Bhupendra Singh v. State Bank of India

Sr % + ly IN THE HIGH COURT OF DELHI AT NEW DELHI ludament reserved on : 23'"^ November. 20 7 7 judgment delivered on : 12^^ December 2011 RFA(OS) 80/2011 BHUPENDERSINGH ...Appellant Through: Mr.Ajay Verma, Advocate versus STATE-BANKOF 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.PfGARG) JUDGE (I (PRADEEPNANDRAJOG) 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. * m THE HIGH COURT OF DELHI AT NEW DELHI ludament reserved on : 23''' November. 2011 % judgment 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 & connectedmatters Page1 of 12 • '" '>!. fv RFA(OS) 87/?m 1 PUSHPASINGH ...Appellant Through: Mr.AjayVerma, Advocate versus STATE BANK OF INDIA ...Respondent Through: Mr.PrashantMishra,Advocatefor Mr.S.N.Relan, Advocate } CORAM: PRADEEPNANDRAJOG 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 atenant in the respectiveportion of 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 12.8,1997underSection106 of the Transferof PropertyAct, 1882. The terminationtook effect from 5.9.1997. Appellants,Vlrendra 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 fFMoSiI& Appellants A(Ubj /y/2011&connectedmatters 2of12 terminated the respective tenancy by separate notices dated

7.10.1997 issued under Section 106 of the Transfer of Property Act, 1882. The termination took effect from 15.11.1997.

¶3Appellant, Bhupendra Singh filed Applications in September 1998 under Section of the Slum Area (Improvement & Clearance) Act, 1956 ( hereinafter referred to as the 'Slum Act') seeking permission to evict the respondent. Before the same could be decided the Bank vacated the leased premises in its possession on 02.09.1999 and thus the said application under the Slum Act became infructuous.

¶4Appellant Bhupendra Singh filed CS(OS)No.1911/2000 on the Original Side of this Court seeking recovery of ^27,95,386/- as damages alleging that occupation by the Bank for the period

05.09.1997 till 02.09.1999 in respect of 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 following issues were settled in CS(OS)No.1911/2000:

¶1At what rate the plaintiff is entitied to mesne profits in respect ofpremises referred in para 4 to 7 of the piaint?

¶2Whether piaintiff is entitied to interest? if so, at what rate, on which amount and for which period?

¶3Whether tenancy of defendant was vaiidiy terminated by the notices dated 12th August, 1997?

¶4Whether suit as framed is not maintainabie as RFA (OS) 79/2011 & connected matters alleged?

¶5Relief?

¶6In the other three suits similar issues as above were settledsaveand exceptthe dateof noticeas per IssueNo.3 was Changed to 7^^ October, 1997.

¶7Vide a commonjudgmentand 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 Nosil, 2, 4 and 5 together,the Ld. ^ Single Judge has held that notwithstandingthe fact that the tenancieswere validlyterminated,becausethe propertywas in aslum area and was governedby the Slum Act, the Respondent Bank continuedto be in possessionof the demisedpremisesas a 'tenant'since it enjoyed the protectionunder the Slum Act. The learnedSingleJudge has held that it would be a paradoxical situationthatthe Banl< could hot be evictedwithoutpermission from the competentauthorityunderthe Slum.Act and yet would be liable to pay damages if the claim of the appellantswas •accepted. Consequently,all the four suits were 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 premises in question.

¶10It is settled law that a tenancy is the result of a contract betweenthe ownerofapropertycalledthe lessorand the lessee RFA (OS) 79/2011&connectedmatters . Page4of12 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 expiryofthe lease period the tenancy expires by efflux of time and if the tenant is allowed to continue to 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 therh 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): ">4 valid termination of contractual tenancy puts an end to the contractual relationship. On determination RFA (OS) 79/2011 & connected matters Page 5 of 12. IP fontractua! tenancy] the landlord becnm^<, entitled under the law of the laZ to reZfr Promises from the tenant In due processoflawandthe tenantunderthegenerallawof theland.shardlyIn apositionto resistevZTon onfe the contractualtenancyhas been duly determined of accommodationand gradual '

¶12The Objectand purposeofaRent ControlLegislationwas iS?2,TcC ^^l^J^i^smamdVsJeemiMim:.mpara 23 It was observed:- 'SzS£z?JS/i£^^y°^'-^S. thelegitimateinterestsnfthof^i^ safeguardsof undoubtedly f^entActs Whosebenefitti^ei^entActs^Z^rZi^d"^' RFA (OS) 79/2011 &connectedmatters H I •: ! •a • V

¶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 speciai contract, wouid be, payabie, and • includes. . .

(ii) any person continuing in possession after termination of his tenancy..." ,14. It is apparent that the definition of 'tenant' in the Delhi Rent Control Act 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 question of a tenant whose tenancy has expired by efflux of time or has been otherwise validly determined as per the Transfer of Property Act, 1882 becoming a statutory tenant does notarise.

¶15The essential object of the Slum Act is entirely different. It was noted by a Full Bench of this Court in the decision reported as AIR 1972 Del 34 (FB) Bardu Ram i/. 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 dwellings until provision is made from a better five 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 1961 SC 1602 /yot/ Pershad t/. U.T nf n^thi ,.,h^.o|n it was observed;- "Obviously,iftheprotectionthatisaifordedisreadin the contextoftherestoftheAct, itisdearthatitisto enablethepoorwhohaveno otherplaceto go to, and who If they were compelled to go out would necessarilycreateotherslumsin theprocessandlive perhaps m less commodious and more unhealthy surroundingsthanthosefrom whichtheywereevicted to remainmtiieirdwellingsuntilprovisionismadefor a better life for them elsewhere...The Act, no doubt ? 1 J u-i^otfrom thepointof viewofthe landlord, his needs, the money he has suni< in the houseandthepossibleprofitthathe mightmakeifthe house were either let to other tenants or was reconstructedandletout, butratherfrom thepointof View of the^ tenants who have no alternative accommodationand who would be stranded in the _ openifan orderforevictionwerepassed."

¶17It IS becauseof the differencein the objectand purposeof the Slum Act and the Delhi Rent ControlAct that in the decision reported as AIR 1977 SC 789 Lai Chand bv i.R. ^ nr. i/5. RadhaKishan[,the SupremeCourtobservedas under:-

¶15The Slum ClearanceAct was passed, inter alia, for the protectionof tenants in slum areas from eviction.As observedby this Court in Jyoti ^ y* Ad^'^'stratorfor the Union Territory of De hi, (1962)2SCR 125 = (AIR 1961 SC 1602) the Slum ClearanceAct looks at the problem of evictionof tenantsfrom slum areas not from the point of view.of the landlord and his needs but from the point of view of tenants who have no alternativeaccommodationand who would be stranded in the open if they were evicted. The policy of the Slum ClearanceAct being that the Slum dweller should not be evicted unless alternativeaccommodationis availableto him RFA (OS) 79/2011&connectedmatters ^ j2 I , . •" 'r"'-.' i' \ ' • - • '• 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 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 highlightthat 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 himself, 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 Aaoarwa! & Ors. it was observed that the RFA (OS) 79/2011 &connectedmatters Page9 of12 H " A ' ^>7^ i^- ^J-lAJ protectionunderSection19 ofthe SlumAct is notavailableto a company, mparas33 to 35 it was observedas under-mmmm WM^m smJ, »Xssr"s ?"• rr 'S'Z'S Z S;/'"V~ ¥M%!S~SBB =-Sr~Z~~S ^nsMBc meansfloata companywhichgoesInto losses eve^n if RFa(oI)79/^7?Single judgewas earlieron Ki A(Ub) 79/2011 &connectedmatters n ,« . J ia-wwii».aiuj»uim.ji^.i-:..x... , , t-nr ii iiiiiiiiriiiiiiijii,,!!)" taken by anotherSingleJudge in tlie decision reportedas 105

(2003) DLT 422 ShyamKishore&Anr. 1/^. Rnon

¶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 becomingliable to pay damagesmay not be evictedfrom the propertyfor non-paymentofdamages,butthatwould not mean that damages cannot be recovered. The Slum Act does not regulatethe rent payableby atenantorthe chargespayablefor unauthorizeduseand occupation. Ifthe RentActdoes notapply to aslum area, rent payablewould be governedas percontract betweenthe partiesand damagesfor unauthorizedoccupation as per the general law applicable.

¶22We highlightthat under Section 37 of the Slum Act the jurisdictionof a civil Court is barredonly insofarit relatesto the ejectment of an occupier and no more.

¶23The importof the definitionof tenantunderthe 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 the appellants from the competentauthorityunderSection19 of the Slum Act RFA (OS) 79/2011 &connectedniatters .--v • yw-- • \ - .V-. y.. ^ .• r-f . 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 premisesafter tenancy was determinedand its statuswas thatof an unauthorizedoccupantand thus damages 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) No.2554/2000are restoredwithadirectionto the learnedSingle Judgeto decidethe quantumofdamages/mesneprofitspayable to the appellants. December 12, 2011 tr Rl^A (OS) 79/2011 &connectedmatters (SPTGARG) JUDGE nr-r ^ v, (PRADEEPNANDRAJOG) JUDGE