Dinesh Tulshidas Sheth and another v. Hemchandra Ganpat Desai and others
1998-10-08
P.S.PATANKAR
body1998
DigiLaw.ai
JUDGMENT - P.S. PATANKAR, J.:---The question involved in this second appeal is whether the agreement dated 11th May, 1975 can be said to be void in view of section 23 of the Contract Act. 2. The premises are two rooms situated at Alibag. They are covered by the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereafter referred to as the Bombay Rent Act). They were owned by one Laxmibai Rajaram Velhal etc. and the respondents were staying in those rooms since 1968 as licensees. On 11th May, 1975, an agreement took place between the owners of the property i.e. the appellants herein and the respondents in respect of those two rooms under which it was agreed that they shall stay in the premises till the end of February, 1976 free and vacate thereafter. This property was purchased by the appellants on 15th May, 1975. They issued notice to the respondents on 1st March, 1976 to give back the possession to them in view of the agreement dated 11th May, 1975. As the respondents did not, the appellants filed the suit claiming possession of those two rooms and damages for unauthorised use and occupation from March, 1976. It was contended that in view of the agreement dated 11th May, 1975 they are bound to vacate and are trespassers after 1-3-1976. It was contended by the respondents, inter alia, that the said agreement dated 11th May, 1975 was hit by the provisions of section 23 of the Contract Act as it is against public policy and having the effect of defeating the provisions of law, it is void and the suit filed by the appellants on that basis is liable to be dismissed. It has been found by both the courts below that the said agreement dated 11th May, 1975 was void and hence the appellants cannot get possession from the respondents. 3. It is first to be noted that it was found by the Appellate Court that respondents were licensees since 1968 on payment of Rs. 50/- per month. They became tenants of the same on 1-2-1973 in view of section 15-A of the Bombay Rents, Hotel Lodging House Rates Control Act, 1947 Act.
3. It is first to be noted that it was found by the Appellate Court that respondents were licensees since 1968 on payment of Rs. 50/- per month. They became tenants of the same on 1-2-1973 in view of section 15-A of the Bombay Rents, Hotel Lodging House Rates Control Act, 1947 Act. Further, the contention raised on behalf of the respondents that the said agreement was entered into because of undue influence, coercion and fraud came to be negatived holding that it was without giving any details. 4. I must state at the outset that the learned Counsel for the respondents attempted to impeach the said agreement dated 11th May, 1975 also on the ground that it was brought into existence because of undue influence, coercion and fraud committed by the appellants by filing cross objections. He has taken me through the written statement. However, I find that the finding recorded by the Appellate Court that no details of the said allegations of undue influence, coercion and fraud are given in the written statement is right. It was a general and vague plea devoid of particulars of each. The whole attempt was to show that a criminal prosecution was launched by Velhals against them and Panchnama was made. Therefore, they entered into such an agreement. However, admittedly, no process was issued in the said complaint and the plea of undue influence, fraud or coercion was vague and baseless. The Appellate Court has appreciated the evidence in this respect and rightly rejected this contention. There is no merit in the cross objections. 5. The learned Counsel for the appellants submitted that a tenant is free to surrender his rights and there is no prohibition under the Bombay Rent Act. He invited my attention to sections 18 and 19 of the Bombay Rent Act and contended that the prohibition under section 18 is regarding recovery of unlawful charges by landlord in violation and under section 19 for recovering any charges by the tenant from landlord while relinquishing the tenancy of the premises. Hence, the finding recorded by the Appellate Court that the agreement was against public policy or having the effect of defeating the provisions of law is not correct. This is countered by the learned Counsel appearing for the respondents. 6.
Hence, the finding recorded by the Appellate Court that the agreement was against public policy or having the effect of defeating the provisions of law is not correct. This is countered by the learned Counsel appearing for the respondents. 6. The agreement dated 11th May, 1975 mentions as under :-- "But now since you No. 1 has decided to sell the said property to Nos. 4 5 and since we have made request to you all, you have given the above mentioned two rooms towards the South to No. 1 out of us for staying till the end of February 1976 only for the sake of convenience. This arrangement is made only for the purpose of convenience and at our request neither No. 1 or any one of us has got tenancy in respect of the said two room. Excepting the said two rooms, either No. 1 or any one out of us is concerned with the other open land or any part of it in any way and we will not make use of it. By the end of February 1976, No. 1 out of us and we will vacate the premises i.e. the above mentioned two rooms without any complaint and hand over the possession to No. 4 5 from amongst you. We will not put forth any complaint." The appellants are contending that the respondents have unequivocally agreed to vacate the premises by the end of February, 1976. By the said agreement they were allowed to stay which was by way of concession and hence after that date they were trespassers and cannot claim the protection of the provisions of the Bombay Rent Act. 7. The learned Counsel in support of this contention relied upon the judgment of the Supreme Court reported in A.I.R. 1963 S.C. 97 (V. Narasimharaju v. V.V. Gurumurthy Raju and others)1. It was a case where the question arose whether the agreement in respect of arbitration was void as the consideration for the same was withdrawal of prosecution. In para 18, the Supreme Court observed as under :-- "(18) Then again Cl. 5 of the agreement corroborates the appellant's case that the withdrawal and non-prosecution of the criminal complaint was a consideration for the arbitration agreement. That is why the arbitrator was authorised to decide as to who and in what manner are to bear the expenses incurred in criminal proceedings.
5 of the agreement corroborates the appellant's case that the withdrawal and non-prosecution of the criminal complaint was a consideration for the arbitration agreement. That is why the arbitrator was authorised to decide as to who and in what manner are to bear the expenses incurred in criminal proceedings. The intimate connection of the criminal proceedings and their withdrawal with the arbitration agreement is thus clearly established. That is another factor which supports the appellant's case." It was held that the arbitration agreement was therefore invalid under section 23 of the Contract Act as being opposed to public policy. He has relied upon A.I.R. 1967 Kerala 51 (Narayana Pillai Parameswaran Pillai and others v. Kudamaloor Regional Service Co-operative Society Ltd. and others)2, and upon A.I.R. 1969 Madras 15 (Logannathan Minor and others v. Ponnuswami Naicker and others)3. These are also cases relating to dropping of prosecution or stifling possession and it was held that the agreements for stifling prosecution are well known classes of agreements which the Court refuses to interfere as falling under section 23 and the said section is based on principle that no one shall trade on felony. The learned Counsel for appellants submits that the present agreement was entered into in consideration of respondents staying gratuitously till the end of February 1976 and hence it cannot be called as opposed to public policy. It is not possible to accept this. I shall point out subsequently how it is having the effect of defeating the provisions of Bombay Rent Act, and against public policy. 8. He next relied upon the judgment of the Apex Court reported in A.I.R. 1971 S.C. 2213 (Lachoo Mal v. Radhye Shyam)4. In the said case, the question arose whether the landlord can waive his right which is conferred upon him under the provisions of U.P. (Temporary) Control of Rent and Eviction Act, 1947 and in that context it was held that the landlord can waive the exemption benefit available for constructions made after 1-1-1951 and the agreement between landlord and tenant in that respect is neither illegal nor unlawful nor defeating provisions of law within the meaning of section 23 of the Contract Act. In fact, the Apex Court considered this judgment in details in A.I.R. 1974 S.C. 1924 (Murlidhar Aggarwal and others v. Ram Agyan Singh)5, while considering from tenant's angle. I shall be making a reference to it later on.
In fact, the Apex Court considered this judgment in details in A.I.R. 1974 S.C. 1924 (Murlidhar Aggarwal and others v. Ram Agyan Singh)5, while considering from tenant's angle. I shall be making a reference to it later on. 9. The learned Counsel for the appellants is right in pointing out that the learned Judge has erroneously relied upon the principles of tenancy by holding over under section 116 of the T.P. Act, but that is not going to help the appellants in getting possession of the suit premises. But that makes no difference. 10. The Bombay Rent Act, was introduced clearly with the object of protecting the eviction of tenants by the landlord without following the procedure and the provisions of the said Act. Sections 12 and 13 thereof lay down various provisions under which the landlord can secure possession of the tenanted premises from the tenant. Section 28 deals with the jurisdiction of the courts in that respect. If the said agreement dated 11th May, 1975 is held to be valid, then the protection which is afforded to a tenant under the provisions of the Bombay Rent Act, would be taken away and the eviction would be clearly de hors the provisions thereof. Therefore, merely because a tenant agrees that he shall stay in the premises until the end of a particular period, this would not entitle the landlord to recover premises on that basis. If this is permitted, then the provisions of the Bombay Rent Act, would be defeated with immunity and this welfare legislation meant for the benefit of the tenants can reduce to zero. It is true that a tenant covered by Bombay Rent Act, can surrender and voluntarily give up possession of the premises and there is no prohibition for it in Bombay Rent Act. But the landlord cannot claim possession on the ground that a tenant has agreed to surrender the possession. There is implied prohibition to claim possession on that ground in view of sections 12 and 13 of Bombay Rent Act. 11. The learned Counsel for the respondents has relied upon the judgment of the Apex Court reported in A.I.R. 1974 S.C. 741 (Nagindas Ramdas v. Dalpatram Iccharam alias Brijram and others)6.
There is implied prohibition to claim possession on that ground in view of sections 12 and 13 of Bombay Rent Act. 11. The learned Counsel for the respondents has relied upon the judgment of the Apex Court reported in A.I.R. 1974 S.C. 741 (Nagindas Ramdas v. Dalpatram Iccharam alias Brijram and others)6. In the said case the provisions of the Bombay Rent Act, were for consideration and the Apex Court held that unless the Court is satisfied about existence of statutory ground for eviction, no decree can be passed merely on the ground of compromise between the parties. I may quote what the Apex Court has to say -- "16. It will thus be seen that the Delhi Rent Act, and the Madras Rent Act, expressly forbid the Rent Court or the Tribunal from passing a decree or order of eviction on a ground which is not any of the grounds mentioned in the relevant sections of those statutes. Nevertheless, such a prohibitory mandate to the Rent Court that it shall not travel beyond the statutory grounds mentioned in sections 12 and 13, and to the parties that they shall not contract out of those statutory grounds is inherent in the public policy built into the statute (Bombay Rent Act). 17. In Rasiklal Chunilal's case, 1971(12) Guj.L.R. 1012 (supra), a Division Bench of the Gujarat High Court has taken the view that in spite of the fact that there is no express provision in the Bombay Rent Act prohibiting contracting out, such a prohibition would have to be read by implication consistently with the public policy underlying this welfare measure. If we may say so with respect this is a correct approach to the problem. 18. Construing the provisions of sections 12, 13 and 28 of the Bombay Rent Act, in the light of the public policy which permeates the entire scheme and structure of the Act, there is no escape from the conclusion that the Rent Act under this Act is not competent to pass a decree for possession either invitum or with the consent of the parties on a ground which is de hors the Act or ultra vires the Act. The existence of one of the statutory grounds mentioned in sections 12 and 13 is a sine qua non to the exercise of jurisdiction by the Rent Court under those provisions.
The existence of one of the statutory grounds mentioned in sections 12 and 13 is a sine qua non to the exercise of jurisdiction by the Rent Court under those provisions. Even parties cannot by their consent confer such jurisdiction on the Rent Court to do something which, according to the legislative mandate, it could not do." (underlining mine) Similarly, the Apex Court in A.I.R. 1974 S.C. 1924 considered its own judgment in Lachoo Mal's case (cited supra). The matter was for consideration before the Apex Court from the tenant's angle under the provisions of U.P. (Temporary) Control of Rent and Eviction Act, 1947. Section 3 thereof provided that no suit can be filed by the landlord without the permission obtained under the said provision. In the said case, agreement to lease provided that party shall not claim benefit of the said Act and the provisions of the said Act, will be inapplicable to the said lease. In that context, question arose whether the tenant is precluded from contending that the suit for eviction without permission under section 3 is not maintainable. The Supreme Court considered the provisions of section 23 of the Contract Act and came to the conclusion that there can be no such provision in the lease deed. The Apex Court distinguished Lachoo Mal's case and held that such agreement would be against the public policy and hit by section 23 of the Contract Act. The Apex Court observed: "23 In that case this Court was considering the question whether it was open to a landlord to waive the benefit of a provision enacted for the benefit of landlords under the Rent Control Act. This Court said that if a provision is enacted for the benefit of a person or class of persons, there was nothing which precludes him or them from contracting to waive the benefit, provided that no question of public policy was involved." "27. There can be no doubt about the policy of the law, namely, the protection of a weaker class in the community from harassment of frivolous suits. But the question is, is there a public policy behind it which precludes a tenant from waiving it ?". "33. We think that section 3 is based on public policy.
There can be no doubt about the policy of the law, namely, the protection of a weaker class in the community from harassment of frivolous suits. But the question is, is there a public policy behind it which precludes a tenant from waiving it ?". "33. We think that section 3 is based on public policy. As we said, it is intended to protect a weaker section of the community with a view to ultimately protecting the interest of the community in general by creating equality of bargaining power. Although the section is primarily intended for the protection of tenants only, that protection is based on public policy. The respondent could not have waived the benefit of the provision." Therefore, in my opinion, the conclusion drawn by the Court below that the agreement dated 11th May, 1975 was against public policy and would have the effect of defeating the provisions of the Bombay Rent Act, was right. It has been rightly held that it is hit by section 23 of the Contract Act and void and the appellants cannot claim possession of the suit premises on that basis. The conclusions drawn by both the courts below are right. 12. Hence, the appeal is dismissed. Cross objections filed by respondents also dismissed. In the facts and circumstances of the case, there shall be no order as to costs. Appeal dismissed.