Beopari Benefit Chit Fund Co. vs Ganpat Rai And Ors.
1972 Latest Caselaw 35 Del

JUDGMENT

B.C. Misra, J.

(1) The question involved in this revision is whether a suit for recovery of arrears of rent at the contractual rate should be stayed during the pendency of a petition for fixation of standard rent filed by the tenant before the Controller. The revision came up for hearing before one of us who, in view of an authority of this Court in Malik Girdhari Lal vs. Parshotam Dass, Civil Revision No. 416-D of 1965 decided by Tatachari, J. on 28th of May, 1971(1) has referred it to a Division Bench.

(2) The material facts of the case are that the petitioners in this revision are tenants of the respondents on a rent of Rs. 150.00 per month and on 31st May, 1965, they filed a petition under section 9 of the Delhi Rent Control Act 59 of 1958 (hereinafter referred to as the Act) for fixation of stan

(3) In support of the revision, the learned counsel for the petitioners has mainly relied on the decision of Tatachari, J. in Malik Girdhari Lal's case(1) where his lordship, following two authorities of the High Court of Madhya Bharat and one of the High Court of Hyderabad, namely, Dulhanmal Rizumal vs. Abdul Kadar, Air 1950 Madhya Bharat 8(2), Manji Lal vs. Prem Chand, Air 1951 Madhya Bharat l05(3) and Vishnu Dass vs. Dr. Krishan Kumar, Air 1953 Hyderabad 144(4),heldthatinview of sections 4 and 5 of the Act, the landlord was not entitled to recover any amount in excess of the standard rent of the premises and since the Civil Court had no jurisdiction to determine the standard rent, which could be determined only by the Controller being the special Tribunal created under the Act, the suit for recovery of arrears of rent should be stayed under section 151 of the Code of Civil Procedure till the determination of the standard rent. The learned counsel has submitted that under the circumstances of the case, the suit ought to have been stayed by the Subordinte Judge and the decision of the Supreme Court in M.M. Chawla vs. J.S. Sethi, (1969) 1 Rent Control Reporter 861(5), relied upon by the Court below, was distinguishable on the facts and circumstances of the case.

(4) The Rent Act is a piece of ameliorative legislation, the object 'of which is to restrict the increase of rent and protect the tenants against the harassment byeviction consequent on the shortage of accommodation. The scheme of the Act is that section 14 thereof prohibits eviction except on the grounds specified in the provisos to the section. So far as standard rent is concerned, section 6 of the Act prescribes the definition of and section 9 provides the machinery for fixation of standard rent and it specifies the factors to be taken into consideration in determining it. Section 10 of the Act gives jurisdiction to the Controller to fix an interim rent. Section 12 provides the limitation for moving applications for fixation of standard rent, whether by the tenant or the landlord and section 13 makes a provision for refund of the amounts paid in excess of the standard rent or payments of those amounts like premium which are prohibited by the statute. Section 5 bars the recovery of unlawful charges and section 4 provides that no tenant shall, notwithstanding any agreement to the contrary be liable to pay to his landlord any amount in excess of the standard rent of the premises and that any agreement for payment of rent in excess of standard rent shall be construed as if it were an agreement for payment of the standard rent only. Section 50 of the Act inter alia provides that the Civil Court will have no jurisdiction in respect of eviction of tenants and fixation of standard rent which the Controllers have been empowered to decide under the Act.

(5) The argument advanced on behalf of the tenant-petitioners is that every property will be deemed to have a standard rent in accordance with the principles mentioned in sections 2(k), 6 and 9 of the Act and, therefore, every tenant would be required to pay, and the landlord would be entitled to recover, only the said amount of standard rent and payment in excess of it has been declared to be unlawful and since the Civil Court cannot determine the standard rent, it should be required to stay the suit for recovery of arrears of rent at the contractual rate, otherwise the result of the decree would be to compel payment of amount in excess of the standard rent which has been or may be fixed by the Controller.

(6) The Supreme Court in M.M. Chawla's case (supra)(5) had an occasion to consider the problem and the argument pressed before the Court that the standard rent had been defined by sections 2(k) and 6 of the Act and sections 4 and 5 had the effect of reforming the contract of tenancy for payment of rent and substitute the standard rent for the contractual rent and so the landlord was not entitled to recover the contractual rent. The Court negatived the contention and observed as follows :- "COUNSELsays that by virtue of the provisions of sections 4 and 5 recovery of rent by a landlord in excess of the standard rent is prohibited. But in our judgment the prohibition in sections 4 and 5 operates only after the standard rent of premises is determined and not till then. So long as the standard rent is not determined by the Controller, the tenant must pay the contractual rent: after the standard rent is determined the landlord becomes disentitled to recover an amount in excess of the standard rent from the date on which the determination operates.

(7) We are unable to agree that standard rent of a given tenement is by the virtue of section 6 of the Act a fixed quantity, and the liability for payment of a tenent is circumscribed thereby even if the standard rent is not fixed by order of the Controller. Under the scheme of the Act standard rent of a given tenement is that amount only which the Controller determines. Until the standard rent is fixed by the Controller contract between the landlord and the tenant determines the liability of the tenant to payment. That is clear from the terms of section 9 of the Act. That section clearly indicates that the Controller alone has .the power to fix the standard rent, and it cannot be determined out of Court. An attempt by the parties to determine by agreement the standard rent out of Court is not binding. By section 12 in an application for fixation of standard of premises the Controller may give retrospective operation to his adjudication for a period not exceeding one year before the date of the application. The scheme of the Act is entirely inconsistent with standard rent being determined otherwise than by order of the Controller. In our view, the prohibition against recovery of rent in excess of the standard rent applies only from the date on which the standard rent is determined byorder of the Controller and not before that date."

(8) It is, therefore, obvious that the rule of law laid down by the Supreme Court is that the rights of the parties remain governed by the terms of the contract and the tenant remains liable to pay the rent at the contractual rate unless and until the standard rent is in fact determined by the Controller according to the provisions of law. There is, therefore, no scope for any conception of a notional rent being substituted by the parties in place of the contractual rent and then invite the prohibition contained in section 4. The Supreme Court has very clearly laid down that the prohibition does not apply unless and until the standard rent has been fixed by an order of the Controller and it becomes effective from the date it operates and not earlier.

(9) This judgment of the Supreme Court had not been brought to the notice of the learned Single Judge who decided the case of Malik Girdhari Lal (supra).(1) In view of the decision of the Supreme Court, it is not necessary to consider the correctness of the authorities relied upon the learned Single Judge. As a result, the petitioner-tenants would be legally liable to pay all arrears of rent at the contractual rate and the decree of the civil Court would, in the absence of an order of the Controller in fact fixing the standard rent, be legal and valid and the contractual rent cannot be said to be fluid or contingent.

(10) The learned counsel for the petitioners has lastly submitted that assuming that the decree of the civil Court would be lawful and binding, there was a good and sufficient ground for stay of the suit when proceedings for fixation of standard rent, which had been initiated earlier, were pending. In our opinion, this contention has no force. It was open to the party who had filed a petition under section 9 of the Act for fixation of standard rent to obtain from the Controller an order under section 10 of the Act fixing an interim rent of the premises pending determination of the standard rent which could be passed after the filing of the petition as expeditiously as possible. This order for interim rent would be binding on the parties and would reform their payable rate of rent unless and until the application was finally disposed of by the Controller under section 9. It is admitted that the petitioners did not obtain any order fixing the interim rent in this case. Again, after the standard rent has been finally fixed by an order under section 9, the Controller is required to fix a date with effect from which the standard rent would be effective which would be not more than one year earlier than the date of filing of the petition and section 13 of the Act contains a provision for refund of the amount of rent and premium etc. by adjustment from the rent or otherwise, which may be in excess of the standard rent or be not recoverable under the Act. This provision provides ample protection to the tenants against any excessive or unlawful recovery of the rent. Consequently, the passing of the decree by the civil Court against the tenant will not prejudice his rights or interests and if and when the standard rent is determined and comes into operation, section 13 and other provisions of law would safeguard the interests of the tenant and would ensure the refund of the amount realised by the landlord in excess of the standard rent fixed according to law. As a result, we do not find any cogent reason for not proceeding with the suit for recovery of arrears of rent as the two proceedings run an independent course in separate jurisdictions.

(11) The provisions for stay of the suit is contained in section 10 of the Code of Civil Procedure, but the same is not applicable to such circumstance as has been held by this Court in Malik Girdhari Lal's case.(1) So far as section 151 is concerned, the trial Court undoubtedly possesses a jurisdiction to stay the suit in the interests of justice on good and sufficient cause. That is a matter for the discretion of the Court of first instance and the same is to be exercised in accordance with well established principles of law, but in a circumstance like the facts of the present case, there can be no good ground for exercise of such discretion in favor of stay. The reason is that the law provides ample safeguards for working out the rights of the parties following upon the order of the Controller determining the standard rent, but if the suit be stayed, the amount of arrears of rent which, it is under section 26 the legal duty of the tenant to pay month by month, may accumulate and the landlord would be deprived of the same at least for a considerable time without any valid reason. In Krishan Kumar vs. Lala Ram Sarup Khanna, 1966 Delhi Law Times 608(6), Justice S.B. Capoor came to the same conclusion as we have done and he held that a suit for recovery of arrears of rent can be proceeded with even during the pendency of an application for fixation of standard rent, which proceedings will not be a valid ground for stay of a suit for recovery of rent in civil Court. Our conclusion therefore, is that we do not subscribe to view that a suit for recovery of arrears of rent should be stayed during the pendency of a petition for fixation of standard rent either under section 10 or under section 151 of the Cods of Civil Procedure.

(12) As a result, the revision fails and is dismissed, but under the circumstances of the case, the parties are left to bear their respective costs.