Delhi High Court
Atma Ram Properties (P) Ltd. vs P.S. Jain Company Ltd. on 20 December, 1994
Equivalent citations: 1995IAD(DELHI)356, 57(1995)DLT131, 1995(33)DRJ178
Author: R.C. Lahoti
Bench: R.C. Lahoti
JUDGMENT R.C. Lahoti, J.
(1) This order proposes to dispose off the following preliminary issue No.2 :- " Whether this Court has jurisdiction to try this suit in view of Section 50 of the Delhi Rent Control Act?"
(2) The plaintiff has filed the suit for eviction of the defendant/tenant, impleading the sub-tenants also invoking the jurisdiction of Civil Court on the ground that the premises are fetching monthly rent exceeding Rs. 3,500.00p.m. and so the provisions of Delhi Rent Control Act, 1958 (hereinafter 'the Act', for short) are excluded. The contention of the tenant, on the other hand is that in so far as he and the landlord-plaintiff are concerned, the agreed rent of the premises does not exceed Rs. 3,500.00 and so Section 3(c) of the Act would not apply, the rent paid or payable by the sub-tenant to the tenant being irrelevant for the purpose of determining the applicability of the Act to a suit between a landlord and a tenant.
(3) Vide registered deed of lease dated 5th January, 1978 the suit premises were let out by the predecessor-in-title of the landlord-plaintiff to the tenant defendant No.1 on a monthly rent of Rs. 900.00 with the effect from 1st June, 1977. The deed authorises the tenant to sub-let the premises. The tenant has inducted defendants No.2 to 5 as sub-tenants. The rent realised by the tenant from the sub-tenants in respect of the tenancy premises exceeds Rs. 44,500.00 per month.
(4) Section 3 of the Act in so far as relevant for the purpose of this suit is as under :- "3.Act not to apply to certain premises -- Nothing in this Act shall apply: (c) to any premises, whether residential or not whose monthly rent exceeds Rs. 3,500.00.
(5) It is clear that if it is held that the premises in the suit are one whose monthly rent exceeds Rs. 3,500.00 the suit for ejectment would lie before a Civil Court without attracting protection against eviction under Section 14 of the Act. If not, then the suit shall have to be thrown-out as not maintainable; the suit being entertainable only by a controller and that too on the availability of one or more of the grounds for recovery of possession contemplated by Section 14 of the Act. Section 50 excludes the jurisdiction of Civil Court to try any suit which under the Act the Controller is empowered to decide.
(6) A strange but interesting situation has propped-up for consideration. Premises have been let out by the landlord to a tenant at a monthly rent not exceeding Rs. 3,500.00. The tenant has sub-let the premises exercising the right to sub-let conferred by the terms of tenancy. The monthly rent realised by the tenant from the sub-tenants in respect of the very same premises exceeds Rs. 3,500.00.
(7) Clause (c) in Section 3 has been inserted by Amending Act No.57 of 1988 which came into force w.e.f. 1.12.88. Constitutional validity of the amendment was challenged, but the same has been upheld by the Supreme Court in D.C. Bhatia & Ors. Union of India & Ors., . Their Lordships have held that the term rent is used in the provision in its dictionary meaning and not as standard rent. Their Lordships have further held that though the Act was enacted to provide for the control of rent and eviction and of rates of hotels and lodging house etc. and in that sense was intended to protect the tenants, the amending act has a different purpose altogether. The various objects of the amendment include bringing about a balance between the interests of landlords and tenants and also giving a boost to house building activity. Whether a particular section of people requires protection or not has to be determined at any given point of time. The challenge laid to the validity of the classification on the basis of rent payable about the premises has been repelled by their Lordships holding that a person who can afford to pay more than Rs. 42,000.00 a year by way of rent will be by any standard affluent person in society. He cannot be said to belong to the weaker section of the community. Their Lordships have further held that classification may be done on income basis or rental basis or some other basis and all such classifications are valid as they provide an understandable basis having regard to the object of the statute.
(8) Section 3(c) of the Act does not speak of classification on the basis of rent received or paid by any person or individual; it speaks of premises whose monthly rent exceeds Rs. 3,500.00. Thus the same premises so long as their monthly rent does not exceed Rs. 3,500.00 shall enjoy the protection by applicability of the Act. No sooner the monthly rent exceeds Rs. 3,500.00, the act would cease to apply as the exclusion clause would be attracted.
(9) In Bhatia Co-operative Housing Society VS. D.C.Patel, , interpreting an exclusionary clause in a Bombay Act their Lordship have said, -- "the Legislature did not intend to exempt the relationship of landlord and tenant but intended to confer on the premises belonging to Government an immunity from the operation of the Act." So also in Nagji Vallabhji & Co. VS. Meghji Vejpar & Co., their Lordship have held, --"the exemption granted is in respect of the premises and not in respect of the relationship."
(10) Inspite of the main Act having been enacted to protect the tenants assuming them to be weaker section of the soceity, wisdom dawned upon the Legislature to enact a provision taking out the premises carrying a monthly rent exceeding Rs. 3,500.00 from the ken of the Act because in its opinion such premises would not be enjoyed/occupied by persons belonging to weaker section of the society. In the case at hand the tenant having obtained the premises at a monthly rent not exceeding Rs. 3,500.00 did enjoy the protection of the Act. The protection is capable of being foregone in both the ways : the tenant may himself agree to enhance the rent so as to exceed Rs. 3,500.00 per month or he may sub-let the premises at monthly rent exceeding Rs. 3,500.00. In either case the rent of the premises would exceed Rs. 3,500.00 per month and that would attract the applicability of Section 3(c). A view to the contrary would create anamolous situation. Though the premises are in fact earning monthly rent exceeding Rs. 3,500.00 yet Section 3 would not apply. So also in respect of the same premises in a suit filed by the landlord against the tenant Section 3(c) would not apply but if a suit was to be filed by the tenant against sub-tenant in respect of the same very premises, Section 3(c) would apply. The applicability of the Act would then have to be determined on the basis of persons and not the premises -- a basis not intended by the Legislation. Even otherwise just as observed by their Lordships in D.C. Bhatia's case (supra) a person paying Rs. 42,000.00 a year cannot be weaker section of the society, so also a person earning Rs.42,000.00 a year cannot be weaker section of the society.
(11) Though rent is not defined in the Act, clause (l) of Section 2 defines a 'tenant' to include a sub- tenant and clause (e) defines a landlord to mean a person who for the time being is receiving or is entitled to receive the rent of any premises. In so far as the meaning of the term rent is concerned, there is no distinction between the rent paid by a tenant to a landlord and the rent paid by a sub-tenant to a tenant.
(12) Premises whose rent exceeds Rs. 3,500.00 whether paid by a tenant to landlord or by a sub-tenant are covered by Section 3(c) of Delhi Rent Control Act. To begin with, the premises may be leased out for Rs. 3,500.00 or less a month and may not be covered by Section 3(c), the day rent paid or payable in respect of those premises would exceed Rs.3,500.00 whether by a tenant to a landlord or by a sub-tenant to a tenant, the premises would be caught in the net of Section 3(c) of the Act.
(13) As the suit premises are earning rent more than Rs.3,500.00 a month, the applicability of Section 3(c) of the Act is attracted. The suit is held to be maintainable before Civil Court. Issue stands answered accordingly.