Kapur Chand Jain vs B. S. Grewal and Others
Rewritten Version Notice: This is a rewritten version of the original judgment.
Court: Supreme Court of India
Case Number: Civil Appeal No. 833 of 1962
Decision Date: 6 November 1964
Coram: M. Hidayatullah, P.B. Gajendragadkar, K.N. Wanchoo
In the matter titled Kapur Chand Jain versus B. S. Grewal and others, the Supreme Court of India delivered its judgment on 6 November 1964. The judgment was authored by Justice M. Hidayatullah and the bench was composed of Justices M. Hidayatullah, P. B. Gajendragadkar and K. N. Wanchoo. The case is reported in the 1965 volume of the All India Reporter at page 1491 and also appears in the 1965 Supreme Court Reports (Second Series) at page 36. The dispute concerned the application of the Punjab Security of Land Tenures Act, 1953 (Punjab Act 10 of 1953), specifically sections 9(1)(ii) and 14A(1) and 14A(ii), which deal with non‑payment of rent and the question of whether conduct that occurred before the Act’s commencement could be considered in determining a lack of sufficient cause for such non‑payment. The petitioner, Kapur Chand Jain, was the lessee of certain agricultural lands owned by the respondents, who were the landlords. During the lease term covering the years 1951 to 1955, the lessee repeatedly attempted to avoid paying the annual rent, offering different pretexts each year, and the landlords were forced to recover the rent through separate court actions for each year. After the lease expired, the lessee continued to occupy the land without paying rent. Consequently, the landlords filed two separate applications with the appropriate authorities: one under section 14A(ii) seeking recovery of arrears of rent and another under section 14A(1) seeking eviction, relying in part on section 9(1)(ii) which states that a tenant who fails to pay rent regularly without sufficient cause may be evicted. The lessee complied with the order to pay the arrears within the time prescribed, but the application for eviction was initially dismissed. The respondents appealed that dismissal and obtained an order directing the eviction of the lessee. The lessee thereafter sought further relief by filing a revision application and a petition before the High Court under Articles 226 and 227 of the Constitution; all of those proceedings were dismissed.
The appeal before the Supreme Court raised two principal points of contention. First, the lessee argued that section 9(1)(ii) should operate only prospectively, and therefore conduct that occurred before the enactment of section 14A in 1955 could not be taken into account in determining whether there was a sufficient cause for non‑payment of rent. Second, the lessee contended that having paid the arrears within the time fixed by the authorities, he could not lawfully be evicted. The Court held that, although the lessee could not be evicted under section 14A(ii), the circumstances of the case fell within the ambit of section 14A(1), and eviction was therefore permissible because the irregularity in rent payment was evident and there was no sufficient cause for such irregularity. The Court explained that the prerequisite for applying section 9(1)(ii) may arise even before the Act came into force and that past conduct, which is as relevant to the provision as conduct after the Act’s commencement, cannot be disregarded. Moreover, the Court observed that a statute is not applied retrospectively merely because a part of the criteria for its operation is derived from a moment prior to its passage. The overall scheme of the Punjab Security of Land Tenures Act shows that clauses (1) and (ii) of section 14A serve entirely different purposes and do not conflict with each other.
(ii) provides for eviction as a penalty when a tenant fails to comply with an order to deposit rent arrears within the time fixed for payment, whereas clause (1) authorizes eviction for any of the reasons listed in section 9(1), one of which is the regular non‑payment of rent without sufficient cause, as specified in section 9(1)(ii). The Court then recorded the following matter for consideration. This was a civil appeal, numbered 833 of 1962, taken on special leave from an order dated 9 March 1961 of the Punjab High Court in civil writ number 291 of 1961. Counsel for the appellant were B. R. L. Iyengar and T. S. Venkataraman, while counsel for respondent No. 4 were Bishan Narain, S. K. Mehta and K. L. Mehta. The judgment was delivered by Justice Hidayatullah. The appellant had obtained, from the fourth respondent identified as Raja Charanjit Singh, a lease of 208 canals of agricultural land for a period of five years, beginning with the Rabi season of 1951 and ending with the Kharif season of 1955, at an annual rent of Rs. 7,500. The lease deed was duly registered and executed on 20 November 1950, and the appellant paid Rs. 7,500 as advance rent for the first year. One of the conditions of the lease required the Raja to place a tube well on the land into working order, and the lease was to commence on the date that the tube well became operational. The tube well was repaired on 11 July 1951, and the lease was consequently deemed to have commenced on that date. The appellant later claimed that the tube well failed to deliver the appropriate quantity of water, which gave rise to disputes, and as a result the appellant ceased to pay rent for the subsequent years. On 15 August 1952 the Raja instituted a suit seeking recovery of Rs. 7,500 as rent for the Rabi and Kharif seasons of 1951, contending that the amount already paid should be retained as a deposit to be adjusted against the final payment. The appellant contested this claim on the basis that the tube well was not functioning in accordance with the lease terms. The suit was decreed on 23 March 1957, and a sum of Rs. 859‑4‑0 was adjudged due. The decree reflected the effect of the Punjab Security of Land Tenures Act, 1953, which had come into force on 15 April 1953; under section 12 of that Act the rent payable by a tenant could not exceed one‑third of the crop of the land or the value of the crop as prescribed by the Rules. For the relevant period the value of the produce was assessed at Rs. 4,313, and after deducting various payments owed to the Raja the decree amounted to the stated figure. The appellant promptly satisfied that amount. Nevertheless, the appellant failed to pay rent for the years 1952, 1953 and 1954. Consequently, on 5 January 1955 the Raja filed another suit seeking recovery of Rs. 22,500 as arrears for those three years, and on 8 October the suit proceeded further.
On October 8, 1956 the Raja filed a revised application under section 14‑A(ii) of the Punjab Security of Land Tenures Act, 1953, seeking recovery of rent arrears dating back to 1955. While that suit was pending, the appellant was directed to pay a sum of Rs 7,000, which he deposited on 22 January 1957. Subsequent assessment under section 12 of the Act determined that the total amount due was Rs 13,378‑2‑0, and the appellant paid the remaining balance on 21 June 1957. It was recorded that the appellant had failed to pay rent for the year 1955, and although his lease terminated after the Kharif season of 1955, he remained in possession of the land and also omitted payment for the Rabi season of 1956.
On 10 October 1956 the Raja submitted an application under section 14‑A(1) requesting eviction of the appellant on the ground, inter alia, that the appellant had persistently failed to pay rent without sufficient cause. Section 14‑A(1) required that an eviction application be presented to an Assistant Collector of First Grade, whereas the recovery of arrears application filed on 8 October 1956 fell under section 14‑A(ii) and was therefore to be dealt with by an Assistant Collector of Second Grade. Consequently, the issue of eviction on the basis of irregular rent payment was heard in one forum, while the proceedings for recovery of arrears were heard in a separate forum.
The eviction proceedings under section 14‑A(1) concluded on 24 December 1958 in the appellant’s favour. The Assistant Collector, First Grade, at Jullundur held that the appellant possessed sufficient cause for not paying the rent stipulated in the lease deed, and therefore the Raja could not obtain an order of eviction on that ground. The Raja appealed this decision. On 20 May 1959 the Collector of Jullundur District reversed the earlier order and directed that the appellant be evicted. The appellant’s subsequent appeal to the Commissioner of Jullundur Division was dismissed, as was his application for revision before the Financial Commissioner, Punjab. The appellant then approached the High Court of Punjab at Chandigarh invoking Articles 226 and 227 of the Constitution. A Division Bench dismissed his petition summarily on 9 March 1961. Following that dismissal, the appellant filed the present appeal by special leave.
Section 14‑A of the Punjab Security of Land Tenures Act, 1953 provides that, notwithstanding any contrary provisions in other laws and subject to section 9‑A, a land‑owner who wishes to eject a tenant must submit a written application to the Assistant Collector of First Grade, who shall then proceed in accordance with sub‑section (2) of section 10 and the provisions of sub‑section (3) of the same section, while preserving the tenant’s rights to compensation or acquisition of occupancy rights under the Punjab Tenancy Act, 1887. Conversely, a land‑owner seeking recovery of rent arrears must apply in writing to the Assistant Collector of Second Grade, who shall thereafter issue a notice as required by the Act.
The provision mandates that the Assistant Collector, Second Grade, who has jurisdiction, must serve a written notice in the prescribed form on the tenant. The notice requires the tenant, within the period fixed therein, either to deposit the rent or its monetary value if the rent is payable in kind, or to produce evidence that the rent has already been paid, or to demonstrate that the tenant is not liable for the whole or any part of the rent, or to show that the landlord has refused to receive the rent or to issue a receipt. If, after a summary determination as outlined in sub‑section (2) of section 10 of this Act, the Assistant Collector finds that the tenant has neither paid nor deposited the rent, the Collector is empowered to evict the tenant summarily and to restore possession of the land to the land‑owner.
Further, where a landlord either refuses to accept rent from the tenant, demands rent in excess of what the Act permits, or fails to give a receipt, the tenant may inform, in writing, the Assistant Collector, Second Grade, having jurisdiction of such circumstances. Upon receipt of such an application, the Collector must issue a written notice directing the landlord to accept the rent due under the Act, to give a receipt where appropriate, or to do both, and must require compliance within sixty days of the notice.
In this connection, the Court quoted the relevant provisions of section 9, which state that, notwithstanding any other law in force, a land‑owner is not competent to eject a tenant unless the tenant (i) occupies land reserved under this Act or is a tenant of a small land‑owner, (ii) fails to pay rent regularly without sufficient cause, (iii) is in arrears of rent at the commencement of this Act, or (iv) … (v) … (vi) … (vii) … The explanation to clause (iii) clarifies that a tenant is deemed to be in arrears at the commencement of the Act only if the arrears are not paid within two months of the date of the notice of execution of a decree or order directing payment of such arrears.
Section 10 prescribes the procedure to be followed when a landlord makes an application under this Act; however, the Court observed that the procedural requirements of section 10 need not be reiterated because no dispute arose concerning the correct procedure. The Court noted that the first clause of section 14‑A is a general provision enabling a land‑owner to apply for eviction of his tenant on any of the grounds enumerated in section 9. The second clause is primarily intended to allow a land‑owner to recover rent arrears, while providing that the tenant may be ordered to be evicted if, after the rent is determined, the tenant fails to pay within the time fixed by the Collector. Clause (iii) empowers a tenant to inform the Collector of a landlord’s refusal to accept rent or of a demand for rent that exceeds the amount prescribed by the Act.
In this case, the Court observed that the Rules governing the determination of the value of produce under section twelve of the Act had not come into force until May nineteenth, nineteen fifty‑three. The appellant had relied on this fact to argue before the Court that his failure to pay rent arose solely because he could not determine the exact rent in the manner prescribed by section twelve and the Rules. The Court found that this argument contradicted the appellant’s earlier statement that he had tendered the amount to the landlord but the landlord had refused to accept it. The Court explained that the appellant’s claim was not credible, because if the landlord really had declined the payment, the appellant would have been obligated to inform the Assistant Collector under section fourteen‑A clause three and to seek protection, which he had not done. Consequently, the Court concluded that the appellant had intentionally taken advantage of the new Act to avoid paying rent.
The Court noted that in the first year the appellant asserted that the tubewell was not functioning in accordance with the agreement, and therefore withheld rent. In the subsequent years he contended that he was required to pay only one‑third of the produce or its determined value. For each year a fresh suit had to be instituted, and recoveries were obtained only through the court process. The Court held that this pattern of behaviour fell squarely within the conduct described in section nine, sub‑section one, clause two, which provides a ground for eviction of a tenant under section fourteen‑A, sub‑section one. Counsel for the respondent, Mr Iyengar, argued that section nine, sub‑section one, clause two should be applied only prospectively and that the tenant’s conduct prior to the enactment of section fourteen‑A could not be considered. The Court rejected that view, stating that although a statute is generally applied prospectively, it is not applied retrospectively when a condition for its operation originates from a time before the statute was passed. The Court explained that the clause in question makes a particular type of conduct the basis for an eviction petition, and the requisite condition may arise even before the Act commenced. Therefore, past conduct that is as relevant as conduct after the Act’s commencement could not be ignored, and the Tribunals were correct in taking into account the appellant’s behaviour before section fourteen‑A came into force when assessing whether the appellant was irregular in his rent payments.
Mr Iyengar further contended that under clause two of section fourteen‑A the appellant had been directed to pay the arrears of rent and that he had complied within the time fixed, thus precluding any order of eviction. The Court clarified that clause two deals with eviction as a penalty for failure to obey a court order, whereas clause one deals with eviction on any of the grounds enumerated in section nine, sub‑section one. One of those grounds is the tenant’s failure to pay rent regularly without sufficient cause. Accordingly, eviction under the second clause is intended for non‑compliance with an order to deposit arrears, while eviction under the first clause is a penalty for the tenant’s repeated failure to pay rent on a regular basis without a satisfactory reason.
The Court explained that eviction under the first clause of Section 14‑A functioned as a penalty for a tenant who failed to pay rent regularly without having sufficient cause, and who also failed to pay the rent within the time fixed for payment. It observed that the two clauses of Section 14‑A were placed on different footing, and that the legislative scheme of the Act assigned different tribunals to decide each of those issues. The appellant sought to have all the pending proceedings consolidated before a single court, yet at the same time he requested that the specific suit for recovery of rent arrears be stayed. The Court inferred that his purpose was plainly to avoid liability under Section 0 on the ground that he could not pay the rent until one and one‑third of its amount, as determined pursuant to the Rules. The Court noted that the appellant had claimed he was prepared to pay the additional amount but that the landlord had not received it.
It was evident that the appellant had avoided payment over the years by invoking various pretexts, and the tribunals were correct in holding that he had failed to demonstrate any sufficient cause for his non‑payment. Indeed, a concurrent finding by the High Court and the three subordinate tribunals that the appellant had no sufficient cause would have been adequate to dispose of the matter. The Court allowed the argument to be considered only because counsel for the appellant contended that the conditions for eviction under the two clauses of Section 14‑A were inconsistent. Upon examination, it was apparent that the reasons for eviction under the two clauses were entirely different. The appellant could not be evicted pursuant to the second clause of Section 14‑A, but the Court found that his situation fell squarely within the first clause.
The irregularity in his rent payments was patent, and he had offered no sufficient cause for such irregularity. Accordingly, the appeal failed and was dismissed with costs awarded against the appellant. The appeal was dismissed.