Surjeet Kaur Tuli vs Union Of India
2001 Latest Caselaw 1747 Del

JUDGMENT

Mahmood Ali Kha, J.

1. This civil revision filed under Section 115 of Civil Procedure Code raises a short but important question. The question raised may be formulated as follows:

"Whether the Union of India loses the protection of Delhi Rent Control Act (in short DRC Act) after the contractual lease entered into by it with landlord has been determined by efflux of time or otherwise determined in terms of Section 106 of the Transfer of Property Act (in short T.P. Act)? Implied in it is the question whether Section 50 of DRC Act bars the jurisdiction of civil court for eviction of Union of India."

2. The facts, shorn of unnecessary details, are succinctly set out. The petitioner leased out her premises bearing No. 34, New Market, West Patel Nagar, New Delhi to respondent No. 1 - Union of India for use as a post office by its postal service department under a lease agreement dated 29.6.1982, bearing Rs. 2000/- per month as rent, for a period of five years. The lease deed was duly registered with the office of the Sub Registrar. The respondent Nos. 2 and 3 are officers of Postal Department. The lease period ended on 1.6.1987 by efflux of time. No further lease deed was executed in respect of the premises between the respondent No. 1 and the petitioner. But the respondent continued to pay rent of the premises at contractual rate. The petitioner served a notice dated 18.4.1995 purported to be under Section 80 CPC terminating the lease and demanding damages for use and occupation @ Rs. 7000/- per month from 1.6.1987 to 31.5.1992 and Rs. 12000/- per month for the period from 1.6.1992 to 31.5.1995. Thereafter the petitioner filed a suit for recovery of the possession of the suit premises and also for recovery of Rs. 3,72,200/- @ Rs. 12,000 per month as damages for use and occupation for the last 3 years.

3. The case of the petitioner in the plaint is that the contractual lease has been determined by efflux of time stipulated in the registered lease deed. The lease agreement was in writing and was executed by the respondent No. 1 on 29.6.1982 and after the expiry of the lease period on 1.6.1987 it has not been renewed. The Union of India has no right, title and interest to remain in occupation of the premises. In terms of Article 299 of the Constitution of India it was mandatory to have a registered lease agreement at the commencement of the lease which was complied with. After the expiry of five years, the lease stood automatically terminated. There being no lease deed required by Article 299, after the expiry of first five year the respondent is in unauthorised occupation of the premises. Though the lease stood terminated by efflux of time yet the petitioner served a notice under Section 80 CPC dated 18.4.1995 terminating the lease agreement with effect from 1.7.1995, or by the end of lease month which the respondent deemed to be the lease month. Other averments are not relevant for consideration of the present controversy so they need not be stated here.

4. The respondent Union of India contested the suit by filing a written statement. It was pleaded therein, inter alia, that the rent of the premises was Rs. 2300/- per month and that the jurisdiction of civil court to entertain the suit was barred by Section 50 of Delhi Rent Control Act.

5. The petitioner then moved an application under Order 12 Rule 6 CPC for passing a decree of possession on the admission made by the respondent in the written statement. This application was opposed by the respondent.

6. The learned Additional District Judge, who was trying the civil suit, after hearing the arguments on the application dismissed it on the preliminary point raised by the respondent that the respondent was a tenant in the premises on monthly rent of Rs. 2300/- and such a tenant can be evicted from the premises only in accordance with the provision of Delhi Rent Control Act. The jurisdiction of civil court is barred to entertain such suit by Section 50 of the said Act.

7. The petitioner is aggrieved and has assailed the order in this revision petition.

8. The counsel appearing for the petitioner has argued that after the initial lease was determined by efflux of time on 29.6.1987 no fresh lease deed was executed between the parties so no valid lease agreement came into being in view of Article 299 of Constitution of India. Moreover, it was submitted, the lease was terminated by service of notice dated 18.4.1995 also in accordance with Section 106 of Transfer of Property Act (the T.P. Act in short). He argued that the respondent is now in unauthorised occupation of the premises and is liable to hand over possession thereof of the petitioner. It was contended that the respondent not being in occupation of the premises as tenant w.e.f. 1.6.1987 has lost the protection of the provisions of DRC Act. He contended that Section 50 of DRC Act does not bar the jurisdiction of civil court to entertain the civil suit for ejectment of respondent. He relied upon the judgment of Allahabad Court in State of U.P. and Anr. v. Phool Chand Aggarwal and Anr. 1982(2) Rent Control Reporter 100 and the judgment of a Division Bench of this court in Shyam Kishore v. U.O.I. and Ors. 1995 RLR 480(DB) in support of his argument and urged that the order of Additional District Judge impugned in the petition be set aside.

9. On the contrary the counsel for respondent Union of India argued that the Union of India, after the contractual lease was determined, either by efflux of time, or terminated by a quit notice contemplated in Section 106 of T.P. Act, continued to be in occupation of the premises as a tenant as defined by Section 2(1) of the Act. So its eviction from the premises could be sought only on one of the grounds of eviction enumerated in the Clauses (a) to (1) of Section 14(1) of the DRC Act. It was urged that the jurisdiction of the Civil Court to entertain a civil suit for possession of the premises against respondent No. 1 was explicitly barred by Section 50 of the DRC Act. It was submitted that the case law cited by the petitioner is inapplicable to the fact of the present case because in those cases the question for consideration of the court was whether a lease agreement had been executed and registered in accordance with the mandatory requirement of Article 299 of the Constitution of India and whether contractual lease had come into existence by mere acceptance of the rent by the landlord from the government. he accordingly submitted that the order of the learned Additional District Judge impugned, suffers from no legal infirmity and should be affirmed.

10. The first question is as to what is a lease and how a lease of a premises in favor of the Government of India/State comes into existence? The word "lease", is not defined by the provisions of the DRC Act. However, it finds mention in Section 105 of the T.P. Act. It is extracted as under:-

"Lease defined.- A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, expressed or implied, or in perpetuity, in consideration of a price paid or promise, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to be transferor by the transferee, who accepts the transfer on such terms.

11. Two other provisions of T.P. Act need to be noticed. They are Sections 106 and 107. Being relevant, they are also reproduced below:-

"106. Duration of certain leases in absence of written contract or local usage.- In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either Lesser or lessee, by six months' notice expiring with the end of a year of the tenancy; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either Lesser or lessee, by fifteen days' notice expiring with the end of a month of the tenancy.

Every notice under this Section must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or if such tender or delivery is not practicable affixed to a conspicuous part of the property."

"107. Lease how made.- A lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument.

All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.

Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the Lesser and the lessee:

Provided that the State Government may from time to time, by notification in Official Gazette, direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession."

12. The word "lease", as defined in Section 105 of T.P. Act, extracted above, is a transfer of right in immovable property for the enjoyment of such property for some consideration. The consideration may be in cash, kind or service etc. The duration of lease is decided by an agreement between the lesser and the lessee. Where the duration of the lease has not been so determined by a written contract between them, lease of immovable property for agriculture and manufacturing purpose shall be deemed to be lease from year to year and other leases shall be deemed to be a lease from month to month in accordance with Section 106 of T.P. Act. The lease of first kind may be determined by six months notice expiring with the end of the year of tenancy and the month to month tenancy is determinable by service of a 15 days notice expiring with the end of the month of the tenancy as per this provision. Section 107 is equally important as it makes it mandatory for a lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent to be created only by a registered instrument. The other leases, however, may be created either by registered instrument or by an agreement accompanied by delivery of possession.

13. Another provision of the same Act contained in Section 108 of the T.P. Act may also be taken note here. It provides that after the lease agreement come into existence the obligation to pay rent becomes enforceable.

14. Even in the absence of any written lease deed/registered lease deed envisaged under Section 107 a valid enforceable agreement of lease of a premises between the parties can be created if other ingredients of the lease defined under Section 105 of the T.P. Act exist.

15. The next question arises how a valid lease of an immovable property can be created in favor of the Union of India/State. The manner in which the leases are made in provided in Section 107, as noted above. If it is a lease from year to year or reserves an yearly rent, it can be made only by a registered instrument. Other leases, however, may be made either by registered instrument or an agreement accompanied by delivery of possession. In other words the registration of the lease deed is not mandatory requirement of law.

16. That straightway brings me to Article 299(1) of the Constitution of India which is the mainstay of the case of the petitioner. the decision of the case hinges on the applicability of this Constitution provisional to the facts of this case. It is extracted as under:-

"Contracts.- (1) All contracts made in the exercise of the executive power of the Union of India or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise.

17. The Supreme Court examined this provision in State of Bihar v. Karam Chand Thapar AIR 1962 SC 110, Vikh Rai Jaipuria v. UOI , State of West Bengal v. B.K. Mondal & Sons , K.P. Chaudhary v. State of M.P. AIR 1967 SC 202, Mulamchand v. State, , in Bihar Eastern Gangetic Fishermen Coop. v. Sipahi Singh, . The Supreme Court summarised the proposition of law as under:-

"The provisions of Article 299 of the Constitution which are mandatory in character require that a contract made in the exercise of the executive power of the Union or of a State must satisfy three conditions, viz.;

(i) it must be expressed to be made by the President or by the Governor of the State as the case may be; (ii) it must be executed on behalf of the President or the Governor, as the case may be and (iii) its execution must be by such person and in such manner as the President or Governor may direct or authorise. Failure to comply with these conditions nullifies the contract and renders it void and unenforceable. There is no question of estoppel or ratification in a case where there is contravention of the provisions of Article 299(1) of the Constitution."

18. In Mulamchand's case (supra) the Supreme Court held that there was no question of estoppel against the Union of India where the contractual obligations were created otherwise than in accordance with Article 299(1) of Constitution of India. It was further held that the provision of this Article was enacted for safeguarding the interest of the government from liabilities arising out of contracts entered into on behalf of the Union of India transgressing the mandatory requirement of this Article on the ground of public policy. Another judgment of the Supreme Court in State of Punjab v. Om Prakash Baldev Krishan, has laid down that a valid contract may be entered into by a person on behalf of the government if it is established that it was entered into by an authorised person.

19. The proposition of law is crystal clear. A contract on behalf of Union of India or Sate to be in conformity with the provisions of "Article 299(1) of the Constitution of India (1) must be expressed to have been made on behalf of Union of India or the Governor of the State, as the case may be; (2) it must be in writing and duly executed; and, (3) it must be executed by such person and in such manner as the President or the Governor, as the case may be, may direct or authorise; (4) the written agreement, which has to be in writing, must also be registered in accordance with the provisions of Registration Act; and (5) the written contract envisaged under this Article may be in the form of a deed or correspondence but the contract set up should be established to have been entered into in writing and for and on behalf of the President or the Governor, as the case may be, by a person who has been directed or has been authorised to enter into it.

20. Now adverting to the question as to how the contract of lease of immovable property a landlord and the Government creating obligations intervivos comes into being it may again be noted that though Section 107 of the T.P.Act allowed a lease which is not for year to year and does not reserve yearly rent to be not necessarily by a registered instrument yet if it is a contract of lease executed on behalf of the Government the provision of Article 299(1) of the Constitution of India makes the execution of a lease deed and its registration a mandatory requirement for a binding contract even though it is for a period of less than one year. Obligations under the lease agreement, thus, cannot be created between the landlord and the tenant Union of India and the State without a duly registered lease deed. This is mandate of Article 299(1) of Constitution of India. This provision has been enacted in order of save the Union of India and the State from obligation arising out of a contract entered into by a person who is not authorised to enter into it. Otherwise an unscrupulous or a negligent employee of the Union of India or State could have created legal liabilities against the Union of India or the State which are neither prudent nor were in the public interest, which could have been detrimental to the interest or which the Government was not willing to bear.

21. Article 299(1) of Constitution of India make it manifest that it applies to a "contract" entered into on behalf of the President of India and Governor of a State and not to other sundry transactions of government business. The word "contract" assumes importance. Word "contract" is defined by clause (h) of Section 2 of the Indian Contract Act as under:

"An agreement enforceable by law is a contract."

What is an agreement is defined in clause (e) of this Section as under:-

"Every promise and every set of promises, forming the consideration for each other, is an agreement."

Section 10 of the said Act defines what agreement are contract. It says as under:

"All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.

Nothing herein contained shall affect any law in force in India, and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents."

22. Broadly speaking all agreement are contracts which are made by parties (1) who are competent to enter into an agreement and do not suffer form legal disability on account of their minority, unsoundness of mind or any other statutory disability' (2) agreement is entered into for lawful consideration; (3) agreement is entered into for lawful object; and (4) agreement are not declared void by express provision of law.

23. The contract is a conscious bilateral transaction between two parties. It requires (1) a proposal by one party, (2) acceptance of the proposal by the other party, (3) consideration of proposal and acceptance thereof i.e. promise, and (4) enforceability at law.

24. Herein there is no dispute between the parties that after the expiry of the duration of the first lease on 1.6.1987 no new lease deed was executed between the parties. There was no proposal by one party and acceptance thereof by other resulting into a promise and eventual contact. The requirements of a contract, explained above, as such, are absent altogether. If there is no contract between the parties, the Article 299(1) of the Constitution of India will have no application to this case.

25. Reverting to the facts in hand it is noteworthy that the lease of the premises between the petitioner and respondent no.1 Union of India was by an instrument. It was for a period of 5 years and was duly registered under the provisions of India Registration Act. It was a contract of lease which was executed in accordance with the provisions of Article 299(1) of the Constitution of India. There is no dispute between the parties on this point. However, the lease was for period of 5 years commencing from 29.6.1982. The lease agreement came to an end on 1.6.1987, according to the petitioner by efflux of time. The petitioner, otherwise also served a notice dated 18.4.1995, though purported to be a notice under Section 80 of the CPC, yet it is a notice of termination of tenancy as contemplated under Section 106 of the T.P.Act. It determined the tenancy of respondent no.1 Union of India from 1.7.1995 or by another date on which according to respondent no.1 the tenancy month came to an end. It is not necessary here to decide whether the tenancy was determined by efflux of time stipulated by the lease agreement on 1.6.1985 or it was terminated by service of a quite notice under Section 106 of the T.P.Act. When the suit was filed, as per averment of the petitioner, the contractual tenancy of respondent no.1 had come to an end. The respondent was not a contractual tenant then.

26. A pertinent question which arises for consideration here is as to what was the status of the Union of India after the tenancy was determined. It is not disputed that no fresh lease agreement was entered into between the petitioner and respondent no.1 Union of India for the creation of the fresh contractual lease of the said premises in accordance with the provisions of Article 299(1) of the Constitution of India. There being no contract between the parties the respondent Union of India did not assume the character of a contractual tenant. This necessitates the consideration of definition of the word "tenant" given in clause (1) of Section 2(1) of the DRC Act. Clause (1) defines the word "tenant" as follows:-

"tenant means any person by whom or on whose account or behalf the rent of any premises is, or, but for a special contract, would be, payable, and includes:-

(i) a sub-tenant;

(ii) any person continuing in possession after the termination of his tenancy; and

27. In terms of sub-clause (ii) a person who continues to be in possession after his contractual tenancy has been determined or terminated in accordance with the provisions of T.P.Act is a tenant. Respondent no.1 Union of India as such would fall within the definition of this clause and will also be a tenant.

28. Article 299(1) of the Constitution of India provides that the contracts which are made by the Union of India or state, as the case may be, should be expressed to have been made on behalf of the President and the Union of India and shall be executed by such person and in such manner as may be directed or authorised. They shall be by a registered instrument. This Article provides as to how a binding contract on behalf of the President or a Governor shall be executed to be enforceable in law. A contract could not be entered into on behalf of the President otherwise than in accordance with this Article. In other words entering into an agreement which binds the Union of India under a contractual obligation otherwise than in accordance with this Article, is completely barred. However, sub-clause (ii) of clause (1) of Section 23 of DRC Act is a right conferred on a person who continued to be in possession after his lease agreement has been determined or his tenancy has been terminated. He continues to be a tenant by operation of law. In common parlance he is called the statutory tenant as opposed to a contractual tenant or a lessee under a duly executed lease deed. The right is conferred on the Union of India to continue in the premises as a tenant even after the contractual lease has come to an end. This status of being a tenant is not by virtue of the Union of India entering into a written contract of lease in respect of the immovable property leased out, in accordance with Article 299(1) of the Constitution of India. For understanding the implication of this definition of a statutory tenant who continues to be in occupation of a tenancy premises another provision of DRC Act requires attention. It is Section 14 and is one of the most important provisions of the said Act. Relevant portion of this provision is extracted as under:-

"Protection of tenant against eviction.-

(1) Notwithstanding anything to contrary contained in any other law or contract, no order or decree for the recovery of possession of any premises shall be made by any court of Controller in favor of the landlord against a tenant:

Provided that the Controller may, on an application made to him in the prescribed manner, make an order for the recovery of possession of the premises on one or more of the following grounds only."

29. The grounds on which the tenant's eviction could be sought are enumerated in clause (a) to (1) of Sub-section (1). Sub-section (1) is a restriction on the right of the landlord to claim possession of the premises from a tenant. It bars the recovery of possession from the tenant otherwise than establishing the existence of any of the grounds mentioned in Sub-section (1) of Section 14. The tenant for whose eviction the petition is brought under this Section may be a contractual tenant or a statutory tenant. The tenant who is holding over after his tenancy has come to an end will be a tenant and his possession of the premises as tenant would be fully protected by Section 14 of the Act. There are certain other provisions which creates rights and liabilities of such tenant which need not be reproduced because the provision of Section 14(1) is clear. The effect of Section 14(1) is that the landlord cannot bring a petition for a tenant otherwise then in accordance with this provision. It being a non obstante clause it operates even if there is law or contract which provides to the contrary. Here I may pause to mention that the rent of the premises is Rs. 2300/- p.m. and the premises in occupation of the respondents are premises as defined by clause (j) of Section 2 of the DRC Act and in accordance with Section 3 of the DRC Act the provision of the said Act will apply to the premises occupied by the respondents.

30. Another provision which has an important bearing on the question in hand is Section 50(1) of DRC Act. It is reproduced as under:-

"Jurisdiction of the civil courts barred in respect of certain matters. Save as otherwise expressly provided in this Act, no civil court shall entertain any suit or proceeding in so far as it relates to the fixation of standard rent in relation to any premises to which the Act applies or to eviction of any tenant there from or to any other matter which the Controller is empowered by or under this Act to decide, and no injunction in respect of any action taken or to be taken by the Controller under this Act shall be granted by any civil court or other authority."

31. A plain reading of this provision makes it manifest that the jurisdiction of the Civil Court to entertain any suit for the eviction of a tenant from a premises otherwise than in accordance with the provisions of DRC Act is barred. A tenant can be evicted only by the Rent Controller appointed in accordance with Delhi Rent Control Act. Article 299 of the Constitution of India has no relevance in the case of eviction of a statutory tenant whether it is Union of India or a State Government.

32. For the reasons stated above, there is no infirmity in the finding of the learned Additional District Judge that the civil suit filed by the petitioner for possession against respondent no.1 Union of India was hit by Section 50(1) of the DRC Act and the civil court lacked jurisdiction to entertain it. The only remedy available to the petitioner landlord is by way of filing of an eviction petition under the provisions of DRC Act and not otherwise.

33. Both the cases State of U.P. and Anr. v. Phool Chand Aggarwal and Anr. (supra) and Shyam Kishore v. U.O.I. & Ors. (supra) relied upon by the petitioner are distinguishable on facts and law. In both the cases the question for determination before the court was whether any lease of an immovable property could be created between the Union of India/State and a landlord in transgression of the mandatory requirement of Article 299(1) of the Constitution of India. It was laid down in both the judgments that if the contract of lease has not been executed in accordance with Article 299(1) of the Constitution of India no valid lease comes into existence and there is no relationship of landlord and tenant between the parties. Therefore, the landlord has a right to evict the Union of India/State by filing of a civil suit for recovery of possession etc. Herein the facts are that the Union of India entered into the premises as a tenant under a valid contract of tenancy executed in accordance with Article 299(1) of the Constitution of India and after the lease was determined, it continued to be in its occupation on account of its being protected under the provisions of DRC Act. It is the protection which the law had given to the tenant and the Union of India is no exception. It is still a tenant as defined under clause (1) of Section 2 of the Act. Its eviction could be sought only in accordance with Section 14 of the DRC Act. No Tribunal or Court could direct ejectment of the Union of India otherwise than resort to this provision. Section 50 of the DRC Act is a clear bar to the jurisdiction of any Tribunal or Civil Court not appointed as a Rent Controller of Additional Rent Controller or the Rent Tribunal in accordance with the provisions of the DRC Act.

34. For the reasons stated above there is no merit in the petition. The order of learned Additional District Judge does not suffer from error of jurisdiction, illegality or material irregularity in the exercise of the jurisdiction which warranted interference in the impugned order.

35. The petition is dismissed but the parties are left to bear their own costs.