Rafiquennessa vs Lal Bahadur Chetri (Dead)
Rewritten Version Notice: This is a rewritten version of the original judgment.
Court: supreme-court
Case Number: Civil Appeal No. 549 of 1962
Decision Date: 24 February 1964
Coram: P.B. Gajendragadkar, K.N. Wanchoo, J.C. Shah, N. Rajagopala Ayyangar, S.M. Sikri
In this matter the petition was filed by Rafiquennessa against the estate of the late Lal Bahadur Chetri, represented by his legal representatives. The petition was decided by the Supreme Court of India on 24 February 1964. The bench comprised Chief Justice P B Gajendragadkar together with Justices K N Wanchoo, J C Shah, N Rajagopala Ayyangar and S M Sikri. The case is reported in the 1964 All India Reporter at page 1511 and in the Supreme Court Reports (Six) at page 876. The citation also appears in several later reports. The operative legislation in the dispute was the Assam Non‑Agricultural Urban Areas Tenancy Act of 1955, specifically section 5 of that Act.
The appellant, having been the owner of a parcel of land, sued the lessee—who was the predecessor of the respondents—for ejectment after the lessee failed to surrender possession when the lease term ended. The lease contained a covenant permitting the lessee to construct a residential house on the leased premises. The trial court ruled in favour of the appellant and issued a decree for possession. The lessee appealed the decree. While the appeal was pending, the Assam Non‑Agricultural Urban Areas Tenancy Act was enacted. Subsequently the lessee sought the benefit of section 5, requesting permission to acquire an additional ground. Earlier, the High Court had held that section 5 applied to proceedings already pending when the Act came into force. The appellate court accepted the lessee’s request, set aside the trial judge’s decree and granted the appeal, concluding that two houses had been built by the lessee within five years of the lease and that this entitled the lessee to rely on section 5. The High Court, on further appeal, affirmed its earlier view that section 5 was applicable to pending proceedings, dismissed the appeal summarily, but issued a certificate permitting a further appeal to the Supreme Court.
The Supreme Court examined the question of retroactivity of statutory provisions. It held that a statute operates retroactively only when its language expressly declares such an effect or when the intention to apply it retroactively can be clearly inferred from the wording and context, referring to the principle articulated in the case of Athlumney ex parte Wilson. The Court further observed that the language of the 1955 Act demonstrated a clear legislative intention that the protective provisions should extend not only to leases created after the Act’s commencement but also to those executed before it. The purpose of section 5 was identified as safeguarding tenants who had erected permanent structures—whether for business or residence—provided such construction occurred within five years of the tenancy agreement, even if the buildings were erected prior to the Act’s enactment. Finally, the Court concluded that any suit pending when the Act became effective would be governed by its provisions, and likewise an appeal arising from a suit decided before the Act’s commencement would be subject to section 5(1)(a) if the appeal remained pending after the Act’s commencement.
Section 5(1)(a) of the Assam Non‑Agricultural Urban Area Tenancy Act, 1955 is applicable not only to proceedings that originated after the Act came into force but also to appeals that arise from suits which were decided before the Act’s commencement, provided that such appeals remain pending after the date on which the Act became operative. The provision likewise governs any appeal that is pending as a continuation of the original suit, meaning that the legislative intent to protect tenants extends to those cases that were already in progress when the statutory scheme was introduced.
The matter before the Supreme Court concerned two civil appeals, numbered 549 of 1962 and 569 of 1963, each arising from judgments and orders of the Assam High Court dated 1 August 1958 and 13 March 1959 respectively. The appeals were certified by the Assam High Court and were listed for hearing on 24 February 1964. The judgment was delivered by the Chief Justice. Counsel for the appellant in the first appeal were instructed to represent the petitioner, while counsel for the respondents were instructed to represent the multiple respondents designated as 1(a) to 1(e). In the second appeal, separate counsel represented the appellant and the respondent. The core issue presented to the Court concerned the construction and effect of section 5 of the Assam Non‑Agricultural Urban Area Tenancy Act, 1955. The Court observed that the material facts giving rise to the two appeals were essentially identical, and therefore a detailed repetition of the factual background for each appeal was unnecessary. The Court therefore elected to set out the facts in a concise manner while focusing on the common point of law that required determination. The appellant, identified as Mst. Rafiquennessa, had instituted an ejectment suit against the predecessor of the respondents. It was established that Lal Bahadur Chetri had executed a registered lease deed in favor of the appellant on 14 February 1946, conveying an open plot of land and granting the lessee the right to construct a residential house. The lease was scheduled to terminate on 12 February 1952, at which time the lessee was obliged to surrender vacant possession of the land. A notice to quit was served requiring the lessee to vacate on that date, but the lessee failed to comply. Consequently, the appellant filed suit for eviction, case number 149 of 1952, alleging that the lessee had breached the lease by subletting the premises he had built, thereby providing an additional ground for eviction. The sub‑lessees were joined as defendants, but only the lessee Chetri contested the suit, while the sub‑tenants did not raise any issue. The trial judge ruled in favor of the appellant, prompting the lessee Chetri to appeal the decree before the Sub‑Judge of the Lower Assam District, Gauhati.
In the earlier proceedings the lessee, Chetri, challenged the validity and correctness of the decree that had been passed against him by filing Civil Appeal No. 24‑1953. While this appeal was still pending, the Assam Land‑Tenancy Act was enacted and its provisions were published in the Assam Gazette on 6 July 1955. When the appeal subsequently came up for hearing before the lower appellate Court, the tenant submitted an application requesting that an additional ground under section 5 of the Act be allowed to be taken in support of his case. Prior to the filing of that application the Assam High Court had expressed the view that the provision of section 5 was applicable to the eviction proceedings that were then pending between landlords and tenants; that view formed the basis on which Chetri sought to support his appeal. The lower appellate Court accepted the tenant’s request, framed a new issue arising from it and remitted the matter to the trial Court for a factual determination. On the remand the trial Court took testimony, carried out a local inspection and concluded that the two houses that had been proved to have been constructed by the tenant should be regarded as permanent in relation to the locality of the plot. However, the trial Court also observed that there was no evidence establishing the dates on which those houses had been built. The tenant challenged that part of the finding before the lower appellate Court. Ultimately the lower appellate Court allowed the appeal, set aside the decree that had been issued by the trial Judge in favor of the appellant and held that the two houses had been constructed by the tenant within five years of the commencement of the lease, thereby entitling the lessee to claim the benefit of section 5 of the Act. The appellant then lodged a second appeal in the High Court of Assam (No. 86‑1958). Relying on its earlier decision regarding the applicability of section 5 to pending proceedings, the High Court dismissed the appeal summarily. After that dismissal the appellant obtained a certificate from the High Court and, armed with that certificate, filed the present appeal before this Court. During the pendency of these proceedings the tenant Chetri died; his heirs and legal representatives, including Mst. Tulsa Devi and others, were subsequently joined as respondents. The sole question that now arises for determination is whether the Assam High Court was correct in holding that the provisions of section 5 applied to the proceedings that were pending before the lower appellate Court at the relevant time. A separate matter, Appeal No. 569‑1963, arose out of a suit filed by the appellant Wahedulla against his tenant Abdul Hamid, and the facts were analogous to those in Civil Appeal No. 549‑1962. In that case as well, the Act came into force while the appeal was pending before the lower appellate Court, and the application of section 5 resulted in the respondent’s claim to continue in possession being upheld and the appellant’s claim for eviction being rejected.
In this case, the High Court issued a certificate to the appellant after being told that the appellant intended to challenge the correctness of the Court’s earlier decision that section 5 of the Assam Urban Tenancy Act applied to the proceedings that were pending at that time. The appellant’s claim for ejectment had been rejected, and the certificate was granted so that the appellant could seek a review of that earlier finding.
The Act in question had been enacted by the Assam Legislature with the purpose of regulating, in certain respects, the relationship between landlords and tenants where the land involved was non‑agricultural and situated in urban areas of the State of Assam. The statute comprises fourteen sections, and its overall scheme, as reflected in its operative provisions, is to provide protection to tenants by setting out rules that govern various aspects of their relationship with landlords concerning the lands covered by the Act.
Section 3 of the Act contains several definitions that are essential to its operation. Clause (c) defines a “landlord” as a person immediately under whom a tenant holds, expressly excluding the Government from that definition. Clause (d) defines a “permanent structure” in relation to any locality as a structure that is regarded as permanent in that locality. The terms “tenant” and “urban area” are defined respectively by clauses (g) and (b) of the same section.
Section 4 imposes on the tenant an obligation to pay rent for the holding at rates that are fair and equitable. The proviso to that section provides that, in the event of a dispute about what constitutes a fair rent, the rent that the tenant paid immediately before the dispute arose shall be deemed to be fair and equitable unless a competent court decides otherwise. Section 6 provides for compensation for improvements made by the tenant; section 7 deals with the enhancement of rent by contract; section 8 deals with rent enhancement without a contract; section 9 authorises the court to make an order regarding rent enhancement; section 10 prohibits illegal rent realization beyond the prescribed amount; section 11 provides for notice required for ejectment; section 12 prescribes the procedure for serving such notice; and section 13 confers on the State Government the power to make rules for the implementation of the Act. Section 14 repeals the earlier Tenancy Act.
Having outlined the general scheme of the Act, the Court turned to section 5, whose effect was the principal point of controversy between the parties. Section 5(i) reads as follows: “Notwithstanding anything in any contract or in any law for the time being in force—(a) where, under the terms of a contract entered into between a landlord and his tenant, whether before or after the commencement of this Act, a tenant is entitled to build, and has in pursuance of such terms actually built within the period of five years from the date of such contract, a permanent structure on the land of the tenancy for residential or business purposes, or where a tenant not being so entitled to build has actually built any such structure on the land of the tenancy for any of the purposes aforesaid with the knowledge and acquiescence of the landlord, the tenant shall not be ejected by the landlord from the tenancy except on the ground of non‑payment of rent; (b) where…”
Section 5 of the Act provided that when a tenant had made improvements on the tenancy land without a contractual right to do so, the landlord could not evict the tenant unless the landlord paid the tenant reasonable compensation for those improvements. Sub‑section (2) further barred the eviction of any tenant from the tenancy land except where a competent civil court had issued a decree for ejectment. Sub‑section (3) added that even in the case of a decree for ejectment based on non‑payment of rent, the execution of that decree was prohibited for a period of thirty days from the date of the decree. During those thirty days, the tenant was allowed to deposit with the executing court the full amount of rent due under the decree, after which the decree would be recorded as satisfied.
Mr Chatterjee argued that the Assam High Court erred in holding that the pending proceedings between the parties at the appellate stage on 6 July 1955, the date when the Act became operative, were to be governed by the provisions of section 5. He contended that on the date the appellant filed the suit, he had already obtained a right to eject the tenant under the terms of the tenancy agreement. Consequently, he maintained that where a statutory provision affects vested rights, the provision should ordinarily be interpreted as applying prospectively rather than retrospectively, unless the provision deals solely with procedural matters. He acknowledged that the legislature possesses the power to withdraw vested rights through retrospective legislation, and likewise can enact statutes that override and materially alter the terms of existing contracts. However, he argued that unless the legislature expresses a clear and unambiguous intention to give a provision retroactive effect, especially where such retroactivity would impact vested rights, the provision should not be applied retroactively. He described these principles as unexceptionable and asserted that, as a matter of law, they cannot be contested.
Mr Chatterjee relied on observations made by Wright J. in In re Athlumney Ex parte Wilson, wherein the learned judge stated that the general rule is that when the legislature modifies the rights of parties by creating or removing a cause of action, the enactments do not affect pending actions unless they expressly state so. Wright J. added that an exception exists when the enactments concern only procedural matters and do not extend to substantive rights of action; in such cases, the enactments apply to existing rights. The Court noted that to articulate the applicable rule of construction for assessing the effect of statutory provisions in this context, it was necessary to consider that retroactive operation of a statute may be inferred when the statute’s language and context demonstrate a clear intention to apply it retroactively.
The Court observed that the retroactive operation of a statutory provision could be inferred even where such operation was not expressly stated, noting that a provision was regarded as retroactive either when it declared retroactivity in clear terms or when the intention to apply it retroactively was evident from the language used and the surrounding context. Applying these principles, the Court first examined section 2 of the Act, which stipulated that, notwithstanding anything contained in any contract or in any law then in force, the provisions of the Act would apply to all non‑agricultural tenancies regardless of whether they were created before or after the date on which the Act came into force. This clause demonstrated that the legislature intended the beneficial provisions of the Act to protect not only leases executed after the Act’s commencement but also those leases that had been executed prior to that date. In effect, leases that existed before the Act was operative were meant to receive the advantages of the Act, thereby affecting the vested rights of landlords who had let their urban properties to tenants before the Act’s inception. The Court regarded this observation as a crucial fact for determining the scope and effect of section 5. Section 5 itself gave an unmistakable indication of the legislature’s intention to make its provisions retrospective. The provision protected tenants who had, within five years of the date of a lease executed in their favour, constructed permanent structures on the leased land for residential or business purposes. That protection was available whether the construction was carried out by the tenant in accordance with the lease terms or even without any such term, provided the landlord knew of the construction and acquiesced in it. Consequently, the plain object of section 5 was to safeguard tenants who had built permanent structures for either business or residence, as long as such structures were erected within five years of the tenancy contract. Therefore, cases involving permanent structures that had been built within five years of the contract fell within the ambit of section 5(1)(a), even though those constructions had been completed before the Act became effective. The scheme of subsection 5(1)(a) clearly postulated an extension of protection to constructions already in existence, a point that was significant in resolving the controversy between the parties. Additionally, section 5(1)(a) provided that the tenant shall not be evicted by the landlord from the
In this case, the statutory provision states that a tenant may not be evicted from the tenancy except on the ground of non‑payment of rent, provided that the conditions prescribed by the provision are satisfied. The Court observed that, had the legislature intended the protection to apply only to future suits, it could have expressed the rule by stating that a tenant shall not be sued in ejectment. Such wording would have clearly limited the protection to actions instituted after the enactment of the Act and would have introduced a prospective element. Instead, the provision expressly prohibits the eviction of the tenant, and therefore the Court concluded that the section must operate to protect the tenant even at the appellate stage. When the appellate court is hearing proceedings in which the landlord is seeking to evict the tenant, those proceedings are inevitably governed by the provision, even though the original suit may have been instituted before the Act came into force.
The Court further noted that an appeal pending before a lower appellate court is merely a continuation of the original suit. Consequently, there is no obstacle to holding that a suit which was pending at the moment the Act became operative is subject to the provision, and that an appeal arising from a suit decided before the Act but remaining pending after the commencement date is likewise covered, provided the appeal itself is pending after the Act took effect. On this basis, the Court expressed satisfaction that the Assam High Court was correct in concluding that the dispute between the parties in the present matter must be decided in accordance with the provisions of the statutory clause.
The parties agreed that, if the provision is held to apply, the decrees issued against the appellants in both appeals cannot be successfully challenged. Accordingly, the Court found that the appeals must fail. The Court therefore dismissed both appeals and ordered that the costs of the proceedings be awarded to the respondents. The hearing on the matter was thus concluded and the appeals were dismissed.