Rai Brij Raj Krishna And Another vs S.K. Shaw And Brothers

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 2 February 1951

Coram: Saiyid Fazal Ali, Mehr Chand Mahajan, B.K. Mukherjea, N. Chandrasekhara Aiyar

In this case the Supreme Court of India heard an appeal dated 2 February 1951 filed by Rai Brij Raj Krishna and another appellant against the respondents identified as S.K. Shaw and Brothers. The judgment was delivered by a bench consisting of Justice Saiyid Fazal Ali, Justice Mehr Chand Mahajan, Justice B.K. Mukherjea, and Justice N. Chandrasekhara Aiyar. The citation for this decision appears in the All India Reporter as 1951 AIR 115 and in the Supreme Court Reports as 1951 SCR 145, with subsequent references recorded in various law reports such as the 1957 Supreme Court reference 521, the 1959 reference 492, the 1962 reference SC1621, the 1963 reference 120, the 1965 reference 111, the 1970 reference 1193, the 1974 reference 818, the 1979 reference 1745, and the 1989 reference 1110. The statutory provision at issue was Section 11 of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 (Act III of 1947), which empowered the Controller to issue an order of eviction on the ground of non-payment of rent, and the question before the Court was whether a civil court could entertain a suit seeking to set aside such an order, particularly when the existence of non-payment was contested and the Controller’s decision was claimed to be final.

The headnote of the judgment explained that Section 11 of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 conferred on the Controller a dual jurisdiction: first, to determine whether a tenant had failed to pay rent, and second, upon finding such non-payment, to order the tenant’s eviction. The Court observed that even if the Controller were to err in deciding whether rent had been paid, the resulting eviction order could not be challenged in a civil court. The Court relied on precedents such as Queen v. Commissioners for Special Purposes of Income Tax (21 OBD 313) and Colonial Bank of Australasia v. Willan (LR PC 417) to support this principle of non-reviewability of the Controller’s order.

The appeal originated from a judgment and decree of the Patna High Court dated 25 March 1949, which itself had reversed an appellate decree of a Subordinate Judge in Suit No. 62 of 1948. Counsel for the appellant, Mr. Baldev Sahay, appeared with Mr. T. K. Prasad, while counsel for the respondent, Mr. N.C. Chatterjee, appeared with Mr. H.J. Umrigar. The Supreme Court judgment, delivered by Justice Fazal Ali, began by summarizing the factual background. The respondents were occupying, on a month-to-month basis, several blocks of premises owned by the appellants and paying a monthly rent of Rs. 112. The rent for March, April, and May 1942 fell into arrears; the respondents subsequently paid the overdue amount together with the June rent on 28 June 1947 by issuing two cheques. Because the appellants refused to accept those cheques, the respondents on 4 August 1947 sent the same amount by postal money order. On 12 August 1947 the appellants alleged that despite this payment the respondents had not satisfied the rent obligation and therefore invoked Section 1-1 (1) (a) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 to obtain an eviction order from the House Controller. Section 11 (1) (a) of the Act, as quoted, provides that a month-to-month tenant may be evicted only for non-payment of rent, breach of tenancy conditions, unauthorised sub-letting, or cessation of employment when the tenant is an employee of the landlord. On 30 August 1947 the respondents, having dispatched the money order, were the subject of the Controller’s eviction proceedings, which subsequently gave rise to the present appeal.

In this matter the eviction of the respondents was pursued on the ground of non-payment of rent, and the House Controller was invoked under section 1-1 (1) (a) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947. The statutory provision that governs the power to evict a month-to-month tenant is contained in section 11 (1) (a) of the same Act, which reads in full: “Notwithstanding anything contained in any agreement or law to the contrary and subject to the provisions of section 12, where a tenant is in possession of any building, he shall not be liable to be evicted therefrom, whether in execution of a decree or otherwise, except—(a) in the case of a month to month tenant, for non-payment of rent or breach of the conditions of the tenancy, or for sub-letting the building or any portion thereof without the consent of the landlord, or if he is an employee of the landlord occupying the building as an employee, on his ceasing to be in such employment;”. On the thirtieth day of August 1947 the respondents, after the money order they had sent earlier had been returned by the appellants, placed with the Office of the House Controller the rent that was due up to the month of June. Despite this deposit, the House Controller issued an order on the tenth of November directing that the respondents be evicted by the tenth of May 1948, holding that they had become liable for eviction on the basis of non-payment of rent. The Commissioner, on appeal, affirmed the Controller’s order on the twenty-seventh of April 1948.

Consequently the respondents instituted the present suit in the Patna Munsif’s Court, seeking a declaration that the House Controller’s order dated the tenth of November 1947 was illegal, ultra vires, and issued without jurisdiction. The Munsif dismissed the suit, and his decree was affirmed on appeal; however, the High Court set aside that decree, holding that the Rent Controller’s order was beyond his jurisdiction. Thereafter the appellants obtained leave to appeal from the High Court’s decision and have now preferred this appeal. The High Court’s judgment, though detailed, raised a straightforward issue. The respondents contend that there was no non-payment of rent and, because the Bihar Act permits eviction only upon established non-payment, the House Controller lacked authority to order the eviction. The appellants, on the other hand, argue that non-payment existed within the meaning of the statute, since the rent was not paid at the time it fell due. It was pointed out that the rent for March became payable in April and the rent for April became payable in May, but the respondents did not make any payment of the arrears until the twenty-eighth of June 1947.

According to the record, the respondents did not make any payment toward the arrears until the 28th of June, 1947. At the beginning of the tenancy, the respondents had paid one month’s rent in advance, and it had been agreed with the appellants that such advance rent could be set off against any later default for a full month’s rent. It was later observed that the advance could be applied only to one month’s rent, whereas in the present case rent for three months had become due. Because the tenancy was on a month-to-month basis, each month’s rent became payable in the following month, and failure to pay the rent at the time it was due satisfied the conditions of section 11(1)(a) of the Act. The appellants also advanced a second argument: they contended that, considering the overall scheme of the Act, the House Controller possessed full competence to determine whether the condition precedent to eviction—non-payment of rent—had been fulfilled, and once the Controller reached such a decision, that decision could not be challenged in a civil court. This view had been accepted by the two lower courts, and the first appellate court dealt with it by stating, “But the Buildings Control Act has authorised the Controller to decide whether or not there is non-payment of rent and it is only when he is satisfied that there has been non-payment of rent that he assumes jurisdiction. If the question of jurisdiction depends upon the decision of some fact or point of law, and if the court is called upon to decide such a question, then such decision cannot be collaterally impeached (vide 12 Patna 117). In my opinion, when the Controller assumed jurisdiction on being satisfied that there was non-payment of rent and proceeded to pass an order of eviction, the Civil Court can have no jurisdiction to challenge the validity of such order.” The High Court, however, did not adopt this reasoning. Referring to section 111 of the Transfer of Property Act, the High Court formulated its own interpretation, observing that the Act was enacted in a context intended to prevent unreasonable eviction of tenants, as expressed in its preamble. Consequently, the phrase “non-payment of rent” in section 11, when read in its proper context, must be interpreted so as to broaden the protection afforded to tenants under ordinary law against termination of their tenancy. The Legislature, by providing that a tenant could be evicted only for non-payment of rent, therefore intended to shield a tenant from eviction solely because of a default, provided the tenant presents all rent due before the eviction order is made.

In this case, the Court observed that the petition required the tenant to pay all rent that was due from him before any order of eviction could be issued. The Court explained that if the respondents’ construction of section 11 of the Act were accepted—namely, that the provision gave a landlord the right to seek eviction on the basis of irregular rent payments interpreted as “non-payment” of rent, and that it authorized the Controller to decide whether such irregular payments amounted to non-payment within the meaning of subsection (1) of section 11, and furthermore if subsection (3) of section 18 were read to make the Controller’s decision on that question of law final—then the effect would be that the Act granted a landlord a right far greater than the right he possesses under ordinary law for determining tenancies. Moreover, the Act would then give the Controller a power far exceeding that of the civil courts when it came to passing eviction decrees against tenants. The Court noted that the principle of law and equity that underlies relief against forfeiture for “non-payment of rent” would be wholly extinguished, and the protection ordinarily afforded to a tenant in possession of a building would be severely curtailed rather than enhanced. The Court held that a construction of the provisions intended to produce such consequences could not be reconciled with the circumstances for which the Act was enacted, and therefore could not be accepted. Consequently, the Court rejected the argument presented by counsel for the respondent, which contended that the facts disclosed in the petition raised a question for the Controller to determine whether a legal case of non-payment of rent existed, and that even if the Controller’s decision on that question were erroneous, it could not be questioned in a civil court. The Court found this contention untenable and over-ruled it. The Court further stated that the view adopted by the High Court was incorrect. It pointed out that section 11 began with the words “Notwithstanding anything contained in any agreement or law to the contrary,” indicating that any attempt to import the provisions of the transfer of property law for interpreting this section would be misplaced. The Court emphasized that section 11 was a self-contained provision and that it was unnecessary to look outside the Act to decide whether a tenant could be evicted or under what conditions. The provision clearly stipulated that a tenant could not be evicted except on specified grounds, one of which for a month-to-month tenancy was non-payment of rent. Finally, the Court referred to subsection (8)(b) of section 11, which required the Controller, if satisfied that the landlord’s claim was made in good faith, to issue an order directing the tenant to surrender possession of the building to the landlord.

If the Controller is not satisfied with the application, he must issue an order rejecting it. Section 16 of the Act authorises the Controller to conduct enquiries and inspections, to summon witnesses, to enforce their attendance and to compel the production of documents, all in the same way as is provided under the Code of Civil Procedure. Section 18 stipulates that any person who is aggrieved by an order of the Controller may, within fifteen days of receiving that order, prefer an appeal to the Commissioner of the Division, and it also lays down the procedure for hearing such an appeal. Sub-section (3) of Section 18 provides that “the decision of the Commissioner and subject only to such decision, an order of the Controller shall be final, and shall not be liable to be questioned in any Court of law whether in a suit or other proceeding by way of appeal or revision.” Thus the Act creates a complete machinery for investigating the matters on which the Controller’s jurisdiction to order eviction of a tenant depends, and it expressly declares the Controller’s order to be final, subject only to the Commissioner’s decision. The Act vests the Controller alone with the power to determine whether rent has been unpaid, and his determination on that point is a prerequisite before he may pass an eviction order under Section 11. Given these statutory provisions, the question arises whether the Controller’s decision on a matter that the Act expressly empowers him to decide can be challenged at all. The principles governing this issue were articulated by Lord Esher M.R. in The Queen v. Commissioners for Special Purposes of the Income Tax, where he observed: “When an inferior court or tribunal or body, which has to exercise the power of deciding facts, is first established by Act of Parliament, the legislature has to consider what powers it will give that tribunal or body. It may in effect say that, if a certain state of facts exists and is shown to such tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such things, but not otherwise. There it is not for them conclusively to decide whether that state of facts exists, and, if they exercise the jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction. But there is another state of things which may exist. The legislature may intrust the tribunal or body with a jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction, on finding that it does exist, to proceed further or do … (1) 21 Q.B.D. 313, at .319.” When the legislature creates a tribunal or body with limited jurisdiction, it also determines whether an appeal will be available from its decisions, because without such provision there would be none.

The Court noted that, irrespective of the extent of jurisdiction conferred upon a tribunal, the legislature must also determine whether any appeal shall lie against the tribunal’s decision, otherwise no appeal would exist. In the second of the two illustrations previously mentioned, the Court held that it is a mistaken application of the principle to assert that a tribunal cannot create its own jurisdiction by erroneously finding certain facts to exist. The reasoning follows because the legislature expressly authorized the tribunal to determine all factual matters, including the preliminary facts on which the further exercise of its jurisdiction depends, and therefore no appellate right arises if the statute bars it. The judgment further quoted Sir James Colville’s observations in The Colonial Bank of Australasia v. Wilkinson, where he stated that a judgment rendered by a judge possessing jurisdiction is conclusive on its face and cannot be set aside by certiorari on the ground of erroneous factual findings. The Court found that the present matter falls within the second category described by Lord Esher, as the governing Act has granted the Controller both the power to ascertain whether rent is unpaid and, upon such finding, the authority to order eviction of the tenant. Consequently, even assuming that the Controller may have incorrectly concluded that rent was unpaid, the Court held that his order could not be challenged in a civil court. On that concise basis, the Court concluded that the appeal must succeed, and accordingly it allowed the appeal, set aside the High Court’s judgment and decree, restored the decree of the subordinate courts, and awarded costs throughout to the appellants. The record then noted the agents appearing for the parties, namely R.C. Prasad for the appellant and S.P. Varma for the respondent.