Jai Singh Rana vs Mohinder Mohan Goel
1994 Latest Caselaw 675 Del

JUDGMENT

M. Jagannadha Rao, C.J.

(1) The appellant who was a lessee of premises and against whom an eviction petition under Delhi Rent Control Act is pending, is the plaintiff in the Suit No. 2438 of 1993. The suit was filed in 1993 for specific performance of an alleged agreement of sale dated 12.1.1992 said to have been executed by the defendant-respondent. Pending suit, the appellant sought for an injunction under order 39 Rule 1 Civil Procedure Code praying that the defendant may be restrained from parting with possession of the property or from selling or creating any third party interest. An ex parte order of temporary injunction was granted on 1.11.93 and, upon an application by the defendant under Order 39 Rule 3 Cpc, the learned Single Judge, by a reasoned order dated 18.8.94 vacated the interim order and observed: "THERE will be no bar to the Additional Rent Controller to decide the matter in accordance with the law without taking note of proceedings of this Court."

(2) The facts of the case, as appear from the order of the learned Single Judge, are that the respondent who is a retired government servant has filed an eviction petition against the petitioner-lessee before the Additional Rent Controller on the ground of his bona fide need for self occupation, after his retirement from service. While the eviction petition is still pending, the tenant filed the present suit in 1993 claiming to have come into possession of the property, upon alleged cessation of the tenancy dated 10.11.1988, under the alleged agreement of sale for Rs. 15 lakhs. He also claimed that he had paid Rs. 2 lakhs to the landlord and said he was willing to pay the balance of Rs. 13 lakhs. He also contended that the defendant-landlord, ignoring the agreement dated 12.1.92, had issued a notice on 9.6.93 claiming arrears of rent and possession. He contended that he(plaintiff) issued a reply contending that there was no question of any rent being paid or of any eviction and that in fact, no rent was claimed for 18 months from 12.1.92 (date of alleged agreement of sale and the date of the defendant's notice dated 9.6.93 and this was because of the agreement of sale. In the suit, the plaintiff filed the application under Order 39 Rule 1 for restraining the defendant from alienating the property or parting with possession in favor of others. Temporary injunction was granted ex parte on 1.11.93 and was vacated on 18.8.94 by the learned single Judge observing that the landlord had claimed that the agreement of sale was a forged document, that the landlord wanted possession after his retirement from government service and filed a Rent Control case for eviction and the same was pending. The landlord got Rs. 2.38 lakhs from his Provident fund and had no need to sell the house, the receipt for part payment of Rs. 2 lakhs to the landlord as sale consideration was not filed, that the property was under mortgage, that the tenant had not filed the alleged agreement of sale saying he had lost it and was trying to trace it. The learned Judge also observed that the Rent Control case could go on independently of the suit and need not be stayed.

(3) In this appeal, learned counsel for the plaintiff contends that if the rent control case is allowed to go on the suit will become infructuous and has to be stayed under Section 151 Civil Procedure Code in the interests of justice. He relies upon the alleged agreement of sale and the pendency of the suit for specific performance. Till the suit is decided, the rent control case should not be allowed to go on. The landlord cannot be allowed to alienate or part with possession. The case is Vinod Industries Pvt. Ltd. vs. Saroj Kumari 51(1993) Dlt is relied upon.

(4) There is sometimes one class of cases in disputes between landlords and tenants wherein a tenant sets up an agreement of sale in his favor by the landlord either during the pendency of the rent control petition for eviction or even after losing the rent control case. In such situations if the tenant files a civil suit for specific performance of the disputed agreement of sale and seeks for permanent injunction against the landlord, a question might arise whether, pending disposal of the suit for specific performance, the Rent Control case or the execution proceedings can be allowed to go on or have to be stayed by the High Court pending disposal of the suit for specific performance. The tenant could argue that if the rent control case is decided earlier than the suit, he (the tenant) may have to suffer eviction though, he may ultimately succeed in the suit. He may also contend that he cannot be compelled to convert the suit for specific performance and permanent injunction into one for specific performance and possession. Eviction, pending suit, would itself be hardship, according to him.

(5) It might appear to be just that a tenant should not be allowed to be evicted under an order of the Rent Controller pending a suit for specific performance and permanent injunction and it may be said that this would cause serious hardship to tenants. In our opinion, there can be no such generalisation or presumption.

(6) We feel that the following approach would be reasonable: (1)In every suit for specific performance and permanent injunction, if an interlocutory application is filed under Order 39 Rule 1 Civil Procedure Code for temporary injunction or for stay of the Rent Control case it will be necessary for the concerned Court to decide whether the tenant who is the petitioner in such an application has made out a prima facie case and whether the balance of convenience lies in staying the Rent (2) If indeed there is prima facie proof of the genueness of the agreement of sale, the Court could consider the question of stay of the Rent Control caw on merits. Even assuming that the Court came to the conclusion that a prima facie case was made out in favor of the tenant, the balance of convenience might not lie in granting stay of the Rent Control case. In such cases, the Court may even allow the rent control case to be decided and judgment and, decree pronounced but grant stay to the execution thereof, allowing the parties to complete the appeal against Rent Controller's decision or even the further appeal/revision as the case may be so that the whole exercise need not be commenced after the disposal of the civil suit for specific performance. (3)If,on the other hand, the tenant does not make out a prima facie case in regard to the genuineness of the agreement set up by him, there will, in our view, be absolutely no justification for interfering with the rent control proceedings. It all depends on how far the tenant has established the prima facie case about the genuineness of the agreement of sale setup by him. (4) If indeed the eviction is not stayed and the tenant is evicted and later the suit for specific performance and possession succeeds, there can be no difficulty in executing the decree in the civil suit and putting back the tenant-purchaser, in possession, after properly adjusting their rights'.

(7) In our view, the aforesaid procedure would certainly meet the ends of justice and would be a fair and reasonable procedure. Apart from that. we cannot ignore the fact that in several cases tenants who have no reasonable defense or chances of success in a Rent Control case for eviction, or fail therein, set up agreements of sale, which they know are not true, only for the purpose of gaining further time. The matters therefore require careful scrutiny. The Courts have to balance the rights of landlords on the one hand and tenants on the other.

(8) The case on hand is a clear example of a tenant who does not, have a prima facie case. The facts as noticed by the learned Single Judge are as follows. The landlord has retired from government service, he got Rs. 2.38 lakhs as Provident Fund and is not, according to him, in need of money. He says that he had no need to sell his property. On the other hand, he says he bona fide needs the house for his own occupation. The tenant who says he paid Rs. 2,00,000 out of Rs. 15 lakhs does not produce any receipt for the said payment. He does not even produce the agreement of sale but says he has lost it and is trying to trace it. So far as the tenant is concerned, he relies on the fact that the landlord has not collected rent for about 10 months as probablising the truth of the agreement of sale. But here the landlord has explained that the reason for not demanding rent for 10 months was that the tenant was under detention in some criminal cases. On these facts the learned Single Judge in our opinion rightly refused to grant injunction against the landlord from alienating or parting with possession. The learned Single Judge therefore rightly held that no prima facie case has been made out by the tenant for granting stay of the Rent Control case before the Additional Rent Controller.

(9) The decision of a learned Single Judge of this Court in Vinod Industries Pvt. Ltd. vs. Suraj Kumari is relied upon for the appellant. There the factual position was that the landlady entered into an agreement of sale dated 5.10.74, not with the tenant company directly but with some of the family members of the shareholders of the said company and the purchasers had filed a suit for specific performance against the landlady in 1987. The landlady filed an eviction case against the tenant and the Additional Rent controller directed the tenant under Section 15(1) of the Delhi Rent Control Act, to deposit arrears of rent for the period from 1.4.1987 at Rs. 500.00 p.m. up to date, within one month and continue to so deposit. The agreement of sale by landlady was one of the 'undisputed facts'. The tenant company argued that if the veil is lifted and the relationship of parties is noted, it will be seen that the agreement of sale was in substance in favor of the company. It was argued for the landlady that there was no allottment by the company to the purchasers under the agreement of sale. In that case the learned Judge stayed the eviction proceedings and permitted the suit to go on because the agreement of sale was not in dispute and the learned Judge felt that prima facie, the relationship of landlord and tenant ceased. It was on those facts that the eviction case was stayed.

(10) From the facts adverted to by the learned Single Judge, it is clear that the tenant has not made out any prima facie case in regard to the truth of the alleged agreement of sale. We agree with the learned Single Judge. For these reasons the appeal is dismissed.