Ram Nath And Another vs M/S. Ram Nath Chhittar Mal And Others

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 401 to 403 of 1960

Decision Date: 8 September 1960

Coram: J.L. Kapur, Bhuvneshwar P. Sinha, P.B. Gajendragadkar, K.N. Wanchoo

On 8 September 1960 the Supreme Court of India delivered a judgment in the matter of Ram Nath and another versus M/s Ram Nath Chhittar Mal and others. The judgment was authored by Justice J L Kapur and the bench also comprised Justice Bhuvneshwar P Sinha, Justice P B Gajendragadkar and Justice K N Wanchoo. The petitioners were identified as Ram Nath and another, while the respondents were identified as M/s Ram Nath Chhittar Mal and others. The case was reported in the 1961 volumes of the All India Reporter (AIR 104) and the Supreme Court Reports (SCR (1) 600). The dispute concerned a suit for ejectment based on the bona‑fide requirement for rebuilding under the Delhi & Ajmer Rent Control Act, 1952 (Act 38 of 1952), specifically sections 13(g) and 15. The civil appellate jurisdiction covered Appeals Nos. 401 to 403 of 1960, which were brought by special leave against the Punjab High Court (Circuit Bench, Delhi) judgments dated 1 March 1960 in Civil Revision Cases 166‑D, 167‑D and 168‑D.

In the original proceedings the appellant‑landlords instituted three separate eviction suits against three different tenant respondents, each suit relying on clause (g) of the proviso to section 13(1) of the Act on the ground that the premises were required in good‑faith for rebuilding. The parties entered into terms of compromise that were substantially aligned with the provisions of section 15 of the Act, and the trial court passed decrees directing the respondents to vacate the premises on a specified date. The respondents failed to observe that date and only handed over possession at a later time. After completing the rebuilding, the respondents filed an application under section 15 for possession. The Punjab High Court, while holding that section 15 was not directly applicable to the original proceedings, concluded that the decree’s terms could be enforced as execution proceedings. On appeal, the landlords contended that the decree, issued under section 13(1) proviso (d), was effectively made in accordance with section 15 because the respondents themselves had invoked that provision. The respondents countered that the decree could not be treated as a section 15 decree since it arose from a compromise and the timing of possession was not a condition of the contract. The Supreme Court held that because the tenant‑respondents did not deliver possession to the landlord‑appellants on or before the dates stipulated in the decree, the provisions of section 15(3) of the Delhi & Ajmer Rent Control Act, 1952, were not available to them, and consequently they were not entitled to be put in possession of the premises.

On 8 September 1960, a judgment was delivered by Justice Kapur in a matter involving three appeals. The appeals were against judgments and orders of the Punjab High Court in Civil Revision cases numbered 166‑D, 167‑D and 168‑D, which had been rendered in 1958. The appellants in each appeal were the landlords, while the respondents were three different tenants. The case arose under section 35 of the Delhi and Ajmer Rent Control Act, 1952. Counsel for the appellants, appearing in all three appeals, were represented by senior lawyers, while counsel for the respondents were engaged separately: one team of lawyers appeared for the respondent in Civil Appeal No. 401 of 1960, and another team appeared for the respondents in Civil Appeals Nos. 402 and 403 of 1960.

The landlords had filed three separate suits to evict their respective tenants pursuant to clause (g) of the proviso to section 13(1) of the Act, asserting that the premises were genuinely required for rebuilding. On 27 February 1953, the parties to each suit entered into a compromise that provided, in essence, that a decree would be issued for a sum of Rs 82 8/‑ as rent due, and that ejectment would be granted in respect of the shop involved. The compromise stipulated that the tenants would vacate the shop by 4 March 1953 and deliver possession to the landlord. In turn, the landlord agreed to reconstruct the shop and, within six months from the vacating date, return possession to the tenants. The parties also agreed that the rent would be fixed by the court. Following this agreement, the trial court issued an order and a decree reflecting the terms of the compromise. The decree directed that a sum of Rs 82 8/‑ be paid to the landlord from the money deposited, with any balance to be returned to the tenants, and that the tenants were responsible for paying the rent as fixed by the court. The decree required the tenants to surrender possession of the shop to the landlord on 4 March 1953, after which the landlord would rebuild and, within six months, hand the newly constructed shop back to the tenants. In practice, the tenants actually delivered possession to the landlords between 7 and 15 March 1953, slightly beyond the date specified in the decree. After the reconstruction was completed, each tenant filed a separate application on 7 October 1953 under section 15 of the Act, seeking to be put back into possession of the shop.

The Court observed that the compromise between the parties did not introduce any issue that lay outside the subject matter of the suit. Accordingly, the Court held that the respondents were entitled to enforce the terms of the decree in the proceedings they had initiated, specifically under section 15 of the Act. The Court further found that time was not a condition of essence in the compromise, and therefore not a condition of essence in the decree. As a result, even though the respondents delivered possession of the premises after the date fixed in the decree, namely 4 March 1953, the respondents retained the right to enforce the decree by execution and to apply for the restoration of possession. Moreover, the Court indicated that the respondents could also seek restitution by invoking the inherent powers of the Court. In this regard, the High Court expressed the view that, although section 15(2) of the Act was not directly applicable to the proceedings, the proceedings could nevertheless be treated as execution proceedings.

Against the judgment and order of the High Court, the appellants filed an appeal before this Court by way of special leave. Under section 13 of the Act, the respondents enjoy protection against eviction, except for the grounds enumerated in the proviso. The appellants had originally instituted suits for eviction pursuant to section 13, proviso (g), which reads as follows: “Notwithstanding anything to the contrary contained in any other law or any contract, no decree or order for the recovery of possession of any premises shall be passed by any court in favour of the landlord against any tenant including a tenant whose tenancy is terminated), Provided that nothing in this sub‑section shall apply to any suit or other proceeding for such recovery of possession if the Court is satisfied— (g) that the premises are bona fide required by the landlord for the purpose of rebuilding the premises or for the replacement of the premises by any building or for the erection of other building and that such building or rebuilding cannot be carried out without the premises being vacated;”. Consequently, when the suits were instituted, the provisions of the Act were invoked. The decrees that were passed were based on the finding that the premises were required by the landlord for rebuilding, which falls within section 13, and the decrees also incorporated the requirements of section 15, which provides: “The Court shall, when passing any decree or order on the grounds specified in clause (f) or clause (g) of the proviso to sub‑section (1) of section 13 ascertain from the tenant whether he elects to be placed in occupation of the premises or part thereof from which he is to be evicted and if, the tenant so elects, shall record the fact of the election in the decree or order and specify therein the date on or before which he shall deliver possession so as to enable the landlord to commence the work of repairs or building or rebuilding, as the case may be. (2) If the tenant delivers possession on or before the date specified in the decree or order,”

The landlord was required, upon completing the repairs, building work or reconstruction, to return the tenant to possession of the whole premises or the portion that had been occupied. If the tenant delivered possession on or before the date fixed in the decree or order, the landlord was obliged to start the repair, building or reconstruction work within one month of that date. The landlord also had to finish the work within a reasonable time and, after completion, to place the tenant back in occupation in accordance with subsection (2). Should the landlord fail to commence the work within the one‑month period, fail to complete the work within a reasonable time, or, after completing the work, fail to give the tenant back possession as required, the Court was empowered to entertain an application by the tenant filed within one year of the specified date. Upon such an application, the Court could order the landlord either to place the tenant back in occupation of the premises or part thereof on the original terms and conditions, or to pay the tenant compensation as the Court might determine. The compromise, the order and the decree set out three principal conditions: first, the respondents were to vacate their respective shops on 4 March 1953 and hand over possession to the appellants; second, the respondents elected to regain possession after the rebuilding, and the appellants agreed to return possession on 4 September 1953; third, the amount of rent payable after the respondents regained possession was to be fixed by the Court.

The appellants argued that, taken together with the fact that the decree was issued in a suit filed under section 13(1) proviso (g), the compromise, order and decree were made in accordance with the provisions of section 15 of the Act. They highlighted that the respondents themselves had made applications to the Court under section 15. The respondents, however, contended that the decree could not be characterized as one under section 15 because it was based on a compromise that fixed the date of delivery of possession to the appellants, fixed the date for completion of the rebuilding, and stipulated the manner of repossession by the respondents. They further submitted that, although the compromise fixed a delivery date, that date was not of the essence of the contract. The Court found the appellants’ contentions to be well‑founded and concluded that the appellants must succeed. The eviction suits had been filed within the framework of the Act and relied on the provisions of section 13 proviso (g); consequently, eviction could occur only after the conditions of section 13 were satisfied. The decrees issued were substantially in line with the provisions of section 15, and, as the appellants argued, required the respondents to vacate the premises on a specified date. Under section 15 the respondents had the right to elect to obtain possession after the rebuilding, and they had indeed made such an election. The statute required the landlord to return possession to the tenant within a reasonable time, which the Court interpreted as a period of six months.

The Court observed that the date for possession had been fixed by a consent decree between the parties, and that the decree also provided that if the respondents were not placed in possession on the same terms as previously, the question of rent would be determined by the court, which indeed occurred under the terms of that consent decree. The Court noted that the applications filed by the respondents seeking to be put into possession were made under section 15(3) of the Act. Because the respondents failed to deliver possession to the appellants on or before the dates specified in the decree, the Court held that the provisions of section 15 contained in sub‑section (3) of the Act could not be invoked by them, and consequently they were not entitled to the possession they had prayed for. It was further argued by the respondents that the appellants had taken possession after the specified date without protest and had even accepted rent up to that time, thereby being estopped from raising that defence. The appellants had conceded in the court that such a plea could be raised only in a suit if it were brought. The Court considered it unnecessary to express any opinion on that particular point. The Court concluded that the High Court had erred in ordering possession to be delivered to the respondents. Accordingly, the appeals were allowed, the judgments and orders of the High Court were set aside, and the appellants were awarded costs in this Court, namely one set of hearing costs. The appeal was therefore allowed.