Pushpa 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) 82/2011 PUSHPASINGH ...Appellant Through: Mr.Ajay Verma, Advocate versus STATE BANK OF INDIA ...Respondent Through: Mr.Prashant Mishra, Advocate for Mr.S.N.Reian, 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^ARG) JUDGE (PRADEEP NANDRAJOG) JUDGE December 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. * IN 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, Advpcate 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 & connected matters % RFA(OS) 87/?mi PUSHPASINGH ...Appellant Through: Mr.AjayVerma, Advocate versus STATE BANK OF INDIA ...Respondent Through. Mr.PrashantMishra,Advocatefor Mr.S.N.Relan, Advocate CORAM: HON'BLE MR. JUSTICE PRADEEP NANDRAIOG HON-BLE MR. JUSTICES.P.GARG S.P.GARG. I. 1-Appellantsin thesefourappealsare membersofthe same familywho own differentportionsof propertybearingNo.1822/1 and 1822/2ChandniChowk, Delhi 110006. All ofthem 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 tenancy by a noticedated 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 area admeasuring 427 sq.ft.to the Bank.The lastagreed rent with respectto each i ^ Appellants A(Ub)/y/2011&connectedmatters Page2of.12 •,r .C ' terminatedthe respectivetenancy by separate notices dated

7.10.1997issued underSection106 of the Transferof Property Act, 1882. The terminationtook 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 Act') seeking permissionto evict the respondent. Beforethe same could be decidedthe Bank vacatedthe leased premises in its possession on 02.09.1999 and thus the said applicationunderthe Slum Act becameinfructuous.

¶4AppellantBhupendraSingh filed CS(OS)No.1911/2000on the OriginalSide of this Courtseeking recoveryof ^27,95,386/- as damagesallegingthatoccupationby the Bank for 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 ?4,39,404/- on the same ground. Pendente lite and future interest was prayed to be awarded.

¶5The followingissueswere settledin CS(OS)No.1911/2000:

¶1At what rate the plaintiffis entitied to mesne profitsmrespectofpremisesreferredin para 4 to 7 ofthepiamt?

¶2Whetherpiaintiffis entitiedto interest?ifso at whatrate, on whichamountandfor whichperiod?

¶3Whetiier tenancy of defendant was vaiidiy terminatedby the noticesdated12thAugust,1997?

¶4Whethersuit as framed is not maintainableas RFA (OS) 79/2011&connectedmatters alleged?

¶5Relief? 6: In the other three suits similar issues as above were settledsaveand exceptthedateof noticeas perIssueNo.3 was changed to October, 1997.

¶7Vide acommonjudgmentand decreedated May 5, 2011, the learned SingleJudge decided Issue IMo.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 aslum area and was governedby the SlumAct, the Respondent Banl<continuedto be in possessionofthe demisedpremisesas a tenant'since it enjoyedthe protectionunder the Slum Act, The learnedSingleJudgehas heldthatit would be aparadoxical situationthatthe Bankcould not be evictedwithoutpermission from the competentauthorityunderthe Slum Actand yet would be liable to pay damages if the claim of the appellantswas accepted, Consequendy,all the foursuitsweredismissed. 9-Admittedly, 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 question.

¶10It is settled law that a tenancy is the result of a contract betweentheownerofapropertycalledthe lessorand the lessee RFA (OS) 79/2011&connectedmatters Page4of12 rt whereunder the lessor agrees that for an agreed rent the lessee shall enjoy the possession of the property. The relationship betweenthe lessorand 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 continueto occupythe 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 pertainingto the user being commercial, in the absenceof 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 obligations between the lessor and the lessee as per the lease deed or as per the terms of the oral lease. Thus, notwithstanding the contractual tenancy 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 i/. Parashram. in the following words (para 11): "/I valid termination of contractual tenancy puts an end to the contractual relationship. On determination R-FA (OS) 79/2011 & connected matters a the landlord becomes entitled under the law of the land to recover possessionof the premisesfrom the tenantin due under the general law of thelandIS hardlymapositionto resisteviction once the contractualtenancyhas been duly determZd hlnh gradual f ^^nous factSrs the un^tff^Tn^^ situationfor Personalgams to the serious detrimentof the helpless tenants. Under the circumstancesit profit 'Tlegislature to interveneto exDinitafinnh against harassment and I^n:^ f ^ 5i/a/7CT0t/5landlordsand appropriate legislationcame to bepassed.. " ^pnare

¶12The objectand purposeof aRent Control Legislationwas ighl.ghtedby the Supreme Court in the decision reportedas 1985 (2)see683 GianDeviAnand ^3 It was observed;- whichareindeedin thenatureofsocial ISS, oftheiandiordl'"rheR^ntA^lel^^^^^ fJ'-''ip°SS%SSSiSSS'Jt?Z-'SZ iandinr/i I. interests of the tppea^ ofthe variousRentActs Justice bv affnr%n^'^^' promotesocial RFA (OS) 79/2011 &connectedmatters

¶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 (!) "tenant" means any person by whom or on whose account or behalf the rent ofany premises is, or, but for a special contract, would be, payable, and includes. . .

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

¶14It is apparent that the definition of 'tenant' in the Delhi Rent ControlAct incorporates the concept of a statutory tenant. But since the Delhi Rent Control Act is not applicable to tenancies where the monthly rent payable is in excess of ?3,500/-,the questionof a tenantwhosetenancyhas expiredby efflux of time or has been otherwisevalidly determinedas per the Transferof PropertyAct, 1882 becominga statutorytenant does not arise.

¶15The essential object ofthe Slum Act is entirely different. It was noted by a Full Bench ofthis Court in the decisionreported as AIR 1972 Del 34 (FB) Bardu Ram v. Ram Chander It was observed:- 'An essential object of the Slum Areas Act is to enable the poor, who have no other place to go to and who, if they were evicted to remain in their dwellingsuntil provision is made from a better live for them elsewhere.."

¶16For holding as aforesaid,reliance was placed by the Full Bench on the decision of the Supreme Court .reported as AIR RFA (OS) 79/2011 & connected matters )l^ thecontextofthefesfoftheAct % in enabiethepoorwI^o^^'l't's dearthatitisto ^ho if they ^ere colZZ^TnV'' "^t:essarilycreateothers^urntin ^ perhaps in less commodiousand surroundingstiianthose^fZ^ a•f unhealthy to remainin theirdwellingsuZn'nr - evicted 3betterlife for them eisewh^rf looksat the problemnot " doubt, landlord, his needc: th of view of the house were either /et l^^^SMmai^eifthe reconstructedandietout butStl' view of the tenants 'wh^h P°'ntof accommodationand who would hZ T ^'^^''"^tive open ifan order for evirt-inn stranded in the '«rfAriK, " iil'a,for tlfi"^roStio^''ofpn 'iter from eviction.As observpd '1^ Pershad v. Adminisfraf-nrf L Jvoti of Delhi, (1962)2SCR ]2S ^'^/aid Territory the Slum'Clea'anceTtlLl evictionoftenants from Problem of point of view of the landlord from the point of view ff ^ alternativeaccommodatinn IJ "o stranded in the ooen If fh^ ^ policy of the Slum Qpp^rin ^ evicted. The slum dweller rou7d S h» '"9 alternativeacGommodflt-inn• ^^^'''^ted unless RFA (OS) 79/2011&connectedmatters a^'ailable:to him, rr 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 34 (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 decisionsreferredto above clearlybring out that the purposeof the Slum Act is to protectthe occupiersof properties in slum areas irrespectivewhetherthey were tenantsor not and relevantwould it be to highlightthat the Slum Act only defines an occupierand 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 relevantwould it be to highlightthat as per Section 19, while granting or declining permission the relevant criteria is the meansofthe occupier If the occupierhas no meansto relocate himself, permission for ejectment has not to be granted inasmuch as it would be presumed that upon ejectmentthe occupier would create a further slum. It is well settled that protection under Section 19 would be available to a person, whetherhe is a tenantor an occupierwho is poorand is unable to arrange for alternative accommodation.

¶19In the decisionreportedas 71 (1978) DLT 318 DimplePvt. Ltd. Vs. Harsh KaurApoarwa!&Or<;. it was observedthat the RFA (OS) 79/2011 & connectedmatters rs'. protectionunderSection19 of the Slum Act is not availableto a company. In paras 33 to 35 it was observedas under:- LearnedCounselforrespondentNo. 1, Mr. Ishwar Sahai,on the otherhandhasarguedthatthepetitioner company are a jurisdiction. They are not a natural person. Thus the protectionmeant for the evictionof poor tenants from their respective accommodations cannotbemadeavailabieto thepetitioner,ifindmyself 'res7ondfntZT^"'

¶34Admittedlythe petitionersare a company. Thus • Company is formed when certainpersonsjam hands with a view to carryingon somecommercialorindustrialundertaking.Thus7tcan sJZfL / have got cannothirnn^h '^'J^iness.ACompany cannotbe run bypoorpersonswithno financialmeans to run the same. The objectand the purposefyr the "cTearZceiArt (Implement Jr t the slums and to Provideprotectionto poortenantsagainstharassment ^nrn ^ oflandlordswho bringforwardandInitiate proceedmgs for their e vlctlon...

¶35/ am also temptedto cite the observationsofa SingleJudgeofthis Courtas reportedin BismillaJan v SlumAct was enacted for givina ' H tenants who have small means and cannot afford to get alternate accommodationoutside the slum area or with% the mTafsZatfrn'°^P'^°iP-rsons^ithsublntiti fj^eansfloata companywhichgoesInto losses even If theyare evictedfrom thepremises,theycannotZate slums, particularlywhen the same personsown other concernswhichalsohaveofficesat differentplaces". WA(0«79™n SingleJudgewas earlieron A(Ub) 7;/2011&connectedmatters .p^g^jq j2 n.' 1S~ ;r taken by anotherSingleJudge in the decisionreportedas 105

(2003) DLT422 ShyamK/shnrr&Anr. 1/t. Rr^nnSamP

¶21The view is incorrectfor the reason it ignoresthe law on the subjectthat the conceptof a contractualtenancy is only applicablewherethe RentControlLegislationso envisagesand that ejectmentof an occupierof apropertyin aslum area, be the occupieratenantor otherwiseis entirelydifferentthan the issue of payment of damages for unauthorized use and occupation. A person occupying a slum property upon becoming liable to pay damagesmay not be evictedfrom the propertyfor non-paymentofdamages,butthatwould not mean that damages cannot be recovered. The Slum Act does not regulatethe rentpayableby atenantorthe chargespayablefor unauthorizeduseand occupation.Ifthe RentActdoesnotapply to aslum area, rentpayablewould be governedas percontract betweenthe partiesand damagesfor unauthorizedoccupation as per the general faw applicable.

¶22We highlightthat under Section 37 of the Slum Act the jurisdictionofacivi| Courtis barredonly insofarit relatesto the ejectmentof an occupierand no more.

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

¶24Besides,in the facts of the instantcase it has to be noted thatthe bankfrustratedthe permissionsoughtby theappellants rom the competentauthorityunderSection19 of the Slum Act RFA (OS) 79./2011&;connectedmatters : . V- ' K by voluntarily surrenderingpossession. Obviously, the said applicationbecameinfructuousat tiiatstage.

¶25The respondentState Banl< 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 thus damages have to be paid.

26., The appealsare accordinglyallowed. ImpugnedJudgment and decreedated05,05.2011is setaside,CS(OS)No,1911/2011 CS(OS) Mo.2552/2000, CS(OS) No.:2553/2000 and CS(OS)' No.2554/2000are restoredwithadirectionto the learnedSingle J dgeto decidethe quantumofdamages/mesneprofitspayable to the appellants. December 12, 2011 tr Rl-A (OS) 79/2011 &connectedmatters (S.P.GARG) JUDGE "i-T' r'v<^i\AycId • (PRADEEPNANDRAJOG) JUDGE