. 281; apPlied.
2: 1 It is true that the appellants who were the weaker. ‘of the two parties did not question the truth of-the statements made by the respondent: when the . permission was granted. But such collusion, if any, between the two unequal parties does not confer any sanctity on the transaction in question. In cases of this ‘nature itis always open to the weaker of ‘the two parties to establish that ~ the transaction was only a camouflage used to cover-its true nature. [296 H; 297 A]
ye
* ty
"4
V.S. RAHI v. RAM CHAMBELI (Verkataramiah, J.) 291°
+ ‘ . . 2:2, Collusion implies the existence of two or more partics who can deal ; with each other independently with the object of entering into an arrangement which may serve as a cloak to cover up the real state of affairs. When one party
_ can dominate over the wiil of the other, it would not be a case of collusion but one of compulsion, The above view is fully in consonance with the spirit behind the: rule of oppression which is recognised as an exception to the doctrine that a party cannot recover what he has given to the other party under an iflegal contract. The ground that the appellants cannot challenge the permission initially granted under, section 21 of the Act is not, therefore, available in this case. (297 B-C]
Smithy. Cuff (1817) 6 M, & S 160 @ 165, quoted with approval.
.
CIVIL APPELLATE TURISDICTION : Civil Appeal No.. 2809 of 1982.
From the Judgment and Order dated the 23rd August, 1982 of the Delhi High Court at New Delhi i in S.A.O. No. 277 of 1982.
B.X, Joseph and N.S. Das Bohl for the Appellant _ JM. Khanna for the Respondent. The Judgment of the Court was delivered by:
* VENKATARAMIAH; J. This is an appeal by special leave against the judgment of the High Court of Delhi@atcd August 23, 1982 in.
S.A.O. No. 277 of 1982 gismissing the appeal filed by the appellants.
The re espondent Smt. Ram Chambeli leased out the premises in question to the appellants under an order dated’ December 22, 1977 passed by the Additional Rent Controller in suit No, M/798/77 under section:21 of the Delhi Rent Control Act, 1958 (Act 59 of 1958)
(hereinafter . referred to as ‘the Act’ ), the relevant part @f which reads thus : :- .
“Statement of Smt. Ram Chambeli w/o Sh. G.L. Gandhi .
T am the owner-landlord of premises No. 637, Double Storey, New. Rajinder Nagar, New Delhi. The entire premises comprising of two rooms, kitchen, — bath,. Jaterine shown in the plan Exhibit-AJ is surplus with me for a limited period of 3 years which I want to let out to the respondent for res‘dential purposes fcr the said period at rupees 425/- p.m which is mentioned jn‘Mark B with effect from the date of | permission, I have never let out the portion to anybody
‘earlier to it. My son and my mother were living in the a ‘
_ 292° - * SUPREME COURT REPORTS " [1984] 2 s.c. R.
said premises, My mother has not been feeling well. My a son is studying in 9th ‘class. After about three years’ my. * mother will-be alright and my. son..will grow up and for them ‘1 shall require the’ premises after three years. . _
RO & AC. ” c Coo wo ARC Statement of Shri VS. Rahi, son of Sh: Thakur Gopal , ~ Singh, 45 years, teacher and Smt. Santosh’ Rahi w/o Shri- VS. Rahi, aged 45 years, teacher resident of 33/52, Prabhat Ro&d, Karol Bagh, New, Delhi, We want, the: premises - for three years for the residential purposes from the date of permission. We are -not in possession of the premises nor were we. tenants in it, - Do
‘RO & AC” | AR | ORDER | | This: order will dispose of application under Section. 21
DRC Act filed by Smt. Ram Chambeli applicant seeking permission to let out first floor of her premises No. 637
’ Double Storey, New w Rajinder Nagar, New Delhi: IJtisstated * — that the first floor f the said premises comprising of two ' living rooms, kitchen, bath and latesine detailed in plan exhibit A-1 is.surplus. with ber for a limited petiod, of thrée — *. years and she will require it after the said period of three. years. The-petitioner and respondent have made statement on oath in this connection. In view of the statement of .the ‘parties, permission u/s-21.of DRC Act is ‘granted to Smt. Ram Chambeli, wife of Shri GIL. Gandhi applicant — to let out first floor of her premises No. 637,Double - Storey, New Rajinder. Nagar, New Dethi to Shri-V.S, Rahi and Smt. Santosh Rahi respondents for residential purposes for the said period of three years with effect from the date’ of the order.
J.D: Kapoor, Add. Rent Controller”
On the expiry of the period of ihree years mentioned i jn the above order the respondent filed an application, before the Additional Rent
_ Controller for possession of the premises. The appellants filed objec- tions to the said application stating that the respondent was’ comfor-
N
°
_V.Se RAHL Y. RAM CHAMBELI 1 (enkatarania J. ). 293.
"4 tably living with her husband and son in the ground floor of the building; that she was not in need of the’ first floor, of the: building | -which had been leased: out in«their favour; that the statement that her mother was living with her was not true; that her son was studying in the 7th class in 1977 and not in the 9th class as stated by her before |’
the’ Rent Controller in’ 1977 and that the Rent Controller had permitted: the leasing out of the building under section 21 of the Act without applying his mind. It was further pleaded’ that the application had been’ filed with a view fo extracting higher rent, The appellants
‘also stated that the statement ‘of the respondent that she had not - leased out the building earlier to any body else was not true. After | going through the affidavits filed by the parties in support of their 7 cases the Additional Rent’ Controller held that the respondent..had obtained the permission under section 2) of the. Act by making - wrong statements and accardirigly revoked’ fhe said permission. Con-, sequently the appellants ‘could not be evicted under that section. Aggrieved by the order of the Additional Rerit Controller, the
"respondent filed an appeal before the Rent.Control Tribunal. The ' Tribunal allowed the appeal and directed the eviction of the ‘appellants.’ The Tribunal observed that when the Controller had ‘been informed by the responden‘sight at the time when the pér- * mission was granted under section 21 of the Act that the property was - not required by her for a period of three years but would’ be needed
“after that period for the use of her son and her mother who ‘was unwell . at that time, there was no ground to hold that the ‘transaction’ was - not genuine. The second appeal filed by the, appellants against
.the order of. the Tribunal was dismissed by the High Court. This e.
appeal by Special: Jeave is filed Against the judgment: of the “High 7
Court.
Section 21 of the Act reads .
“21. 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, ‘fets 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 dny other law, the Coritrollér * may, on an application made’ to him in this, behalf. by the "landlord within. such time as ‘may be prescribed, place the t "
. @
. (1), [1980] 1S.C.R. 281.
294 : SUPREME COURT REPORTS [1984] 2 s.c.r.
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.’
When section 21-of the Act was enacted it was believed that it would encourage landlords, who would not ordinarily be willing to lease out a building as a residénce for a short time even though ’
for such short period because of the summary remedy provided by that section to recover possessioniof the building quickly from. the tenant instead of the usual eviction proceedings which would take a long time to terminate. i
It was not perhaps fully realised at the time of the enactment:
of section 2f .of the Act that many. unscrupulous landlords would ‘enter into arrangements purporting to be ‘those under that section but in reality were ordinary leases and would utilise the threat of thé summary remedy available under that section to realise higher rents
_ they might not be in need of it during that pericd, to lease fl-out | or for any,other purpose considered to be contrary to the- benign - purposes sought to be’ ‘achieved by the Act* When one such case in which the genuineness of a transaction entered into under section 21 of the Act came before this Court in S.B. Noronah v. Prem’ Kumari |.
Khanna, Krishna’ Tyer, J. observed :
“Tt is casy to envisa ge the terrible blow to the rent contro]
law if Section 21 were freely permitted, to subvert the scheme
_ of Section 14. ‘ Every landlord will insist on a tenant going
%hrough the formal exercise gf Section 21, making ideal averments in terms of that Section.. The consequence will be that both the Civil Procedure Code which ‘prescribes
‘ suits for recovery of possession and the Delhi Rent Contro!
Act which prescribes grounds for eviction ‘will be eclipsed.
by the pervasiye operation of Section 21. , Neither grounds
_ for eviction nor suits for-eviction will thereafter be necded, and if the landlord moves the court for a mere warrant to place the landisrd, through the court process, in vacant possession of the premises, he gets it. No court-fée, no . decree, no execution petition, no termination of tenancy- _ wish for possession and the court is at- your command. Such a horrendous situation will be the negation of the rule - of law in this area. So it is that we deem it necessaty to
V.S. RAHI V. RAM CHAMBEL{ (Venkataramiah, J) 295
_ lay down the law as implied in: Section 21. . Whea an: application under Section 21 is filed by the landlord and/or tenant, the Controller must satisfy himself, by such inquiry as he may make’ about the. ‘compulsive ‘Te- quiremeits of that provision,” If-he makes a mindless order, the Court, when challenged at the time of execution, will go into the question as to whether the twin conditions ‘for Sanction have really been fulfilled.’ ™
The appe eal before us has to be . considered ‘against the above . background. co ve .
_Itis “urged by the appéllants that the order . passed under section 21 of the Act in this case having .béen obtained .cn’ the basis of statements which were. wrong, the applicaticn for eviction should be dismissed. m, a
While’ it is true that the Court should.. proceed: with the initial presumption that the order-under section 21 of the. Act was a regular one, the Court should still examine the ‘material placed befcre it by the. tenant inducted under that provision in order to satisfy itself that there has not been any misuse of the said provision by the landlord taking advantage of the helpless situation in which the tenant was,
. placed. at. the t time when such order was obtained.
_In the instant case ‘it. 18 seen n that there weie three wrong state-
"ments made by the respondent. when she appreached the Additional
Rent Controller scekitig permission under | secticn:-21 of the Act to lease out the property. First, it is- not true that the’ building had not been leased out earlier, Now it is adiitted ‘before us that there was oné Kataria occupying the * building as a ‘tenant on a monthly rent, of Rs. '100/- oniy and he had vacated the same about four or
, five months before the, date on which the order wasmade under section
‘21 while it is. true that he had been there as@ tenant even before the
_ respondent purchased the building in the year 1972. After he vacated * the building, it was leased out to the appellants ona - rent of Rs. 425/- per mensem.: Secondly, it is admitted that the’ respondent’s mother was not living with her. Itis now admitted before us that the woman who is moré than 75° years old described as the mother of the respondent*in the statement of the respondent recorded by the Additional . Rent Controller when permission was given under seclicn. 21-is the | sister of the respondent's father although | in the course of the pro-.
é
‘on x a
296. SUPREME COURT REPORTS... [1984] 2s.cx.
ceedings before: the Additional Rent Controller out of which this’.
appeal arises, she was described as the adoptive mother of the res- - pondent, It-is now stated that she is the foster mother of the respondent and that she came with. the respondent to the residence of her husband after her marriage. It is stated that she was svffering from ' cataract in her eyes; that it was not ripe for being treated in 1977 when the order was passed ‘under section "21 of the Act and that: it was expscted that after the cataract was removed she would need the - ~ building in the occupation of the appellants which is equal in size -
-to thd ground floor in the occupation of the respondent. Thirdly; ~ the son of the respondent was an .young boy studying in the seventh class in 1977 and not-in the ninth class. From the foregoing it is obvious that the respondent had suppressed that ‘there was a tenant _ in the building who had vacated: only a few months before the date of the application under section 21 of the Act; had made false statement
‘about the relationship with her so-called foster mother; had not disclosed the nature of her sickness which was’ expected to be cured in three years; had stated that her son was studying in the ninth class to make it appear that he would be sufficiently old at the end of the — period of three years and that he would be iri need of extra accommoda- tion.. These statements which were in the nature of half-truths were ~ apparently made in order to make good the plea that there was only a temporary: necessity to lease out the building for a short pericd and that the respondent bona fide anticipated that there. would be a pressing:necessity to reoccupy the premises at the end of the pericd which are the two crucial factors governing an order under’ secticn 21, of the Act. The reasons given in this case are .quite unconvincing.
“We are not satisfied that the respondent honestly believed when she — applied -for permission under section 21 of the-Act that she would’
be in need of the premises in question at the end of the stipulated period. Ona consideration of the material before him, the Additional
Rent Controller‘was right in holding that.the permission under section 21 of the Act had been obtained by the respondent ori the basis of wrong statements but for which the permission would not: have been accorded. e
‘tt is, however, urged that the appellants who had colluded with the respondent’ when permission was granted under section 21 of the -
_ Act should not-be now allowed to resile from the stand they had taken then.. It is true that the appellants who were the weaker of the two parties did not question the truth of the statements made by the respondent when the permission was granted. But such collusion,’
if any, between the two unequal Parties does not confer any sanctity’
“A.
r4
V.S. RAHI VY. RAM CHAMBELI (Venkataramiah, JY -. 297
+ on the transaction in question. In cases of this nature it is always open to the weaker of the two parties to establish that the transaction was only a camouflage used to cover its true nature. Collusion implies the existence of #¥o or more parties who can deal with each other independently with the object of entering into an arrangement which.
. may serve as a cloak to cover up the real state of affairs. When’
one party can dominate over the will of the other, it would not be a case of collusion but one of compulsion. The above view is fully in consonance with the spirit behind the rule of- oppression which is
- recognised as.an exception to the doctrine that a party cannot recover , what he has given to the. other party under an illegal contract. ‘Tt
" can never be predicated as pari delicto where one holds the rod and the other bows to it’. (Per Lord Ellenborough in ‘Smith v. Cuff (1817) 6 M & S 160 at 165), Cases which call for appropriate relief
_ to be given to an innocent party where ‘one has the power to dictate, the other has no alternative but to submit are not uncommon. Cheshire and Fifoot’s Law: of Contract (10th Edn.) referes to another type of © case belonging to this category. At page 338 of that treatise is the
\* following passage > -
’ ,
‘Another type of:case where the parties are not regarded as equally delictual is where the contract is rendered illegal by-a statute, the objeét of which is to protect one class of persons from the machinations of another class, as for example where it forbids.a landlord to take a premium froma prospec- —
' tive tenant. Here, the duty of observing the law is placed *, Squarely upon the shoulders of the Jandlord, and the protected person, the tenant, may recover an illegal premium in an action for money had and received, even if the statute: omits to afford him this remedy either exp ressly or by implication. In the words of Lord Mansfield : . Where contracts or. transactions are prohibited - ‘by positive statutes, for the sake of protecting one set of ‘men from another set of men; the one from their situation and’ condition being liable to be oppressed and imposed upon by the other; there the parties are not in pari delicto; and in furtherance of these statutes, " person injured after the transaction is finished and com: — the pleted, may bring his action and defeat the contract.” ;
.
* . .
The ground that the appellants cannot challenge the permission
“4 298 —— 7 SUPREME COURT REPORTS - (1984) 2s.0.R.
ro:
initially granted under section 21 of the Act is not therefore, available in this case:
The Tribunal and the High Court have appretiched the ‘present,
- ease in a mechanical way and have failed to apply correctly the ratio ‘of the decision in Noronah’s case to the facts before thein. ‘We are © - of the view ‘that on the facts and in the.circumstances. of the case the responcent is not.entitled to invoke.the remedy under section 2] of the
' Act: to. recover possession. of the premises,.
_ In the result, the judgments of the High Court, “and of the Tribunal ; are set aside and the application filed by the respondent under section 2] of the Act for recovery of the premises is dismissed.
”
The appeal is. accordingly ‘allowed with costs '
SR, | | : a 2 . Appeal allowed. ®