Purpose of the Rent Act:

The East Punjab Rent Restrictions Act 1949 is a complete legislation in itself which lays down complete procedure for adjudication of disputes between landlords and tenant and provides for classification of buildings as residential, non residential, scheduled as well as rented land. It further lays down the exhaustive procedure for protection of tenants from unscrupulous landlords, but also lays down detailed and exhaustive grounds under Section 13, Section 13-A and Section 13-B whereby the landlord could seek the eviction of his tenant.

Grounds of Eviction enumerated in Sec: 13 of the Rent Act:

A) Arrears of rent

Note : In Haryana Rent Act, Arrears of Rent can be claimed only for last three years whereas there is no such embargo in Punjab Rent Act.

Main Judgment on Non-Payment of Rent:

“Rakesh Wadhawan v. M/s Jagdamba Industrial Corporation & Others” – 2002(1) R.C.R (Rent) 514

B) Subletting

C) Change of User

D) Material Impairment

E) Nuisance

F) Cease to Occupy for continuous period of 4 month without sufficient cause

G) Bonafide Personal Necessity

Earlier a landlord could seek eviction of his tenant only from a residential building in cases of bonafide need but subsequently even the non residential buildings came within the preview of bonafide need.

“Harbilas Rai Bansal v. The State of Punjab & Anr” (AIR 1996 SC 857)

Two basic mandatory Ingredients required to be pleaded in cases of Bonafide Personal Necessity:

13(3)(a)(i)

(b) he is not occupying another residential building in the urban area concerned

(c) he has not vacated such a building without sufficient cause after the commencement of the Act, in the said Urban Area. “Banke Ram v. Smt. Sarasti Devi” – AIR 1977 P&H 158 (Full Bench)

However the strict proposition of pleading of the ingredients in an ejectment petition has been diluted to a larger extent by various subsequent judicial pronouncements.

“Gurbaj Singh v. Parshotam Singh” – 2011(2) R.C.R (Rent) 349.

Section 13(A)

Special Right given to Specified Landlords defined under Section 2(hh) (Government Employees) for seeking summary Eviction of their tenants.

Section 13(B)

Special Right given to N.R.I’s defined under Section 2(dd) for seeking summary Eviction of their tenants.

Main Judgment : “Baldev Singh Bajwa v. Mohnish Saini” – 2005(12) SCC 778

Section 18-A

Provides for procedure of summary disposal of cases under Section 13(A) and Section 13(B).

Under Section 18-A(8), there is no provision of filling appeal before Ld. Appellate Authority, only revision can be filed before the Hon’ble High Court in cases filed under 13-A and 13-B.

Section 18-A lays down strict procedure for obtaining leave to contest in cases filed under Section 13-A and Section 13-B.

Summons issued in such cases have to be as per “Schedule II” making Leave to defend to be filed mandatory within a period of 15 days from the date of service, failing which eviction order is to be passed automatically.

Important Judgments under Section 18-A:

“Anwar Ali v. Gian Kaur” – 2011(2) R.C.R (Rent) 604 (Full Bench)

“Om Parkash v. Ashwani Kumar Bassi” – 2010(9) SCC 183.

“Precision Steel and Engineering Works v. Prem Deva Niranjan Dea Tayal” – 1982(3) SCC 270.

Note:

There is no special provision of N.R.I’s in Haryana Rent Act.

The tenancy laws in India are considered as “pro-tenant” but due to intervention of our judiciary through various landmark judgments, a sort of balance has been created upholding the rights of landlords in cases related to the eviction of tenants.

Rent controller not to be treated as civil courts but persona designata, under the Act, who are free to design their own procedure, and strict principles of Code of Civil Procedure are not applicable to them.

Powers of Appeal and Revision are provided in Section 15:

Section 15(2) – Appeal

Section 15(5) – Revision before the Hon’ble High Court.

Main Judgment on Revisional Jurisdiction:

“Hindustan Petroleum Corporation Limited v. Dilbahar Singh” – 2014(9) SCC 78 – Five Judges Bench.

Appellate Authority under the Rent Act cannot Remand the matter to the Rent Controller but can either call for the report or examine on its own.

Raghu Nath v.Romesh Duggal,(P&H) (D.B.) – 1980 AIR (PB) 188

Concept of Mesne Profits:

The concept of Mesne Profits was introduced by the Hon’ble Apex Court in the case titled as “M/s. Atma Ram Properties (P) Ltd. v. M/s. Federal Motors Pvt. Ltd” reported as 2005(1) SCC 705.

The Hon’ble Apex Court observed that the tenant having suffered a decree or order for eviction may continue his fight before the superior forum but, on the termination of the proceedings and the decree or order of eviction first passed having been maintained, the tenancy would stand terminated with effect from the date of the decree passed by the lower forum. That the appellate Court has power to put the tenant-appellant on terms and direct the appellant to compensate the landlord by payment of a reasonable amount which is not necessarily the same as the contractual rate of rent. With the passing of the decree for eviction, the tenant is liable to pay mesne profits or compensation for use and occupation of the premises at the same rate at which the landlord would have been able to let out the premises and earn rent if the tenant would have vacated the premises. The landlord is not bound by the contractual rate of rent effective for the period preceding the date of the decree.

Important Judgments on the issue of Mesne Profits:

• M/s. Atma Ram Properties (P) Ltd. v. M/s. Federal Motors Pvt. Ltd” – 2005(1) SCC 705.

• Anderson Wright & Co v. Amarnath Roy 2005(1) RCR (Rent) 624

• State of Maharashtra v. M/s Super Max International Pvt. Ltd. – 2009(2) RCR (Rent) 246

• Mohammad Ahmad and Another v. Atma Ram Chauhan and others – 2011(1) R.C.R.(Rent) 394.

• Angoori Devi and others v. Smt. Satya Bhama – 2016(5) R.C.R (Civil) 1043.

Mode of Determination:

“Surinder Kumar v. Rattan Lal” – 2006 (2) RCR (Rent) 26

New Rent Act: Punjab Rent Act, 1995

That with the passage of time the East Punjab Rent Restriction Act 1949 has also been replaced by the Punjab Rent Act of 1995, which has come into force w.e.f. 30.11.2013 and as per section 75 of the 1995 Act, the East Punjab Urban Rent Restriction Act, 1949 (East Punjab Act No. III of 1949), stands repealed provided there are certain exceptions as enumerated in Section 75.

Features of the Punjab Rent Act 1995-

(i) The Act provides for the regulation of rents, repairs and maintenance and eviction relating to premises and matters connected therewith in the State of Punjab. The Act applies only to the tenancies which have been created after the commencement of the new Act (except in case of NRI landlord).

(ii) Section 3 provides where the operation of the Act is exempted. Further, under section 3(2), contractual nonresidential tenancies will be governed by the terms of the contract during the subsistence of the contract.

(iii) Section 4 provides all new tenancies after the commencement of the Act are required to be through a registered agreement.

Important Judgment :

M/s A.R Ventures v. M/s Roop Square Pvt. Ltd. – 2021(2) R.C.R (Rent) 276.

(iv) The right of inheritance of tenancy of residential premises is governed by section 5 which lays down that inheritance is now limited to 10 years from the death of the tenant and is restricted to the heirs who are dependent upon and residing with the tenant, who have no other alternative accommodation. In the case of nonresidential tenancies, property is required to be vacated within one year of death of the tenant or dissolution of the tenant firm as the case may be.

(v) As per section 6 the agreed rent shall be increased by five per cent of the last rent for two years and third year increase shall be based upon the increase in the Consumer Price index over the corresponding three years.

(vi) The Act for the first time lays down the duties and obligations of the landlord and the tenant as stated in Section 17 and 18.

(vii) The scope of ejectment of the tenant has been widened with the introduction of new grounds of eviction under sections 20 and 26 which provide for the grounds of ejectment as follows:

(a) Arrears of rent

(b) Change of user

(c) Cease to occupy the premises

(d) Premises having become unfit and unsafe (with a right of election to re-enter on reconstruction)

(e to h) Premises required by landlord for immediate demolition or for development works or repairs or additions with a right to re-entry by tenant.

(i) Availability of alternate accommodation with tenant or family member

(j) The tenant has ceased to be an employee of the landlord

(k) Substantial damage or alteration by the tenant

(l) Conviction of tenant for nuisance or annoyance or immoral or illegal activity

(m) Breach of the condition by the tenant imposed on the landlord by the Government

(n) Denial of the ownership of landlord, when such denial is not bona fide

(o) person in occupation of premises failed to prove he is bonafide tenant.

(p) Failing to vacate on the agreed date under an agreement

(q) Personal necessity of the landlord or any member of his family if the landlord or such person has no other reasonable suitable accommodation, after 3 years of purchase or transfer.

(viii) Section 21 to section 24 enumerates the special category of landlords entitled to immediate ejectment of premises let out by landlord, spouse or dependent son or daughter as under-

(a) Landlord whose allotment has been cancelled by Government agencies in case of residential premises

(b) A retiring member of armed forces or dependent of a martyr

(c) Central and State Government employees

(d) Widow

(e) handicapped persons,

(f) old persons,

(g) freedom fighters, his widow or dependent son or daughter

(h) non-resident Indians

(ix) Section 24(3) dealing with NRI landlords the term used is “returns to India for permanent residence“. The mandatory ownership condition of 5 years before filling of Eviction Petition by NRI as well as bar of getting only one building vacated is also not there as it was mandated earlier under Rent Act of 1949.

(x) Under Punjab Rent Act, 1995, the tenant has been provided multiple remedies which will delay the eviction process. E.g. Section 38(7)(e) provide that tenant will be entitled to file a review petition within ten days of the rejection of the application for leave to defend. Then after the dismissal of the review, tenant can file the appeal under Section 50 of the Punjab Rent Act, 1995 even in cases of summary nature.

(xi) Partial ejectment has been permitted pursuant to the consent of the landlord under section 20(3)

(xii) Under section 32 special provisions have been incorporated for recovery of possession in respect of corporate bodies or a public institution as landlord.

Tribunals Abolished by the Division Bench of our Hon’ble High Court which were created earlier:

Initially, the Act provided that the Rent Authority/tribunal will have the power to determine the dispute under the new Act. However, after a PIL titled as Bar council of Punjab and Haryana v. State of Punjab bearing CWP No: 25507 of 2013 filed in the High Court, the said creation of Tribunals were washed off.

Section 67 provides for penalties for contravention of provisions of the Act and for the first time the Act also provides penalty in form of fine and imprisonment for sub letting.

Section 75 provides that all cases in respect of the premises, other than owned by a non-resident Indian, let out prior to the commencement of this Act shall be governed and disposed of in accordance with the provisions of the old Act so repealed.

Important Judgment Interpreting provisions of East Punjab Urban Rent Restriction Act, 1949 and Punjab Rent Act, 1995 in cases of N.R.I’s (Upheld by Hon’ble Apex Court),

“Krishan Kumar v. Kamla Devi” 2016(1) R.C.R. (Rent) 525.

Rent Legislations have been the subject matter of a lot of criticism and a continuous discussion has been going on over the years debating the advantages and disadvantages of rent laws in India. While the proponents of rent control laws claim that the rent control legislation protects the tenants from the unscrupulous landlords and prevent landlords from charging exorbitant rents and evicting tenants without any sufficient cause. On the other hand, the opponents state that the rent laws impose unnecessary stringent conditions on the landlords and deny the landlords to get appropriate rental value or push them towards endless litigation in order to get the premises vacated.

As per Census 2011, there were a total of 27.37 million rented households in India, of which 79.4% or 21.72 million are urban rented households. Due to the rapid industrial and economic development taking place in the country, migration to urban areas has increased many folds. Every year, millions move to towns and cities, or dense linear settlements along national and state highways. However today there is a steep decline in the number of people living in rented accommodation. According to the Economic Survey 2017-18, 12% of the total housing stock in urban India remains vacant. There are deep systemic problems within the rental market and addressing them is of utmost importance for solving India’s enormous housing challenge.

Archaic Rent Laws– Due to the out-dated rental laws in India and the nature of the provisions contained therein, it discourages the landlords from renting out their properties as the rents are abysmally low and the long litigation period makes eviction difficult. Resultantly in major cities lot of properties have become unviable to be maintained and are being allowed to crumble rather than rent out the same.

The Rent Control legislations, post-independence were initially introduced with the objective to counteract the inequality of bargaining power between landlords and tenants. The regulations outlined in some of the State-enacted Rent Control Acts prevented landlords from charging market-based increase in rents and tenants kept paying rent at rates that were frozen years ago. The landlord-tenant relationship in India has always been a very complicated subject and despite tenancy and rent-related laws in India, things have not improved and have rather deteriorated. The tenancy laws in India are considered as “pro-tenant” but due to intervention of our judiciary through various landmark judgments, a sort of balance has been created upholding the rights of landlords in cases related to the eviction of tenants.

In the budget speech in 2019, Finance Minister Nirmala Sitharaman, proposed the Model Tenancy Act to replace the ageing rental laws of the country, stating that “they do not address the relationship between the lessor and the lessee realistically and fairly“.

Under the Indian Constitution, the enactment and implementation of rent control laws is the responsibility of the individual States. In the State of Punjab in particular, the British enacted The Punjab Rent Restriction Act 1941. The said Act was replaced by The Punjab Urban Rent Restriction Act 1947. After the partition of the country in 1947, the East Punjab Rent Restrictions Act 1949 was enacted. This Act remained in force for almost 64 years and saw several transformations and modifications due to legislative amendments and judicial interpretations until it gave way to The Punjab Rent Act 1995 in the year 2013.

The 1949 Act faced severe criticism due to several reasons which included flawed provisions, onerous and limited grounds of ejectment, ineffective provisions, the lengthy legal process involved, unrealistic rent fixation etc.

Salient features of the Punjab Rent Act 1995– To overcome the shortcomings of the earlier Act, the revised Act was originally conceived in 1995, however, the Government had been sitting on implementation of the Act despite President assent since 1998 and the Act was never notified. The Act of 1995 finally came into effect on 30.11.2013 with the following Statement of objects & reasons:

“The National Housing Policy recognises the importance of expanding the availability of rental housing in urban areas. It is recognised that the rent control legislation in different States has resulted in stagnating rents, low returns on investment in rental housing, difficulty for landlords to resume possession in genu ine cases, and deteriorating housing stock. In order to solve the above problems and ensure a balance of interests of landlords and tenants, the Government of India, Ministry of Urban Development, have formulated the Model Rent Control Legislation and advised the States to amend their Rent Control Acts or enact new laws on the lines of the above-referred Model Rent Control Legislation. Hence this Bill.“

(i) The Act provides for the regulation of rents, repairs and maintenance and eviction relating to premises and matters connected therewith in the State of Punjab. The Act applies only to the tenancies which have been created after the commencement of the new Act (except in case of NRI landlord). Further as per section 4, all new tenancies after the commencement of the Act are required to be through a registered agreement. Further, under section 3(2), contractual non-residential tenancies will be governed by the terms of the contract during the subsistence of the contract.

(ii) The right of inheritance of tenancy of residential premises is governed by section 5 which lays down that inheritance is now limited to 10 years from the death of the tenant and is restricted to the heirs who are dependent upon and residing with the tenant, who have no other alternative accommodation. In the case of non-residential tenancies, property is required to be vacated within one year of death of the tenant or dissolution of the tenant firm as the case may be.

(iii) The outdated and redundant concept of fair rent under the old Act had been discarded and as per section 6 the agreed rent shall be increased by five per cent of the last rent for two years and third year increase shall be based upon the increase in the Consumer Price index over the corresponding three years.

(iv) The Act for the first time lays down the duties and obligations of the landlord and the tenant as stated in section 17 and 18

(v) The scope of ejectment of the tenant has been widened with the introduction of new grounds of eviction under sections 20 and 26 which provide for the grounds of ejectment as follows:

(a) Arrears of rent

(b) Change of user

(c) Misuse

(d) Ceasing to occupy the premises

(e) Premises having become unfit and unsafe (with a right of election to re-enter on reconstruction)

(f) Premises required for development works or repairs or additions (with a right of election to re-enter on completion of works)

(g) Availability of alternate accommodation with tenant or family member

(h) Substantial damage or alteration subject to repairs by the tenant

(i) The tenant has ceased to be an employee of the landlord

(j) Conviction of tenant for nuisance or immoral or illegal activity

(k) Denial of the title of landlord, when such denial is not bona fide

(l) Failing to vacate on the agreed date under an agreement

(m) Breach of the condition imposed by the Government

(n) Personal necessity of the landlord or any member of his family if the landlord or such person has no other reasonable suitable accommodation, after 3 years of purchase or transfer.

(o) Subletting without the previous consent in writing of the landlord. The Act also provides for fine and imprisonment in case of subletting.

(vi) Section 21 to section 24 enumerates the special category of landlords entitled to immediate ejectment of premises let out by landlord, spouse or dependent son or daughter as under-

(a) Landlord whose allotment has been cancelled by Government agencies in case of residential premises

(b) A retiring member of armed forces or dependent of a martyr

(c) Central and State Government employees

(d) Widow

(e) handicapped persons,

(f) old persons ,

(g) freedom fighters, his widow or dependent son or daughter

(h) non-resident Indians

(vii) Act also introduces fixed term tenancy for a period of less than 5 years with the prior permission of rent controller under section 30 with the remedy of ejectment on the expiry of the period of tenancy.

(viii) Partial ejectment has been permitted pursuant to the consent of the landlord under section 20(3)

(ix) Under section 32 special provisions have been incorporated for recovery of possession in respect of corporate bodies or a public institution as landlord.

(x) Act provides for summary proceedings for ejectment along with the time frame to be followed at all stages of the proceedings.

Lack of Foresight – Already the Act has seen two massive amendments vide the Punjab Rent (Amendment) Act, 2013 (Punjab Act No. 33 of 2013) and the Punjab Rent (Amendment) Act, 2014 (Punjab Act No. 23 of 2014) whereby about 1/3rd of the provisions of the Act were repealed. Initially, the Act provided that the Rent Authority/tribunal will have the power to determine the dispute under the new Act. However, after a PIL titled as Bar council of Punjab and Haryana v. State of Punjab filed in the High Court, the operation of provisions providing such procedure was stayed by the Court. Thereafter the Government came up with various amendments and the old existing mechanism of adjudication by Rent Controllers /Appellate Authority comprised of judicial officers was retained. That besides the advantage of having the adjudication by judicial officers, the effectiveness of maintaining the same mechanism which was the bane of the old Act, would determine the future course of the Act of 1995.

Further, despite the notification of the 1995 Act, there is confusion about the applicability of the provisions of the 1995 Act to the existing proceedings. Section 75 provides that all cases in respect of the premises, other than owned by a non-resident Indian, let out prior to the commencement of this Act shall be governed and disposed of in accordance with the provisions of the old Act so repealed. The High Court in Krishan Kumar v. Kamla Devi, 2016(1) R.C.R. (Rent) 525 held that NRI landlords seeking ejectment under the special category will have to file fresh petitions under the new Act or amend the existing petitions to bring them in consonance with the new Act. A similar view was expressed in another decision of the High court in Randhir Singh v. Ranjodh Singh Mudhar, 2018(1) R.C.R. (Rent) 189. However in Adess Singh v. Manpreet Singh, 2020 (1) PLR 158 the court has made contrary observations. Still further in M/s Puran Singh v. Komal Sharma 2019(2) R.C.R. (Rent) 380 the court held that ordinary eviction petitions (other than NRI landlord) which have been pending prior to the commencement of the Act of 1995 will be governed and decided under the old Act. This anomaly due to the language of section 75 has created two categories in respect of pending petitions and needs to be rectified as it is likely to cause enormous confusion and wastage of court hours.

The procedure under the new Act still remains cumbersome. All orders, even interim order have been made appealable. The tenant has been provided multiple remedies which will delay the eviction process. E.g. Section 38(7)(e) provide that tenant will be entitled to file a review petition within ten days of the rejection of the application for leave to defend. The observations of the court in Krishan Kumar v. Kamla Devi, 2016(1) R.C.R. (Rent) 525 give an impression that that final order of ejectment is to be passed after the expiry of 10 day period of filing of review and decision thereof. On the other hand in Civil Revision No.236 of 2019 Inderpreet Kaur and another v. Manjit Kaur Shahi through her GPA-Kuldeep Singh, decided on 28.5.2020, though this argument was raised by the tenant, the revision was dismissed by the court without going into the merits of the argument as an appeal was pending before the Appellate Authority. This leaves us with the question as to whether the Rent Controller is obligated to put the proceedings in abeyance till the expiry of 10 day period before passing the final order or it is just a limitation period provided for availing the remedy of review. This issue is bound to arise in every case and needs to be deliberated and settled as early as possible.

Section 2(l) defined SFC as two different premises. This will again make the ejectment difficult and increase the cost of litigation as two petitions will be required to be filed for eviction from complete SCF.

Still further as per section 24(3) dealing with NRI landlords the term used is “returns to India for permanent residence”. This could be interpreted to mean that the permanent return of NRI is a condition precedent before he can file an ejectment petition. This is again likely to give rise to an intense debate in as much as in the absence of similar expression in the old Act, the courts have held that NRI is not required to permanently return to India before seeking ejectment under the special provision.

Yet again no provision has been made for imposing market rent or mesne profits during the operation of an interim order in appeal after ejectment. Provisions of CPC are applicable to the Rent authorities under the Act for limited purposes as laid down under section 37 of the Act. This difficulty was faced by the courts under the old Act however the same was redressed by judicial precedents. It seems a similar course would be required to be adopted under the new Act.

The blanket restriction of 3 years on the landlord, from the date of acquisition of the property by transfer, for seeking eviction in case of personal necessity is highly unreasonable. The legislature ought to have provided for an exemption in suitable cases. This restriction will cause unnecessary hardship to landlords in genuine and deserving cases.

Surprisingly the statute lacks any clear provision for seeking eviction from vacant land except when required for construction as the definition of term “premises” only refers to a building or a part of the building and not to vacant land.

No provision has been incorporated regarding recognising and regulating rental management agencies that can professionally manage and rent out properties on behalf of the owners. This is a new concept which is likely to crop up in the future.

The Way Forward– That Punjab Rent Act 1995 is new legislation which has made tremendous changes in the rent regulations in the State of Punjab, however, it is still at a nascent stage. Courts will have to ensure that they are not trapped in the endless gamut of rules of CPC as was the situation in the proceedings under the old Act. There is negligible case law to support the intended implication of the various provisions of the new Act at the moment which makes the task of the courts all the more difficult ,as provisions and the expressions contained in the Act will be put to scrutiny through innovative legal arguments. Although subsequent amendments have further tweaked the Act for the better, it will be years before the legislation is fully developed and all disputes regarding interpretation of the statute are decisively settled but nevertheless, this is a step in the right direction though treading on thin ice.

(The Author is a practicing advocate in the High Court of Punjab and Haryana at Chandigarh and the views and opinions expressed are personal only)

The meaning of the word “mesne profits” as defined in the Webster Dictionary is – profits (as from crops) earned by one in wrongful possession of property.

This word is often used as a legal tool, asserting to be a legal right, to recover the gains(profits), from a person who is in wrongful possession of the land/ property, by way of compensation or damages.

Under the present modern landlord and tenant laws, the concept of mesne (pronounced `mean’) profits travels from the medieval origins of the feudal system, wherein all land was owned by the King. He would dole it out to his barons on the terms that they provided him with soldiers whenever he wanted to raise an army. Soon this customised into a way of raising money by charging rent for the land from the barons. In turn, the barons would let out a part of the land to farmers, who would pay rent – usually in kind, by providing livestock or crops – on being permitted to keep some of the produce for themselves. This way the concept of chains of tenancies was born.

The person to whom the farmer paid his rent came to be known as the `mesne landlord’. The word meant `intermediate’ in old French (a bit like the mean of two numbers) and used to be spelt `meen’. It metamorphosed into the present spelling through the middle ages.

Thus, the phrase was originally `mesne rents and profits’ meaning all the rent or profit from the land that could be extracted by the intermediate landlord.

Mesne profits has also been defined under the Code of Civil Procedure 1908, Section 2(12) as :- “means profits” of property means those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received therefrom, together with interest on such profits, but shall not include profits due to improvements made but the person in wrongful possession.”

Because the word rent has acquired a special meaning in modern property law, the phrase `mesne profits’ is now also used for the claim of compensation that a landlord sets up, after a tenancy has been brought to an end, but the tenant has failed to vacate the tenanted premises/land. It signifies that while the occupier is no longer a tenant, the landlord remains entitled to be compensated for the tenant’s continued occupation. It is now also, sometimes substituted by the phrase `damages for use and occupation’.

The concept of Mesne Profits under the Rent Law was laid down by the Hon’ble Supreme Court in M/S. Atma Ram Properties (P) Ltd v. M/S. Federal Motors Pvt. Ltd 2005 (1) RCR (R) 1

Whereby it was held that by the Hon’ble court:

“(1) while passing an order of stay under Rule 5 of Order 41 of the Code of Civil Procedure, 1908, the appellate Court does have jurisdiction to put the applicant on such reasonable terms as would in its opinion reasonably compensate the decree-holder for loss occasioned by delay in execution of decree by the grant of stay order, in the event of the appeal being dismissed and in so far as those proceedings are concerned. Such terms, needless to say, shall be reasonable;

(2) in case of premises governed by the provisions of the Delhi Rent Control Act, 1958, in view of the definition of tenant contained in clause (l) of Section 2 of the Act, the tenancy does not stand terminated merely by its termination under the general law; it terminates with the passing of the decree for eviction. With effect from that date, the tenant is liable to pay mesne profits or compensation for use and occupation of the premises at the same rate at which the landlord would have been able to let out the premises and earn rent if the tenant would have vacated the premises. The landlord is not bound by the contractual rate of rent effective for the period preceding the date of the decree;

(3) the doctrine of merger does not have the effect of postponing the date of termination of tenancy merely because the decree of eviction stands merged in the decree passed by the superior forum at a latter date. “

The said judgement was followed by various High Courts and in many other subsequent judgements of the Supreme Court of India.

It was also held in Anderson Wright And Co. v. Amar Nath Roy And Ors. AIR 2005 SC 2457:

“5. As held by this Court in Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., once a decree for eviction has been passed, in the event of execution of decree for eviction being stayed, the appellants can be put on such reasonable terms, as would in the opinion of the appellate court reasonably compensate the decree holder for loss occasioned by delay in execution of the decree by the grant of stay in the event of the appeal being dismissed. It has also been held that with effect from the date of decree of eviction, the tenant is liable to pay mesne profits or compensation for use and occupation of the premises at the same rate at which the landlord would have been able to let out the premises on being vacated by the tenant. While determining the quantum of the amount so receivable by the landlord, the landlord is not bound by the contractual rate of rent which was prevalent prior to the date of decree.

6. The learned counsel for the appellants submitted that the appellants cannot be held liable to pay anything more than the standard rent of the premises, in spite of the decree for eviction having been passed as the same is subjudice. This submission needs a summary dismissal in view of the Judgment of this Court in Atma Ram Properties (P) Ltd.’s case (supra). Both the parties have filed affidavit and counter affidavit, placing on record material giving the Court an idea of the rate of rent generally prevalent in the locality where the suit property is situated. Canara Bank on the first floor of this building is paying rent @ Rs. 25/- per sq. ft. other than maintenance and municipal taxes. One Rumpa Ghosh entered as the tenant in the year 2002 is paying rent @ Rs. 32/- per sq. ft. Taking an overall view of the material made available by the parties, we think that the appellants should, from the date of the decree of the eviction, pay mesne profits/compensation for use and occupation @ Rs. 15/- per sq. ft. subject to final determination of the same by a competent forum.”

The said principle was further confirmed by the Apex Court in State of Maharashtra v. M/s. Super Max International Pvt. Ltd., 2009 (2) RCR (R) 246

“45. In Atma Ram Properties the Court viewed the issue exactly in the same way (See paragraphs 6, 8 & 9 of the decision). Further, the decision also answers Mr. Lalit’s submission that the tenancy did not come to end on the passing of the decree but would continue until the tenant was actually physically evicted from the premises in execution of the decree. In Atma Ram Properties the Court framed two issues arising for consideration as follows:

“This submission raises the following two issues : (i) in respect of premises enjoying the protection of rent control legislation, when does the tenancy terminate; and (ii) up to what point of time is the tenant liable to pay rent at the contractual rate and when does he become liable to pay compensation for use and occupation of the tenancy premises unbound by the contractual rate of rent to the landlord ?”

The Court answered the first issue as follows:

“We are, therefore, of the opinion that the tenant having suffered a decree or order for eviction may continue his fight before the superior forum but, on the termination of the proceedings and the decree or order of eviction first passed having been maintained, the tenancy would stand terminated with effect from the date of the decree passed by the lower forum. In the case of premises governed by rent control legislation, the decree of eviction on being affirmed, would be determinative of the date of termination of tenancy and the decree of affirmation passed by the superior forum at any subsequent stage or date, would not, by reference to the doctrine of merger have the effect of postponing the date of termination of tenancy.”

The second issue was answered as:

“With effect from that date (the passing of the decree of eviction), the tenant is liable to pay mesne profits or compensation for use and occupation of the premises at the same rate at which the landlord would have been able to let out the premises and earn rent if the tenant would have vacated the premises. The landlord is not bound by the contractual rate of rent effective for the period preceding the date of the decree.” (words in parenthesis added)

We are in respectful agreement with the decision of the Court in Atma Ram Properties.

46. In light of the discussions made above we hold that in an appeal or revision preferred by a tenant against a order or decree of an eviction passed under the Rent Act it is open to the appellate or the revisional Court to stay the execution of the order or the decree on terms, including a direction to pay monthly rent at a rate higher than the contractual rent. Needless to say, that in fixing the amount subject to payment of which the execution of the order/ decree is stayed, the Court would exercise restraint and would not fix any excessive, fanciful or punitive amount.”

Thus it was laid down that once the tenant has been ejected by way of an ejectment decree, then the appellate court under Order 41 Rule 5, CPC, has the jurisdiction to stay such ejectment on such terms and conditions as it deems fit, and the tenant shall be liable to pay the mesne profits at the prevailing market rate for the use and occupation of such premises.

The ratio laid down in Atma Ram Properties, Anderson Wright and Super Max cases, Supra, was followed by the Punjab and Haryana High Court in various judgements under the East Punjab Rent Restriction Act, 1949, (hereinafter referred to as th Act), holding that once an ejectment has been ordered, then the Landlord is entitled to claim mesne profits from the tenant, and the appellate authority, while granting stay of ejectment order, can put the tenant on such terms and conditions, so as to make him liable for payment of rent at the market rate.

Two of the judgements on the point, rendered by Punjab and Haryana High Court, are 2015 RCR (R) 337 and 2013 RCR (R) 344.

It would be pertinent to point out at this stage that the various judgements rendered by the Punjab and Haryana High Court, for fixation of mesne profits, are based on the principles, as enunciated by the judgement of the Apex Court in Atma Ram Property Case, Supra. The said case was a matter under the Delhi Rent Control Act 1958, wherein, there is no specific provision for staying the ejectment order, against which the appeal has been preferred, therefore for the purpose of passing a stay order, the provisions of Code of Civil Procedure, 1908, are applicable. It would be appropriate to reproduce the relevant paragraphs of the said judgement:

“6. The order of eviction passed by Rent Controller is appealable to the Rent Control Tribunal under Section 38 of the Act. There is no specific provision in the Act conferring power on the Tribunal to grant stay on the execution of the order of eviction passed by the Controller, but sub-section (3) of Section 38 confers the Tribunal with all the powers vested in a Court under the Code of Civil Procedure, 1908 while hearing an appeal. The provision empowers the Tribunal to pass an order of stay by reference to Rule 5 Order 41 of the Code of Civil Procedure 1908 (hereinafter ‘the Code’, for short). This position was not disputed by the learned senior counsel appearing for either of the parties.

7. Sub-Rules (1) and (3) of Rule 5 Order 41 of the Code read as under: –

“Rule 5 – Stay by Appellate Court – (1) An appeal shall not operate as a stay of proceedings under a decree or order appealed from except so far as the Appellate Court may order, nor shall execution of a decree be stayed by reason only of an appeal having been preferred from the decree; but the Appellate Court may for sufficient cause order stay of execution of such decree.

xxx xxx xxx xxx

(3) No order for stay of execution shall be made under sub-rule (1) or sub-rule (2) unless the court making it is satisfied –

(a) that substantial loss may result to the party applying for stay of execution unless the order is made;

(b) that the application has been made without unreasonable delay; and

(c) that security has been given by the applicant for the due performance of such decree or order as may ultimately be binding upon him.

xxx xxx xxx xxx”

8. It is well settled that mere preferring of an appeal does not operate as stay on the decree or order appealed against nor on the proceedings in the court below. A prayer for the grant of stay of proceedings or on the execution of decree or order appealed against has to be specifically made to the appellate Court and the appellate Court has discretion to grant an order of stay or to refuse the same. The only guiding factor, indicated in the Rule 5 aforesaid, is the existence of sufficient cause in favour of the appellant on the availability of which the appellate Court would be inclined to pass an order of stay. Experience shows that the principal consideration which prevails with the appellate Court is that in spite of the appeal having been entertained for hearing by the appellate Court, the appellant may not be deprived of the fruits of his success in the event of the appeal being allowed. This consideration is pitted and weighed against the other paramount consideration : why should a party having succeeded from the Court below be deprived of the fruits of the decree or order in his hands merely because the defeated party has chosen to invoke the jurisdiction of a superior forum. Still the question which the Court dealing with a prayer for the grant of stay asks to itself is : Why the status quo prevailing on the date of the decree and/or the date of making of the application for stay be not allowed to continue by granting stay, and not the question why the stay should be granted.

9. Dispossession, during the pendency of an appeal of a party in possession, is generally considered to be ‘substantial loss’ to the party applying for stay of execution within the meaning of clause (a) of sub-rule (3) of Rule 5 Order 41 of the Code. Clause (c) of the same provision mandates security for the due performance of the decree or order as may ultimately be passed being furnished by the applicant for stay as a condition precedent to the grant of order of stay. However, this is not the only condition which the appellate Court can impose. The power to grant stay is discretionary and flows from the jurisdiction conferred on an appellate Court which is equitable in nature. To secure an order of stay merely by preferring an appeal is not the statutory right conferred on the appellant. So also, an appellate Court is not ordained to grant an order of stay merely because an appeal has been preferred and an application for an order of stay has been made. Therefore, an applicant for order of stay must do equity for seeking equity. Depending on the facts and circumstances of a given case an appellate Court, while passing an order of stay, may put the parties on such terms the enforcement whereof would satisfy the demand for justice of the party found successful at the end of the appeal. In South Eastern Coalfields Ltd. v. State of M.P. & Ors., (2003)8 SCC 648, this Court while dealing with interim orders granted in favour of any party to litigation for the purpose of extending protection to it, effective during the pendency of the proceedings, has held that such interim orders, passed at an interim stage, stand reversed in the event of the final decision going against the party successful in securing interim orders in its favour; and the successful party at the end would be justified in demanding compensation and being placed in the same situation in which it would have been if the interim order would not have been passed against it. The successful party can demand (a) the delivery to it of benefit earned by the opposite party under the interim order of the High Court, or (b) compensation for what it has lost, and to grant such relief is the inherent jurisdiction of the Court. In our opinion, while granting an order of stay under Order 41 Rule 5 of the CPC, the appellate court does have jurisdiction to put the party seeking stay order on such terms as would reasonably compensate the party successful at the end of the appeal in so far as those proceedings are concerned. Thus, for example, though a decree for payment of money is not ordinarily stayed by the appellate Court, yet, if it exercises its jurisdiction to grant stay in an exceptional case it may direct the appellant to make payment of the decretal amount with interest as a condition precedent to the grant of stay, though the decree under appeal does not make provision for payment of interest by the judgment-debtor to the decree-holder. Robust common sense, common knowledge of human affairs and events gained by judicial experience and judicially noticeable facts, over and above the material available on record – all these provide useful inputs as relevant facts for exercise of discretion while passing an order and formulating the terms to put the parties on. After all, in the words of Chief Justice Chandrachud, speaking for the Constitution Bench in Olga Tellis and Ors. v. Bombay Municipal Corporation and Ors., 1986 RRR 290 (SC) : (1985)3 SCC 545, – “commonsense which is a cluster of life’s experiences, is often more dependable than the rival facts presented by warring litigants”.

Thus, the basis of grant of mesne profits was the provisions of CPC Order 41 rule 5.

At this stage, it would be relevant to compare the provisions of Appeal, under the Delhi Rent Control Act, 1958, and under the East Punjab Rent Restriction Act, 1949.

Delhi Rent Control Act, 1958:

S.38. Appeal to the Tribunal.-(1) An appeal shall lie from every order of the Controller made under this Act [only on questions of law] to the Rent Control Tribunal (hereinafter referred to as the Tribunal) consisting of one person only to be appointed by the Central Government by notification in the Official Gazette:

[Provided that no appeal shall lie from an order of the Controller made under section 21.]

(2) An appeal under sub-section (1) shall be preferred within thirty days from the date of the order made by the Controller:

Provided that the Tribunal may entertain the appeal after the expiry of the said period of thirty days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.

(3) The Tribunal shall have all the power vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when hearing an appeal.

East Punjab Rent Restriction Act 1949

Section 15-(1)(a) The ^[1][State] Government may, by a general or special order, by notification confer on such officers and authorities as they think fit, the powers of appellate authorities for the purposes of this Act, in such area or in such classes of cases as may be specified in the order.

(b) Any person aggrieved by an order passed by the Controller may, within fifteen days from the date of such order or such longer period as the appellate authority may allow for reasons to be recorded in writing, prefer an appeal in writing to the appellate authority having jurisdiction. ^[2][In computing the period of fifteen days the time taken to obtain a certified copy of the order appealed against shall be excluded.].

(2): – On such appeal being preferred, the appellate authority may order stay of further proceedings in the matter pending decision on the appeal.

A bare comparison of the above mentioned provisions, under the two enactments, would clearly reveal that while there is no provision of grant of stay under the Delhi Rent Control Act, 1958, and under section 38(3) of the said Act, the provisions of CPC are specifically made applicable, however in The East Punjab Rent Restriction Act, 1949, under section 15(2) thereof, there is a clear provision of grant of stay of ejectment order appealed from, and therefore, the strict provisions of CPC are not applicable for the grant of the interim relief.

It may also be noticed here that though Rent controller and Appellate Authority, as constituted under the East Punjab Act, have powers to adjudicate the disputes between landlords and tenants, but they are not be treated as civil courts, as under CPC. They are merely to be treated as persona designata, under the said Act, who are free to design their own procedure, and strict principles of Code of Civil Procedure are not applicable to them. Refer to M/s Pitman’s Shorthand Academy v. M/s B Lila Ram and Sons 195- PLR 1 (FB), Raghu Nath v. Romesh Duggal, (P&H) (D.B.) 1980 AIR (PB) 188 and Sawan Ram v. Gobinda Ram and anr. 1980 AIR Punjab 106 (FB).

The Punjab and Haryana High Court in the case of Vijay Kumar and another v. Rahul Malhotra 2015 (2) RCR (C) 80, had, although, noticed an argument, wherein the said distinction was pointed out, as follows:

“5. Counsel for the petitioners has argued that the Appellate Authority could not have assessed the mesne profits and the application should have been filed before the Rent Controller who would have allowed opportunity to both the parties to lead evidence and thereafter, the mesne profits could not have been assessed. In this regard, he has referred to an order of the Supreme Court in the case of M/s Bird Travels (P) Ltd. v. Smt. Amarjit Kaur and others, Civil Appeal No. 4589 of 2012 (Arising out of S.L.P. (Civil) No. 3299 of 2012), decided on 11.05.2012. – He has also submitted that the order of stay passed by the Appellate Authority is under Section 15(2) of the Act which is unlike Order 41 Rule 5 (3) of the Code of Civil Procedure, 1908 (hereinafter referred to as the “CPC”) and has also submitted that the judgment of the Supreme Court in the case of M/s. Atma Ram Properties (P) Ltd. v. M/s. Federal Motors Pvt. Ltd., 2005(1) R.C.R.(Rent) 1 : 2005(1) R.C.R.(Civil) 212 is not applicable as in the said case, stay was granted under Order 41 Rule 5 of the CPC in which conditions were there for payment of mesne profits.”

However, relying upon Atma Ram Properties case the said revision petition was dismissed holding that:

“10. The conclusions which were summed up by the Supreme Court in M/s. Atma Ram Properties (P) Ltd.’s case (supra) are as under: –

“(1) while passing an order of stay under Rule 5 Order 41 of the Code of Civil Procedure, 1908, the appellate Court does have jurisdiction to put the applicant on such reasonable terms as would in its opinion reasonably compensate the decree-holder for loss occasioned by delay in execution of decree by the grant of stay order, in the event of the appeal being dismissed and in so far as those proceedings are concerned. Such terms, needless to say, shall be reasonable;

(2) in case of premises governed by the provisions of the Delhi Rent Control Act, 1958, in view of the definition of tenant contained in clause (1) of Section 2 of the Act, the tenancy does not stand terminated merely by its termination under the general law; it terminates with the passing of the decree for eviction. With effect from that date, the tenant is liable to pay mesne profits or compensation for use and occupation of the premises at the same rate at which the landlord would have been able to let out the premises and earn the same rate at which the landlord would have been able to let out the premises and earn rent if the tenant would have vacated the premises. The landlord is not bound by the contractual rate of rent effective for the period preceding the date of the decree.

(3) the doctrine of merger does not have the effect of postponing the date of termination of tenancy merely because the decree of eviction stands merged in the decree passed by the superior forum at a latter date.”

11. The argument raised by counsel for the petitioners that in M/s Bird Travels (P) Ltd.’s case (supra), the Supreme Court has remanded the case back to the Rent Controller to decide and as such all cases are to be decided by the Rent Controller for the purpose of deciding the question of mesne profits is not acceptable because in that case, the Supreme Court was of the view that the fixation of mesne profits requires evidence from both the sides and thus the matter was remanded back to the Rent Controller to decide the question of mesne profits after holding proper inquiry by allowing the parties to lead their respective evidence. However, in the present case, the Appellate Authority, while dealing with the application for payment of mesne profits by the landlord, allowed the parties to lead their respective evidence in which the landlord led evidence by way of lease deed of SCO No. 6, Sector 11-D, Chandigarh, which has been let out @ Rs. 1.5 lacs per month, whereas the demised premises in the present case is SCF No. 21 in the same Sector 11 of Chandigarh for which the mesne profits has been fixed by the Appellate Authority to the tune of Rs. 1 lac only. Since no evidence was led by the petitioners-tenants, therefore, they cannot have a grievance and ask for determination of mesne profits by the Rent Controller in terms of the order passed by the Apex Court in M/s Bird Travels (P) Ltd.’s case (supra).”

As noticed above, there is a stark and a substantial distinction between the two enactments i.e. Delhi Act and the East Punjab Act. Further, it is apparent that Atmaram Case, supra, was a case pertaining to Delhi Act. The above paras would clearly indicate that none of the judgements of Punjab and Haryana High Court has dealt with this distinction, although in the case of Rahul Malhotra, supra, the Court, had noticed the said distinction. However, all the judgements had, merely relying upon.

Atmaram Case, supra, chosen to uphold the power of the Appellate Authority to grant mesne profits as a condition of staying the ejectment order.

As the word Rent suggests it can easily be construed that any Rent Law is a law that is used as a tool to control and regulate the relationship and also adjudicate the disputes arising between the landlord and tenant.

The historical background of the rent legislation in the erstwhile State of Punjab relates back to the time of Second World War, which started in the year 1939, when various taxes were imposed by the British Government to set off the cost of the war under the provisions of Punjab Urban Immoveable Property Tax Act, 1940. The effect of imposition of this new tax on the urban property led to a steep rise in rents of the property in the concerned area which further led to the various landlords getting their rented accommodation vacated for letting it out fresh on a higher rent.

In order to control the said situation, and also to avoid the shortage of accommodation, the British Government enacted The Punjab Rent Restriction Act 1941. The object and purpose of the said Act was to ensure that the rent was not increased unduly by the landlords. The said Act came into force, initially for a period of 5 years, however the same could be extended further by a resolution of the State Assembly. The rate of rent, as in the act, was chosen to be the rent existing on 01.01.1939, or the rate on which the properties were first let out. There was a clear embargo in the said Act, whereby the rent could only be increased if the landlord provided extra amenities, at his own expense, to the tenant. Any amount, in excess of the such rent, if taken by the landlord, could be legally recovered back by the tenant.

The said Act was, although, to remain in force for a period of 5 years, but however, it was extended further and continued to operate till the time it was replaced by The Punjab Urban Rent Restriction Act 1947. The said Act introduced the concept of Controller and Appellate Authority (Judicial Authorities to administer the Act), and was made applicable to the entire province.

In this new enactment, grounds of ejectment were introduced, whereby the landlord could seek the ejectment of the tenant from the demised premises only on such grounds and no other; Concept of fair rent was also introduced. Further Many provisions of CODE OF CIVIL PROCEDURE were made applicable for the purpose of summoning of witnesses and execution of orders. Any violation of these provisions was made punishable under section 19 of the said Act.

After the partition of the Country in 1947, the part of Punjab that remained in India was popularly called as East Punjab in those days, and as a result the 1947 Rent Act was replaced by the East Punjab Rent Restrictions Act 1949. The said act was a complete legislation in itself, whereby it not only defined the concept of landlord and tenant, but also classified the building into three categories – residential, non residential and scheduled building, apart from a separate category of rented land. It further laid down the exhaustive procedure for protection of tenants from unscrupulous landlords, but also laid down detailed and exhaustive grounds under Section 13, whereby the landlord could seek the eviction of his tenant. The grounds specified therein were like arrears of rent, subletting, material alteration so as to affect the value and utility of the premises, nuisance, tenant ceasing to occupy and the personal necessity of the landlord.

The East Punjab Urban Rent Restriction Act, 1949 (the Act) – prior to 1956 – permitted a landlord to evict his tenant from a non-residential building on the ground of bona fide requirement for his own use, however, the said right of the landlord was taken away by the East Punjab Urban Rent Restriction (Amendment) Act, 1956 (Punjab Act 29 of 1956) (the Amendment) which came into force on September 24,1956. The relevant provisions of the Act prior to the amendment were as under:

“Section 13 – Eviction of Tenants.

(3)-

(a) A landlord may apply to Controller for an order directing the tenant to put the landlord in possession:

(ii) in case of a non-residential building or rented land, if

(a) he requires it for his own use:

(b) he is not occupying in the Urban Area concerned for the purpose of his business any other such building or rented land as the case may be; and

(c) has not vacated such a building or rented land without sufficient cause after the commencement of this Act, in the Urban Area concerned.”

The amendment was enforced by the notification dated September 24, 1956. The relevant provisions of the Amendment are as under:

“1. Short title -This Act may be called the East Punjab Urban Rent Restriction (Amendment) Act, 1956.

2. Amendment of section 13 of East Punjab Act III of 1949. – In clause (a) of sub section (3) of section 13 of the East Punjab Urban Rent Restriction Act, 1949, hereinafter referred to as the principal Act –

(i) (a)

(b)

(ii) (a) In sub-clause (iii) the words “a non-residential building or” shall be omitted.

(b) In sub-paragraph (b), the words “building or” and the words “as the case may be” shall be omitted.

(c) In sub-paragraph (c), the words “a building or” shall be omitted.

(iii)

(iv) In sub clause (iv), for the words “any building”, where they first occur, the words (“any residential building”) shall be substituted.

In the second proviso, for the words “a residential, a scheduled or non-residential building or rented land”, the words (“a residential building or rented land”) shall be substituted.

After the enforcement of the amendment the provisions of the Act are as under:

“(3) (a) A landlord may apply to Controller for an order directing the tenant to put the landlord in possessions.

(ii) in case of (X X X) rented land, if.

(a) he requires it for his own use;

(b) he is not occupying in the urban area concerned for the purpose of his business any other such 2(X X X ) rented land 3 (X X X), and

(c) has not vacated such 4 (X X X) rented land without sufficient cause after the commencement of this Act, in the urban area concerned.”

A bare perusal of the above-mentioned Amendment, and unamended provisions, will reveal that prior to the coming into force of the Amendment, a landlord could seek eviction of his tenant from a non-residential building for his own bona fide requirement, but the said amendment had taken away the said right of the landlord.

The constitutional validity of the said amendment was challenged in the case of Harbilas Rai Bansal v. The State of Punjab & Anr. (AIR 1996 SC 857), whereby the Supreme Court while relying upon its earlier constitutional bench Judgement in Gian Devi Anand v. Jeevan Kumar & Ors. 1985(2) SCC 683, had struck down the said amendment as unconstitutional. The relevant portion of the observation made by the Supreme Court is as under :-

“The observations of the Constitution Bench that “bona fide need of the landlord will stand very much on the same footing in regard to either class of premises, residential or commercial” fully support the view, we have taken, that the classification created by the amendment has no reasonable nexus with the object sought to be achieved by the Act. We, therefore, hold that the provisions of the amendment, quoted in earlier part of the judgment, are violative of Article 14 of the Constitution of India and are liable to be struck- down.

We allow the appeal, set aside the impugned judgment of the High Court, declare the above said provisions of the amendment as constitutionally invalid and as a consequence restore the original provisions of the Act which were operating before coming into force of the amendment. The net result is that a landlord – under the Act – can seek eviction of a tenant from a non-residential building on the ground that he requires it for his own use. The parties to bear their own costs. “

Thus, after the said amendment was struck down by the Hon’ble Supreme Court, the landlord under the said Act of 1949, is free to seek ejectment of the tenant from the demised premises for his own occupation from a residential as well as a commercial building.

In case an ejectment is sought by the landlord on the ground of his personal necessity, then although it has been held by various Courts that the rent controller shall proceed on a presumption that the requirement of landlord is bonafide [Sarla Ahuja 1998 (2) RCR (R) 533] and again in 2004 (1)RCR (R) 395, however, this does not mean that the ejectment of the tenant is automatic, and is on mere asking. On the other hand, for seeking the ejectment of a tenant on the said ground, the landlord has to satisfy the conscious of the court, and strictly fall under the parameters of Section 13, as envisaged under the said Act, and prove that his need is more than a mere wish and a desire, and also that he is not guilty of any concealment as envisaged under section 13(3)(a) 1(b) and (c). The said situation came to be analysed before the Hon’ble Punjab and Haryana High court in the full bench judgement of Banke Ram v. Smt. Sarasti Devi (AIR 1977 P&H 158) when it was held as under :-

“To sum up, the reply to the question referred for decision is that it is essential for a landlord to plead the ingredients of Sub-clauses (to) and (c) of paragraph (i) of Section 13 (3) (a) of the Act in his eviction application and that the decision of the Division Bench in Krishan Lal Seth’s case (1961-63 Pun LR 865) (supra), in this regard, does not lay down a good law.”

However, it may also be relevant to point out here that while the Full Bench clearly held that it is essential for the landlord to plead the ingredients of sub clause b and c of section 13 (3) (a), it also held in para 12 of its decision that:

” In the present case, we are concerned only with the question as a principle of law as to whether it is essential to plead in an eviction application the ingredients of Sub-clauses (b) and (c) and not the question that if in a particular case these ingredients are not pleaded, but the parties have led evidence with regard to them, what will be the effect? In any given case, where facts have not been averred in the pleading, a number of questions can arise as to whether proper evidence has been adduced by the landlord regarding those facts which do not find place in the pleadings and secondly whether such evidence will be admissible or not and lastly, whether the tenant was taken by surprise or not and had led evidence with full knowledge of the requisite contentions raised toy the landlord and whether the tenant has in those circumstances been prejudiced or not. The Court would be required to give full consideration to the contentions raised by the respective parties and the facts and circumstances of each case before giving its decision in favour of the landlord or the tenant, tout the decisions of the High Courts or the Supreme Court, in this regard, cannot be of any avail to detract from the validity of the proposition that it is necessary for the landlord to make averments regarding the ingredients of Sub-clauses (b) and (c). However, it may be made clear that when it is held that it is essential to plead the ingredients of Sub-clauses (b) and (c) in the eviction application by the landlord, it should not be understood that under no circumstances, in the absence of pleadings, the evidence regarding the ingredients envisaged in Sub-clauses, (b) and (c) can be looked into. This is not peculiar to the eviction applications. Similar considerations come into operation even in the case of suits which are governed by the specific and detailed provisions of the Code of Civil Procedure regarding pleadings.”

Thus, even where no such pleadings with regard to the rider so contained in section 13 have been made, but evidence to that effect has been led, then depending upon the facts and circumstances of each case, the same may not be treated as fatal, so as to lead to dismissal of the ejectment petition of the landlord.

The said view was further confirmed by the hon’ble Punjab and Haryana High court in 2013 (2) RCR (R) 230, whereby it has been held :-

“11. As far as the judgment that has been relied upon by the learned Counsel for the petitioners(tenants) is concerned regarding non mentioning of shops under ownership of landlord in his ejectment application, thereby making himself liable for concealment, the said judgment is not applicable to the facts and circumstances of the case in hand and is also distinguishable on the law point itself. It has been held by a Co-ordinate Bench of this Court in Banwari Lal v. Ram Parkash & Anr. 2009 (2) RCR (Rent) 160 that a landlord can always prove the ingredients of Section 13(3) of the Act in evidence and if it is shown that no prejudice is caused to the tenant on account of non pleading of Section 13(3) of the Act, then petition cannot be rejected. Thus, the strict proposition of pleading of the ingredients in an ejectment petition has been diluted to a larger extent and the landlord is at liberty to prove the ingredients of Section 13(3) of the Act in its evidence itself, if it is shown that no prejudice is caused to the tenant.”

That though Rent controller and Appellate Authority, as constituted under the said Act, have powers to adjudicate the disputes between landlords and tenants, but they are not be treated as civil courts, as under CPC. They are merely to be treated as persona designata, under the Act, who are free to design their own procedure, and strict principles of Code of Civil Procedure are not applicable to them. It has been held so in Raghu Nath v. Romesh Duggal, (P&H) (D.B.) 1980 AIR (PB) 188 and Sawan Ram v. Gobinda Ram and anr. 1980 AIR Punjab 106 (FB).

While under the Act of 1949, no second appeal is provided, however under section 15 (5), the High Court may call for and examine the records relating to the proceeding under the said act. As a matter of fact, this power of the High Court is a Power of Revision. However, it has been held time and again by various Courts that the scope of interference under section 15 (5) is very limited and the said power cannot be exercised lightly to interfere. In Manmohan Sharma v. Smt. Swaran Kaur 2003 (1) PLR 300, it was laid down:

“21. Undoubtedly, findings of fact can be examined by the High Court under Section 15(5) of the Act in appropriate cases, but it must be remembered that the revisional court is not “a second court of first appeal”. As noticed earlier, both the courts below have given concurrent findings of fact in accepting the bonafide need of the respondents to settle in India in the only house owned by them in Chandigarh. Mr. Sharma had laid considerable stress on the fact that need of the respondents could not be held to be bonafide as two petitions seeking similar relief had been dismissed earlier. The Appellate Authority has observed that the present rent petition was filed in the year 1999. It has also been observed that a lot of change can be seen with the passage of time between institution and disposal of the eviction petition on 21.11.1976 and 10.3.1982 and the dismissal of the appeal by the Appellate Authority on 9.3.1983. The health which respondent No. 1 was having in the year 1976 or 1982, she cannot be said to be enjoying in the year 1999. It has been observed that she has become pretty old, being 75 years of age and other respondent No. 2, landlord has undergone bye-pass surgery. Thereafter, the Appellate Authority relied on the observations of the Supreme Court in the case of Ramji Dass and another v. Ram Babu and another, 2000(1) R.L.R. 329. In the aforesaid case, the Supreme Court has observed as follows: –

“6. The High Court after examining the facts on this question found that the findings of the Courts below of reletting the accommodation after getting it vacated for the personal need in the year 1980 cannot defeat the bonafide need of the landlord for the year 1987.

7. High Court rightly considered the fresh need which was after the passage of seven long years between the last order and the present application made by the landlord by this passage of time the need has changed, his minor son has become major for whose need there was specific pleading and evidence was also led.”

That with the passage of time the East Punjab Rent Restriction Act 1949, which was enacted at that point of time, in order to protect the interest of tenants who had migrated from Pakistan, has also been replaced by the Punjab Rent Act of 1995, which has come into force w.e.f. 30.11.2013 and as per section 75 of the 1995 Act, the East Punjab Urban Rent Restriction Act, 1949 (East Punjab Act No. III of 1949), stands repealed:

Provided that such repeal shall not affect,-

(a) the previous operation of the Act so repealed or anything duly done or suffered thereunder;

(b) any right, privilege, obligation or liability acquired, accrued or incurred under the Act so repealed;

(c) any penalty, forfeiture or punishment incurred in respect of any offence committed under the Act so repealed; and

(d) any investigation legal proceeding or remedy in respect of any such right, privilege, obligation, liability penalty, forfeiture,

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the repealing Act had not been passed.

(2) Notwithstanding the repeal of the East Punjab Urban Rent Restriction Act, 1949 (East Punjab Act No. III of 1949), under sub-section (1), all cases and other proceedings in respect of the premises, other than owned by a non-resident Indian, let out prior to the commencement of this Act shall be governed and disposed of in accordance with the provisions of the Act so repealed.

Though with the coming of the new 1995 act the old act of 1949 stands explicitly repealed, yet the same is fully enforceable for all the exceptions carved out under section 75 of The Punjab Rent Act 1995.

Almost all the rent Acts applicable in India provides more than one ground of ejectment. Thus where the landlord in the ejectment application has taken more than one ground of ejectment and if one of the ground has been found to be false then whether the ejectment application deserves dismissal, if other ground/grounds are proved to be genuine. Answer is No? Each case is to be decided on its own facts. The said point is covered under the maxim “falsus in uno, falsus in omnibus” meaning thereby false in one thing, false in everything.

The said maxim has no application in India and the witnesses cannot be branded as liars. The said maxim has neither received any acceptance nor has this maxim has become the rule of law. It only amounts to discarding of some part of the disposition and not that it must be discarded, as a whole.

CAN THE COURT SIFT THE DEPOSITION OF ANY WITNESS BY ACCEPTING A PART THEREOF, WHILE REJECTING THE OTHER PART:-

It has been held by the Hon’ble Supreme Court in the judgment reported as Ram Udagar Singh v. State of Bihar, (2004)10 Supreme Court Cases, 443, held as under:-

“In essence, prayer is to apply the principle of “falsus in uno, falsus in omnibus” (false in one thing, false in everything). This plea is clearly untenable. Even if a major portion of evidence is found to be deficient, in case the residue is sufficient to prove the guilt of an accused, notwithstanding acquittal of a number of other co-accused persons, his conviction can be maintained. It is the duty of the Court to separate the grain from the chaff. Where the chaff can be separated from the grain, it would be open to the court to convict an accused notwithstanding the fact that the evidence has been found to be deficient to prove the guilt of other accused persons. Falsity of particular material witness or material particular would not ruin it from the beginning to end. The maxim “falsus in uno, falsus in omnibus” has no application in India and the witnesses cannot be branded as liars. The maxim “falsus in uno, falsus in omnibus” has not received general acceptance nor has this maxim come to occupy the status of rule of law. It is merely a rule of caution. All that it amounts to is that in such cases testimony may be disregarded, and not that it must be discarded. The doctrine merely involves the question of weight of evidence which a court may apply in a given set of circumstances, but it is not what may be called “a mandatory rule of evidence.” The above said judgment was followed in another judgment of the Hon’ble Supreme Court in case titled as “Jaya Seelan v. State of Tamilnadu” Criminal Appeal No.456 of 2002 decided on 11.2.2009.

It is open to any court to sift the deposition of any witness and accept apart thereof, while rejecting the other part. Thus evidence of the witness cannot be disbelieved completely. It has been held in AIR 1998 (SC) 1978 in the case titled as “SGPC v. M.P. Dass Chella through Lrs. Here in this case it has been held that the appellant relies on the evidence that the Guru Granth Sahib is worshipped. That circumstance alone is not helpful to the appellant. It is contended by the appellant that the oral evidence of the witness examined by the respondent were disbelieved on some points by Yadav, J. and they ought to have been disbelieved completely. There is no substance in the contention. It is open to any court to sift the deposition of any witness and accept a part thereof while rejecting the other part.

The doctrine merely involves the weight of evidence which a court may apply in a given set of circumstances, but it is not what may be called ‘a mandatory rule of evidence (Nisar Ali v. State of Uttar Pardesh AIR 1957 SC 366). In a given case, it is always open to a case to differentiate accused, who has been acquitted from those, who were convicted, where there are a number of accused persons. (Gurcharan Singh v. State of Punjab AIR 1956 SC 460). The doctrine is a dangerous one specially in India for if a whole body of the testimony were to be rejected, because witness was evidently speaking an untruth in some aspect, it is to be feared that administration of criminal justice would come to a dead-stop. Witnesses just cannot help in giving embroidery to a story, however, truth in the main. Therefore, it has to be appraised in each case as to what extent the evidence is worthy of acceptance, and merely because in some respect the court considers the same to be insufficient for placing reliance on the testimony of witness, it does not necessarily follow as a matter of law that it must be disregarded in all respect as well. The evidence has to be sifted with care. The aforesaid dictum is not a sound rule for the reason that one hardly comes across a witness, whose evidence does not contain a grain of untruth or any rate exaggeration, embroideries or embellishment.

Thus an attempt has to be made in terms of felicitous metaphor, separate grain from chaff, truth from falsehood. Where it is not feasible to separate truth from falsehood, because grain and chaff are inextricably mixed up and in the process of separation and absolutely a new case has to be reconstructed by divorcing essential details presented by the prosecution completely from the context and the background against which they are made, the only available course to be made it to discard in toto.

The normal discrepancies in the evidence are those which are due to normal errors of observations, normal errors of memory due to lapse of time, due to mental disposition such as shock and horror at the time of occurrence and those are always there however honest and truthful a witness may be. Material discrepancy may be categorized. While normal discrepancies do not corrode the credibility of a party’s case, material discrepancies do so. The said aspects were highlighted in Krishan Mochi v. State of Bihar etc. (2002 (6) SCC 81) and in “Sucha Singh v. State of Punjab (2003 (7) SCC 643) and were further illuminated in Zahira H Sheikh v. State of Gujrat (2004 (4) SCC 158), and the above said judgment Ram Udgar Singh v. State of Bihar (Supra) Gorle S Naidu v. State of Andhra Pardesh (2003 (12) SCC 449), Gubbala Venygopalswamy v. State of Andhra Pardesh(2004 (10) SCC 120) and in Syed Ibrahim v. State of A.P. (2006 (10) SCC 601).

Where the witness of the landlord or the landlord has been disbelieved on the question of rate of rent would not be a ground to disbelieve the evidence of the witness and the landlord in its entirety. Thus where the landlord has been able to prove his bonafide requirement he should be granted the relief. Case titled as Prithi Chand v. Shanti Sarup, reported in 1996(1) PLR 285, which says that simply because the landlord was not believed on the ground of rate of rent or the ground of subletting, would not debar him from claiming the premises, when he required the same for his own use and occupation. As has been held in Kewal Krishan v. Smt.Bhagwati 1992(1) RCR 566, 2005 (2)RCR Rent 672 case titled as “Joginder Singh v. Varinder Kumar”

The said fact has also been held in another judgment in the case titled as M/s Sood Bros. v. Gurjeet Singh, 2006(2), RCR, page 678, which says that if the landlord is disbelieved regarding the rate of rent, it is no ground to disbelieve him on the ground of bona fide requirement.

The said Maxim/principle has also been equally applied in civil cases as well in the cases under the Representation of People Act, Kindly refer to the judgment titled as “Vatal Nagaraj v. Dayanand Sagar”, AIR, 1975 SC 349.

Where the oral evidence of the witnesses examined by the respondent were disbelieved on some points and thus they ought to have been disbelieved on the other grounds also. There has been no substance to have been found in the said plea. It is open to sift the deposition of any witnesses and accept a part thereof while rejecting the other part. Thus the evidence which has come on the record has to be scrutinized, even if some part of the evidence is sufficient to prove a particular ground, the same should be taken note of.

Similarly it has been held in the case titled as Iqbal Singh v. Mangat Ram reported in 1997(2), Rent Control reporter, page 189, in which it has been held that a false plea regarding arrears of rent has been taken by the landlord. Landlord claiming rent @ 50/- per month. Tenant proved that the rate of rent was Rs.10/- per month only. Contention of the tenant that no order of eviction could be passed against the tenant as land lord has taken a false plea regarding the rate of rent. Contention not tenable.

Where on the facts and circumstances of the case the claim settled by the landlord has been found to be false with regard to commencement of tendency, rate of rent and date from which the rent was payable, then the eviction petition is liable to be dismissed, because in that case the pleading of the landlord has been found to be false. The conduct of the petitioner/landlord also to be taken into consideration as he is telling one lie after the another and has been suppressing the truth from the court. The landlord/petitioner cannot be permitted to deprive the tenant of statutory protection by making vague, frivolous and false allegations. Thus the right to recover rent from the tenant is different from the right to save eviction under the provisions of the Act. Kindly refer to judgment titled as Harnam Singh v. Mohinder Singh, 1997 (2), Rent Control Reporter, page 200, in which it has been held that where the landlord was not entitled to eviction on the false pleadings as mentioned above. Also refer to judgments titled as ‘Mehar Chand v. Tilak Raj, 1982(84) PLR, 13; Mangat Rai v. D.D. Mehta, 1987(2)(92), PLR, 80; Faqir Chand v. Bhagwan Dass, 1994(3)(108), PLR, 129.

Can the landlord succeed in ejectment petition if he has taken false plea regarding his accommodation:- where the landlord has taken the false plea regarding his accommodation and sought eviction on the ground that he was living in one room only with his family comprising of his wife and three going sons and also pleaded that he has three sisters also who, though living separately, but used to visits and stay with him during their visits to his house and accommodation is quite in sufficient. On the contrary tenant proved that landlord was having in his possession five rooms on the ground floor and two on the first floor and so the accommodation already available with the landlord was sufficient for his family. In this case the tenant has proved that at the time of filing the eviction petition the landlord was having with him six rooms, including five rooms, which the landlord petitioner was claiming to have been constructed and the only conclusion has to be that the eviction proceedings were initiated on false plea of availability of one room only with the landlord and that fact itself was sufficient to disentitle him from getting any relief from the court and the courts have further held that revisional jurisdiction under the Rent Act invoked by the petitioner landlord is quite limited. The High Court is expected to interfere with the order of the rent controller only if it feels satisfied that the rent controller order under challenge was not in accordance with the law and its reasoning in the order passed by him was perverse. But in the present case the case of the petitioner landlord was based on false plea of his accommodation, which fact has been proved by the tenant, thus on the basis of the false pleading the ejectment of landlord rightly dismissed.

Can the rent controller proceed to determine the amount of rent, interest and costs in the absence of demand:-

If the landlord sought the eviction of the tenant/sub tenant and does not arrears of rent in the eviction petition from the tenant/sub tenant, who is claiming to be direct tenant, no ejectment order can be passed against such tenant on the ground of non-payment or tender of arrears of rent. In the absence of demand, Rent Controller did not proceed to determine the amount of interest and costs. The tenant was not bound to tender the amount of rent. Order of ejectment on the ground of short tender against the petitioner held not sustainable. “Ram Charan v. Bataku Ram through Lrs”. 1998 (2) RCR 656 1997 (3) PLR 857 (FB) followed in. Thus in view of the same the tenant is under no obligation to pay the rent and that too in the absence of demand, the rent controller did not proceed to determine the amount of interest and costs and the tenant is not bound to tender the rent. Further the order of ejectment on the ground of short tender against the petitioner is not sustainable.

Thus the landlord can take as many as grounds available to him to seek the eviction of the tenant from the demised property, even if one ground is not proved and is found to be false he can fall upon the other grounds if he has been able to prove the same except the peculiar set of cases mentioned above. He can seek the eviction of the tenant. Each ground is to be proved separately and independently, meaning thereby if the landlord has not been able to prove the grounds taken by him in the ejectment petition i.e. ground regarding sub-letting, rate of rent, change of user etc. it does not mean that the other grounds if proved by him independently are also false and that the eviction petition is to be dismissed in its entirety.