Rajendra Singh v. State Bank of India

* IN THE HIGH COURT OF DELHI AT NEW DELHI ludament reserved on : 23''^ November. 2011 % ludament delivered on : 12'^^ December. 2011 + RFA(OS) 81/2011 RAJENDRASINGH ...Appellant Through: Mr.Ajay Verma, Advocate versus STATE BANK OF INDIA ...Respondent Through: Mr.Prashant Mishra, Advocate for Mr.S.N.Relan, Advocate CORAM: HON'BLE MR. JUSTICE PRADEEP NANDRAJOG HON'BLE MR. JUSTICE S.P.GARG S.P.GARG. I. For orders, see RFA(OS) 79/2011. (S^.GARG) JUDGE —TT" Q( (PRADEEP NANDRAJOG) JUDGE Decennber 12, 2011 tr Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. 5" * m THE HIGH COURT OF DELHI AT NEW DELHI ludament reserved on : 23'"' November, 2011 % ludament delivered on : 12^'' December. 2011 + RFA(OS) 79/2011 VIRENDERSINGH ...Appellant Through: Mr.Ajay Verma, Advocate versus STATE BANK OF INDIA ...Respondent Through: Mr.Prashant Mishra, Advocate for Mr.S.N.Relan, Advocate RFA(OS) 80/2011 BHUPENDERSINGH ...Appellant Through: Mr.Ajay Verma, Advocate versus STATE BANK OF INDIA ...Respondent Through: Mr.Prashant Mishra, Advocate for Mr.S.N.Relan, Advocate RFA(OS) 81/2011 RAJENDRASINGH ...Appellant Through: Mr.Ajay Verma, Advocate versus STATE BANK OF INDIA ...Respondent Through; Mr.Prashant Mishra, Advocate for Mr.S.N.Relan, Advocate RFA (OS) 79/2011 &comiectedmatters Page1of12 w* a-'- RFA(QS) 82/2011 PUSHPASINGH ...Appellant Through: Mr.AjayVerma, Advocate versus STATE BANK OF INDIA ...Respondent Through. Mr.PrashantMishra,Advocatefor Mr.S.N.Relan, Advocate CORAM: wnM.pf'n PRADEEPIMAIMDRAJOG HON BLE MR. JUSTICE S.P.GARG S.P.GARG. I.

¶1Appellantsin thesefourappealsare membersofthe same familywho own differentportionsof propertybearingNo.1822/1 and 1822/2ChandniChowk, Delhi 110006. All of them inducted State Bank of India as atenantin the respectiveportionof the property owned by them. "

¶2BhupendraSingh, the appellantin RFA(OS) 80/2011,had let out an area admeasuring1820 sq.ftand 315.84sq.ft. to the Bank. The last agreed rent with respect to the tenanted premiseswas ^50,050/-per month. Said Appellantterminated the tenancyby anoticedated 12.8.1997underSection 106 of the Transferof PropertyAct, 1882. The terminationtook effect from 5.9.1997. Appellants,Virendra Singh, Pushpa Singh and Rajendra Singh, who have filed RFA(OS) No.79/2011,81/2011 and 82/2011respectively,had each letoutan areaadmeasuring 427 sq.ft.to the Bank.The lastagreedrentwith respectto each Ssr79/20ir&c«rnattL'^ APPeNants Page 2 of12 ;#S terminatedthe respectivetenancy by separate notices dated 7,10.1997issued underSection106 of the Transferof Property Act, 1882.The terminationtool< effectfrom 15.11.1997.

¶3Appellant, Bhupendra Singh filed Applications in September 1998 under Section 19 of the Slum Area (Improvement&Clearance)Act, 1956 (hereinafterreferredto as the 'Slum Acf) seel<ing permissionto evict the respondent. Beforethe same could be decidedthe Bank vacatedthe leased premises in its possession on 02.09.1999and thus the said applicationunderthe Slum Act becameinfructuous.

¶4AppellantBhupendraSingh filed CS(OS)No.l911/2000on the OriginalSide of this Courtseekingrecoveryof ?27,95,386/- as damagesallegingthatoccupationby the Bankfor the period

05.09.1997till 02.09.1999in respectof the portion let out by him was unauthorized. For the same period, the other three appellants filed three suits praying for damages in sum of ?4,39404/- on the same ground. Pendente lite and future interest was prayed to be awarded.

¶5The followingissuesweresettledin CS(OS)No.l911/2000: the plaintiff is entitled to mesne o7th!piaTntr' P^ra4to 7

¶2Whetiierplaintiffis entitledto interest?ifso at whatrate, on whichamountandforwhichperiod? 3 Whether tenancy of defendant was validiv terminatedby the noticesdated12thAugust,1997?

¶4Whethersuit as framed is not maintainableas RFA (OS) 79/2011&connectedmatters Page3of12 .g-alleged? •

¶5Relief?

¶6In the other three suits similar issues as above were settledsaveand exceptthe dateof noticeas per Issue No.3 was changed to 7^^ October, 1997.

¶7Vide acommonjudgmentand decreedated May 5, 2011, the learned Single judge decided Issue No.3 in favour of the Appellants/Landlords,and held that the notices validly terminated the tenancy.

¶8But, answeringIssue Nos.l, 2, 4and 5together,the Ld. Single Judge has held that notwithstandingthe fact that the tenancieswere validlyterminated,becausethe propertywas in aslumarea and was governedby the SlumAct, the Respondent Bank continuedto be in possessionofthe demisedpremisesas a 'tenant'since it enjoyedthe protectionunder the Slum Act The learnedSingleJudgehas heldthatit would beaparadoxical Situationthatthe Bank could not be evictedwithoutpermission from the competentauthorityunderthe SlumActand yetwould be hable to pay damages if the claim of the appellantswas accepted. Consequently,all the foursuitswere dismissed

¶9Admittedly, each of the tenancies between the parties were With respect to rent payable by the Bank in excess of 3,500/-per month and thus the Delhi Rent Control Act 1958 was not applicableto the premisesin questfen. 10^ It is settledlaw thatatenancyis the resultofacontract etweentheownerofapropertycalledthe lessorand the lessee RFA (OS) 79/2011 &connectedmatters , 'V--- • • • • •: ••• • whereunder the lessor agrees that for an agreed rent the lessee shall enjoy the possession of the property. The relationship between the lessor and the lessee is governed by the Transfer of PropertyAct, 1882. Thus, upon expiryof the lease periodthe tenancy expires by efflux of time and if the tenant is allowed to continue to occupy the tenanted premises at an agreed rent and money is received by the lessor from the lessee as rent and is tendered by the lessee to the lessor as rent, a fresh tenancy comes into being and pertaining to the user being commercial, in the absence of a registeredlease agreement,the tenancyis from month to month and is determinable by a notice contemplated by the Transfer of Property Act, 1882.

¶11But, various countrieshad passed legislations,especially after the second World War on account of paucity of accommodation, to protect the possession of tenants and these Rent Control Legislations' superseded the contractual obligationsbetween the lessor and the lessee as per the lease deed or as per the terms of the oral lease. Thus, notwithstandingthe contractualtenancy being terminated, the tenants could not be evicted and were given the label of 'Statutory Tenants' i.e. the statute conferred upon them the status of a tenant. The law to said effect was very clearly enunciated by the Supreme Court in the decision reported as,

(1976) 4 see 855 Damadilal v. Parashram. in the following words (para 11): ' M valid terminationof contractual tenancy puts an end to the contractual relationship. On determination RFA (OS) 79/2011 & connected matters Page 5 of12 \ r;." W, •' r o the landlord becomes entitled under the law of the land to recover possession of the premisesfrom the tenant in due general law of the landIS hardymapositionto resisteviction,once - Because%< t^"^ncyhas been duly determined. Because of scarcityofaccommodationand gradual high nse m the rents due to various factors the landlordsweremapositionto exploitthesituationfor "the'hllr'f"''t^-^eriou!TetZentof the helpless tenants. Under the circumstancesit protect 'V to i -i. i.- tenants against harassment and f avariciousiandiordsand appropriate legislationcameto bepassed..." ^pnace

¶12The objectand purposeof aRent Control Legislationwas ghlighted by the SupremeCourt in the decision reportedas ,n para 23 It was observed:- mmm '^hosebenefittheRentActs^ssMyp!^!^' RFA (OS) 79/201] &connectedmatters Page 6 of12

¶13In the context of the Delhi Rent Control Act, 1958, the word Tenant' is defined in clause (ii) of Section 2(1) of the Act, as follows: "2.(I)"tenant" means any person by whom or on whoseaccount orbehalfthe rent ofanypremises is, or, but for a speciai contract,. wouid be, payabie, and • includes . .

(ii) any person continuing in possession after termination of his tenancy..."

¶14It is apparent that the definitionof 'tenant' in the Delhi Rent ControlAct incorporatesthe conceptof a statutorytenant. But since the Delhi Rent Control Act is not applicable to tenancies where the monthly rent payable is in excess of ^3,500/-,the questionofatenantwhosetenancyhas expiredby efflux of time or has been otherwisevalidlydeterminedas per the Transferof PropertyAct, 1882 becominga statutorytenant does not arise.

¶15The essentialobjectofthe Slum Act is entirelydifferent. It was noted by a Full Bench of this Court in the decisionreported as AIR 1972 Del 34 (FB) Bardu Ram v. Ram Chaniic^r |t was observed:- 'An essentialobjectoftheSlumAreasActisto enable thepoor, who haveno otherplacetogo toand who if they were evictedto remain in their dwellingsuntil provision is made from a better five for them elsewhere."

¶16For holding as aforesaid,reliancewas placed by the Full Bench on the decision of the Supreme Courtreported as AIR RFA (OS) 79/2011 & connectedmatters ; . •' ..v f I V 1961 SC 1602 Jyot! Pershad v. UT nf nmhi n observed:- "Obviously,iftheprotectiontiiatisaffordedis readin eLuTth'' f 'sto "hn ,f Otherpiecetogo to, and ITf?^ ^ compelled to go out would perhaps m less commodious and more unhealthy surroundingthanthosefromwhichtheywereevicted n/ZTf^'^rf untiiprovisionis madefor a betteriife for them elsewhere...The Act, no doubt fandlnrJh- "f ^hepointofviewofthe landlord, his needs, the money he has sunk in the houseandthepossibleprofitthathemightmal<eifthe house were either let to other tenants or was reconstructedandletout, butratherfrom thepointof view of the tenants who have no alternative accommodationand who would be strandedIn the n-7 ?h - V. orderforevictionwerepassed."

¶17it ,5 becauseof the differencein the objectand purposeof the Slum Act and the Delhi Rent ControlAct that In the decision reportedas AIR 1977 SC 789 Lai Chand bv! R. ^ Ks. Radha Kishan',the SupremeCourtobservedas under:-

¶15The Slum ClearanceAct was passed, Inter aha, for the protectionof tenants in slum areas from eviction As observed by this Court in Jyoti nf n it Union Terrlto^ of De hi, (1962)2SCR 125 =(AIR 1961SC1602) the Slum ClearanceAct looks at the problem of evictionoftenants from slum areas hotfrom the point of view of the landlord and his needs but from the point of view of tenants who have no alternative accommodationand who would be Stranded in the open if they were evicted. The policy of the Slum ClearanceAct being that the s um dweller should not be evicted unless alternativeaccommodationis availableto him RFA (OS) 79/2011&connectedmatters Page8of12 we are of the view that the word 'tenant' which occurs in Section 19 (l)(a) must for the purpose of advancing the remedy provided by the statute be construed to include a person against whom a decree or order for eviction has been passed. We might mention that a Full Bench of the Delhi High Court in Bardu Ram Dhanna Ram v. Ram Chander Khibru, AIR 1972 Delhi

(FB) has taken the same view, namely, that the word 'tenant' in Section 19 of the Slum Clearance Act includes a person against whom a decree or order of eviction has been passed."

¶18The decisions referred to above clearly bring out that the purpose of the Slum Act is to protect the occupiers of properties in slum areas irrespective whether they were tenants or not and relevant would it be to highlight that the Slum Act only defines an occupier and does not define a tenant. The object of the Slum Act is to protect the occupiers from eviction unless permission is obtained from the competent authority and relevant would it be to highlight that as per Section 19, while granting or declining' permission the relevant criteria is the means of the occupier. If the occupier has no means to relocate hjmself, permission for ejectment has not to be granted inasmuch as it would be presumed that upon ejectment the occupier would create a further slum. It is well settled that protection under Section 19 would be available to a person, whether he is a tenant or an occupier who is poor and is unable to arrange for alternative accommodation.

¶19In the decision reported as 71 (1978) DLT 318 Dimple Pvt. Ltd. 1/5. Harsh Kaur Aaaarwal & Ors. it was observed that the RFA(OS) 79/2011 & connectedmatters Page9 of 12 r r ^ I protection under Section 19 of the Slum Act is not available to a company, in paras 33 to 35 it was observed as under:- "33. Learned Counsel for respondent No. 1, Mr Ishwar Sahai, on the other hand has argued that the petitioner company are a jurisdiction. They are not a natural person. Thus the protection meant for the eviction of poor tenants from their respective accommodations cannotbe made avaliableto thepetitioner,i findmyself in perfect agreement with the learned Counsel for respondent No. 1.

¶34Admittedlythe petitionersare a company. Thus they are a Juristic person.A Company is formed when certainpersonsjoin hands with a view to carryingon some commercial or industrial undertaking. Thus it can naturallybe formed by those persons who have got sufficientfunds to carryon theirbusiness.A Company cannot be run by poor persons with no financial means to run the same. The object and the purpose for the enactment of the Slum Areas (Improvement & Clearance)Act^1956 was to dear the slums and to provide protection to poor tenants against harassment at the hands oflandlords who bring forward and initiate proceedings for their e viction...

¶35/ am also tempted, to cite the observations of a SingleJudge ofthis Courtas reported/>? Bismi11a Jan v. Jain Tractors&Auto Spare,1985RajdhaniLawReporter 477, (para13) "TheSlumAct was enactedforgiving protection to poor individual tenants who have small means and cannot afford to get alternate accommodation outside the slum area or within the slum if evicted, if a couple of persons with substantial means float a company which goes into losses, even if they are evicted from the premises, they cannot create slums, particularly when the same persons own other concerns whichalso have offices at different places".

¶20The view taken by the learned SingleJudge was earlier on RFA (OS) 79/2011&connectedmatters Page10 of12 • • - . . '-•V n ^^eSS: mf: tlfSEFSti-3-S'e*7JiT5ip^ 15-taken by anotherSingleJudge in the decision reportedas 105

(2003) DLT 422 Shyam Kishore&Ann Vs. RnopSaree Kpndm

¶21The view is incorrectfor the reason it ignoresthe law on the subjectthat the concept of a contractualtenancy is only applicablewherethe Rent Control Legislationso envisagesand that ejectmentof an occupierof a propertyin a slum area, be the occupiera tenantor otherwiseis entirelydifferentthan the issue of payment of damages for unauthorized use and occupation. A person occupying a slum property upon becoming liable to pay damages may not be evicted from the propertyfor non-paymentofdamages, but that would not mean that damages cannot be recovered. The Slum Act does not regulatethe rent payableby atenantor the chargespayablefor unauthorizeduse and occupation. Ifthe RentAct does not apply to a slum area, rent payablewould be governedas per contract betweenthe partiesand damagesfor unauthorizedoccupation as per the general law applicable.

¶22We highlightthat under Section 37 of the Slum Act the jurisdictionofa civil Court is barred only insofarit relatesto the ''ejectment of an occupier and no more.

¶23The importofthe definitionoftenant under the Delhi Rent Control Act in the Slum Act by the learned Single judge is accordingly contrary to law.

¶24Besides, in the facts of the instant case it has to be noted thatthe bankfrustratedthe permissionsoughtby the appellants from the competent authority under Section 19 of the Slum Act RFA (OS) 79/2011 & connected matters C by voluntarilysurrenderingpossession. Obviously, the said applicationbecameinfructuousat thatStage.

¶25The respondentState Bank of India is the largest bank having thousandsof branchesall overthe country. The object of the Slum Act could never be to protectsuch giant juristic entitiesto claimprotectionundertheAct. Itcontinuedto occupy the tenanted premises after tenancy was determinedand its statuswas thatofan unauthorizedoccupantand thusdamages have to be paid.

¶26The appealsare accordinglyallowed. Impugnedjudgment and decreedated05.05.2011is setaside.CS(OS)No.1911/2011, CS(OS) No.2552/2000, CS(OS) No.2553/2000 and .CS(OS) IMo.2554/2000are restoredwithadirectionto the learnedSingle Judgeto decidethe quantumofdamages/mesneprofitspayable to the appellants. Deceniber 12, 2011 tr RFA (OS) 79/2011 &connectedmatters (S.P.GARG) JUDGE T-r-rv^KAvc (PRADEEPNANDRAJOG) JUDGE 'y. .! i \ • . ;?V-