A

B

DR. K. MADAN

v.

KRISHNA WAT! (SMT.) AND ANOTHER

NOVEMBER 6, 1996

[A.M. AHMADI, CJ, SUJATA V. MANOHAR

AND B.N. K!RPAL, JJ.]

Rent Control and Eviction' Delhi Rent Control Act 1958.· S.14(l)(k)

and S.14(11)-Premises on lease by Government/Development Authority/

Municipal

Corporation-User of residential premises by tenant for

C commercial purpose, contrary to terms of lease-Held, where authorities

require stoppage

of mis-user, continued misuser cannot be permitted on

payment

of compensation under

Section 14(11) and controller would be

justified

in passing eviction order-On facts, tenant directed to stop the

misuse and to pay damages till stoppage

of misuser.

D

The residential premises in question had been allotted to G by

the Government and after the death of G, his wife, the Respondent

became the owner

of the said premises. G had given the premises on

rent to the appellant, a doctor, wbo was using the premises for

purposes

of both residence and clinic but had subsequently shifted

E her residence to another place where she had constructed her own

house but continued to retain a portion of the ground floor premises

for purposes of her

clinic. The submission of the Respondent was that

the premises

in question was residential and as the appellant had

shifted

to her new accommodation, the continued user of the premises

by the appellant only as a

clinic was against the terms of the lease

F given by the Government. The Addi. Rent Controller held that the

. ground u/s.

14(1 )(k) was made out and issued notice u/s. 14(11) of the

Act to the Land and Development Office.

On the basis uf the evidence

led

by the parties and written statement filed by the Deputy Land

and Development Officer, the

Addi. Rent Controller came to the

conclusion

that the appellant had been misusing the premises by

running her clinic and the misuser/breach

of the conditions of the

lease could not

be condoned permanently by the Office of Land and

Development Officer (LDO). The appellant was directed to stop the

mis-user within two months from the date

of the order to avoid

eviction. Also damages for mis-user was levied

by the

LDO and the

H appellant was directed to pay the same within two months from the

516

K. MADAN v. KRISHNA WA TI 517

date of the order including damages for mis-user of the period A

subsequent to 1.4.1989 till its stoppage. The Rent Control Tribunal

and the Hon'ble High Court affirmed the finding

of the

Addi. Rent

Controller.

Disposing of the appeal, this Court

B

HELD : 1.1. The finding of the Trib'unal after taking into

consideration the evidence on record, and

in particular, the written

statement of the Land and Development Officer as

well as the

statement of the witnesses before the Additional Rent Controller, was

that the appellant was using the premises in a manner contrary to

the terms of the lease between the landlady and the Land and C

Development Office. [523 BJ

1.2. Where the premises are used in a manner contrary to any

condition imposed on the

landlord by the Government or Delhi

Development Authority

or Municipal Corporation of Delhi, then the D

landlord would be entitled to recovery of possession under Section

14(1 )(k) of the Act. [ 525 FG]

1.3. The alternative to an order of recovery of possession under

Section

14(1) (k) is to pass an order under Sub-Section (11) of Section

14

of the Act whereby the tenant is directed to comply with the E

conditions imposed on the landlord by the authorities referred to in

clause (k) of the proviso to Section 14(1), namely to stop the misuser

of the premises in question. [525-H]

1.4. Sub-section (11) of Section 14 gives option to the Controller

to pass an order whereby recovery of possession may not be directed F

but directing in.stead the payment of an amount by way of

compensation. Thus Sub-section (11) of Section 14 enables the

Controller to

give another opportunity to the tenant to avoid an order

of eviction. Where the authority concerned requires stoppage of

mis­

user then an order to that effect has to be passed, but where the G

authority merely demands compensation for mis-user and does not

require the stoppage of mis-user then only

in such a case would the

Controller be justified in passing an order for payment of

compensation alone. [525-G, 526-D-E]

1.5. Continued wrongful user cannot

be permitted by levying H

518

SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.

A penalty but if the authorities do not require the stoppage of

misuser but merely ask for payment or compensation, then in such a

case, an order

of eviction or for stoppage of premises need not be

passed and it will be sufficient if compensation is required to he paid.

[526-F-GJ

B Faqir Chand v. Shri Ram Rattan Bhanot, [1973) I

SCC 572 and

Curewell (India) Ltd. v. Sahib Singh, [1993) Supp I SCC 507, relied on.

1.6. Observations to the effect that as long as the penalty is

continued to be paid, deviation to user could be permitted made in

Punjab National Bank's case is not in consonance with the decision

C of carger Bench in Faqir Chand's case. [526-FJ

Punjab National Bank v. A/jun Dev Arora, [1986) 4 SCC 660 and

Faqir Chand v. Shri Ram Rattan Bhanot, [1973] I SCC 572, referred to.

2.1. In the instant case the payment of misuse charges would

D only amount to temporary regularisation of the earlier mis-user. The

Land and Development Officer clearly insisted on the stoppage of

mis-user. This being so, the question of the Controller requiring

payment

of

pen~lty or compensation and permitting continued mis­

user would not

be in accordance with law. [527-B]

E

F

2.2. The appellant is allowed two months' time to comply with

the order dated 19.4.1994

of the

Addi. Rent Controller. [527-C]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14195 of

1996.

From the Judgment and Order dated 28.8.95 of the Delhi High

Court in S.A.O. No. 8 of 1995.

R.K. Jain. (Manoj Goel) for A.R. Sharma, Adv. with him for the

G Appellant.

Ms. Indra Sawhney and V.K. Verma for the Union of India.

Arun Jaitley, Rajeev Sharma and T.C. Sharma for the Respondents.

H The Judgment of the Court was delivered by :

K.1v'ADAN v. KRISHNA WAT! [KJRPAL, J.] 519

KIRPAL, J. Leave granted.

This

is an appeal by the appellant-tenant in which the challenge is to

an order which had been passed under Section 14(1) (k) of the Delhi Rent

Control Act, 1958 (hereinafter referred to

as 'the Act').

A

The appellant is a lady Doctor and in the year 1963, she took the B

ground floor of House No. l-Il/91, Lajpat Nagar, New Delhi from one

Gyan Chand Shingari at a monthly rent or Rs.

175 p.m. According to the

appellant, this rent was first raised to

Rs. 265 p.m. in the year 1968 and

then to

Rs.

300 p.m. in the year 1970.

In August, 1974 the aforesaid Gyan Chand Shingari died and his C

widow, the respondent herein, became the owner of the property and the

appellant attorned to her. According

to the appellant, the premises were

taken on rent

by her for residential-cum-commercial purposes. She was

residing

in the said premises and was also running a clinic. According to

the respondent, however, the premises were given on rent only for residence.

D

In the year 1974, the appellant constructed her own residential house

in East ofkailash, New Delhi and, soon thereafter she shifted her residence

to the new house but continued to retain the 'premises in dispute where

she

maintained her clinic. It appears that possession of some of the portion of

the ground floor, which had been in the occupation of the appellant, was E

taken back by the respondent but the appellant continued to be the tenant

of two rooms with a common use of latrine and front varandah on the

ground floor

of the aforesaid house.

On 17 .5 .1978 the respondent filed an eviction petition against the

appellant before the Rent Controller being Suit No. 134

of 1978 under F

Section 14(l)(k) and (h) of the Act. By judgment dated 13.9.1985, the

Additional Rent controller, Delhi came to the conclusion that the eviction

of ground floor under Section 14(1)(c) of the Act had not been made out.

Eviction orders were, however, passed on the ground under Section 14(

I )(h)

namely that the appellant had acquired vacant possession

of a residence G

inasmuch as she had constructed her own house in East of Kailash. The

Additional Rent Controller further held that the ground under Section

14(1 )(k) of the Act had been made out inasmuch as the appellant was

using the premises as a clinic which was contrary to the terms and conditions

imposed

by the Land and Development

Office on the respondent land­

lady, The case

of the respondent was that the premises in question were H

520

SUPREME COURT REPORTS [ 1996] SUPP. 8 S.C.R.

A residential and according to the terms of the lease given by the government

the said premises could not be used for any other purposes. A Doctor was

allowed to

use the premises upto

500 square feet as his clinic provided the

Doctor resided

in the said premises.

Inasmuch as the appellant had shifted

from the Lajpat Nagar House to her own house

in East ofKailash, therefore,

the submission was that her continued user

of the premises in question

B only as a clinic was against the terms of the lease. The Additional Rent

Controller vide his judgment dated 13.9.1985, while disposing

of the

petition

on the above two grounds under Sections 14(l)(h) and 14(1)(k)

of the Act, issued notice under Section 14( 11) of the Act to the Land and

Development Office.

c

D

E

F

G

H

At this stage, it is appropriate to refer to the relevant portion of the

Act namely; Sections 14(1)(k) and 14(11)

of the Act which read as under:

(I)

"Clause (k) of the proviso to sub-section (I) provides that

the Controller may, on an application made to him in the

prescribed manner, make an order for the recovery

of

possession of the premises on the ground that the tenant has,

notwithstanding previous notice, used

or dealt with the

premises

in a manner contrary to any condition imposed on

the landlord by the Government or the Delhi Development

Authority or the Municipal Corporation

of Delhi giving him

a lease

of the land on which the premises are constructed.

The requirements

of clause (k) may be analysed as follows :

The user

of the premises by the tenant should be contrary to

a condition imposed on the landlord by the Government,

etc.

(2) Such user must continue even after a notice to discontinue

the same

is given by the landlord.

(3) The condition which

is contravened by the user of the tenant

should be one which

is imposed on the landlord by the

Government

"while giving him a lease of the land on which

premises are situate".

14( 11 )This subsection provides that no order for the recovery

of possession of any premises shall be made on the ground

K. MADAN v. KRISHNA WA TI [KJRPAL, J.] 521

specified

in clause (k) of Section 14(1), ifthe tenant, within A

such time as may be specified in this behalf by the Controller,

complies with the condition imposed on the landlord by any

of the authorities referred to in that clause or pays to that

authority such amount by

way of compensation as the

Controller may

direct."

B

Pursuant to the issuance of the aforesaid notice by the Additional

Rent Controller under Section 14(

11) of the Act, the Deputy Land and

Development Officer filed a written statement before the Additional Rent

Controller, Delhi. After stating that the property was originally leased to

Gayan Chand and, after his death, the name

of the respondent had been

substituted, with regard to

dleged mis-use and regularisation, it was stated C

as follows:

"That the question of re~ularisation/condoning the breaches

permanently does not arise. However, the lessor may consider,

if proper application is made by the lessee with an undertaking D

to remove the breaches, within the specified period, and with

readiness to pay the misuse/additional charges leviable for

such misuser, that may

oe fixed for the period of the breach

to postpone the right

of re-entry till such time the breaches

are finally removed.

That the misuse

in the nature of running a doctor clinic cannot

be allowed, but the area extending to

500 sq. feet is permitted

in case the doctor is residing in the premises. Terms for the

temperary regularisation

of mis-use charges upto 14.1.1981

were communicated

to the lessee vide this office letter No.

E

L. and

Do/PS. 11/1830 dt. 3.12.1980 but the terms have not F

so far been complied with. In the present case benefit of 500

sq. feet was not given because lady doctor Madan who is a

tenant

ofthe lessee, was not residing in the premises as noticed

during inspections from time to

time."

After filing the aforesaid written statement, the statement of mis-use

charges was also filed before the Additional Rent Controller, Delhi.

The parties then led evidence and,

by judgment dated 19.4.1994, the

Additional Rent Controller, Delhi came to the conclusion that the appellant

G

had been misusing the premises by running her clinic and the

mis-user/ H

522

SUPREMECOURTREPORTS [1996] SUPP. 8 S.C.R.

A breach of the conditions of the lease could not be condoned permanently

by the office of Land and Development Office and as such, by the impugned

order, she was directed

to stop the mis-user within two months frcim the

date

of the order in order to avoid eviction against her. The Additional

Rent Controller, Delhi also estimated the damages for mis-user which

were levied

by the Land and Development

Office and the appellant was

B directed to pay the same within two months from the date of the order

including damages for mis-user

for the period subsequent to 1.4.1989 till

its stoppage.

The appellant, thereupon filed an appeal before the Rent Control

Tribunal,

inter a/ia contending that there had been no mis-user of the

C premises on her part inasmuch as since the inception of the tenancy, she had

been using the same as her residence as well as clinic. This contention was

not accepted and it was held by the Tribunal that there was misuse

of suit

premises.

It had also been conten~ed on behalf of the appellant before the

Tribunal that the property

in question had become free-hold and, therefore,

the appellant was not liable to pay mis-use charges. Relying upon the

D evidence of an officer of the Land and Development Office, the Tribunal

came to the conclusion that the property

in question had not become freehold.

While dismissing the appeal, the appellant was granted two months time

by

the Tribunal to comply with the directions

contained in the order dated

19.4.1994 passed

by the Additional Rent Controller, Delhi.

E

The appellant then filed an appeal to the High Court of Delhi raising

the contentions that order under Section 14(

I )(k} of the Act should not

have

been passed and secondly, the Government had permitted the

conversion

of the property from lease-hold to free-hold. By order dated

28.10.1995, the High Court held that with regard to the plea pertaining to

F applicability of

Section 14( I )(k) of the Act, the finding of the Additional

Rent Controller, Delhi and

of the Tribunal was a question of fact and no

question

of law arose. With regard to the policy of the Government

permitting conversion

of the property, it was held that the property in

dispute was admittedly a leasehold property and the owner/landlord was

G not bound to seek conversion under the alleged policy. Hence, this appeal.

In this appeal the only contention raised was that an order under

Section 14(1)(k} read with Section 14(11)

of the Act ought not to

have"

been passed. It was further submitted while relying upon the decision in

the case

of

Punjab National Bank v. Arjun Dev Arora and others, [1986]

H 4 SCC 660 that no order could be passed requiring the closure of the clinic

K. MADAN v. KRISHNA WA TI [KIRPAL, J.] 523

as long as penalty for wrongful user

in continued to be paid by the tenant. A

After taking into consideration the evidence on record and, in

particular, the written statement

of the Land and Development

Officer as

well as the statement of the witnesses before the Additional Rent Controller,

the Tribunal has found

as fact that the appellant was using the premises in

question in a manner which was contrary to the terms of lease between the B

landlady and the Land and Development

Office. It cannot be said that this

conclusion was not warranted.

It is contended by Mr. Jain, learned counsel

for the appellant, that as long as the order for payment

of compensation to

the Land and Development

Office remained, the order for eviction or for

closure

of the clinic need not be passed.

It is no doubt true that the observations in

Punjab National case

(supra) are to the effect that as long

as the penalty was paid

"the deviation

of user could be permitted", but the attention of the two Judge Bench was

c

not drawn to the earlier decision of three Judges Bench in the case of

Faqir Chand v. Shri Ram Ratan Bhanot, [1973] I SCC 572. In that case, D

property had been given on lease by the Delhi Development Authority but

the landlords had permitted tenants to use portion

of the building for

commercial purposes. The Development Authority issued notice to the

landlords calling upon them to discontinue the use

of land for commercial .

purposes,

failillj: which cause should be shown as to why the lease should

not be determined and the property re-entered. Thereupon the land-lords

E

sought eviction of the tenants under

Section 14(1 )(k) of the Act. One of

the contentions which were raised on behalf of the tenants was that the

land-lords were estopped or otherwise prohibited from getting possession

of the property because the land-lords themselves had let-out the property

for commercial purposes. While analysing the provisions

of clause (k)

and subsection

(11) of Section 14 of the Act, it was observed in Fakir F

Chand case (supra) at page 557 as. under :

"The legislarure has clearly taken note of the fact that

enormous extents of land have been leased by the three

authorities mentioned

in that clause, and has expressed by G

means of this clause its anxiety to see that these lands are

used for the purpose for which they were leased. The policy

of the Legislature seems to be to put an end to unauthorised

use

of the leased lands rather than merely to enable the

authorities to get back possession

of the leased lands. This

conclusion

is further fortified by a reference to sub-section H

A

B

c

D

E

F

524

SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.

(11) of Section 14. The lease is not forfeited merely because

the building put upon the leased land

is put to an unauthorised

use. The tenant

is given an opportunity to comply with the

conditions imposed on the landlord by any

of the authorities

referred to in clause (k)

of the proviso to sub-section (I). As

long as the condition imposed is complied with there is

no

forfeiture. It even enables the

Controller to direct

compensation to be paid to the authority except in the presence

of the authority. The authority may not be prepared to accept

compensation but might insist upon cessation of the

unauthorized use. The sub-section does not also say who is

to pay the compensation, whether it is the landlord or the

tenant. Apparently

in awarding compensation the

Controller

will have to apportion the responsibility for the breach

between the lessor and the tenant."

Dealing with the contention that the landlords were estopped from

filing or getting any relief under clause (k), it was held that :

"The anxiety of the Legislature is to prevent unauthorised

user rather than protection

ofthe tenant or strengthening the

hands

of Development Authority in effecting forfeiture. The

Development Authority can always resort to the terms

of the

lease. There is no estoppel here because

botll the landlord

and the tenant knew that the tenancy was not one permitted

under the terms

of the lease of the land. In any case there can

be

no estoppel against the statute. It would not benefit the

tenant even

if it is held that the landlord cannot, under the

circumstances, evict him. The landlord will lose his property

and the tenant also will lose. He cannot, after the Development

Authority takes over the building use it for a commercial

purpose."

Section 14(1) (k) of the Act again came up for consideration before

this Court in Curewell (India) Ltd. v. Sahib Singh, [1993) Supp. I SCC

G 507. While construing sub-section (11) of Section 14 of the Act, it was

observed as follows :

H

"This sub-section prevents eviction ifthe tenant has complied

with the condition imposed on the landlord

by the government.

The sub-section also requires the person in possession, namely,

the sub-lessee to pay to the authority such amount

by way of

K. MADAN v. KRISHNA WAT! [KIRPAL, J.] 525

compensation as the Controller may direct. It is not in dispute A

that the original lessee, upon receipt of notice, from the

government,

had in turn issued notice to the sub lessee, namely,

the appellant calling upon him to stop misuser or vacate the

premises.

If the appellant has, as contended by him, stopped

misuser,

he is of course not liable to be evicted by reason of

the protection given to him under sub-section (11 ). B

Nevertheless, for the past misuser, the appellant is liable to

· pay such charges as are payable in terms of the sub-section.

The charges under the sub-section are such charges as are

determined by the Controller. The Controller must, therefore,

after bearing the parties determine the amount payable by

the person responsible for the misuser, namely, the appellant

C

who is the tenant of the original lessee and determine the

correct amount.

We are of the view that the appellant is liable to be evicted

unless

he has already stopped or stops immediately the misuser

of the premises and pays the misuse charges for the period of D

misuse. Whether the misuser has stopped, and if so when,

are questions

of facts which do not appear to be clear from

the pleadings or the impugned judgment and the orders

of

the statutory authorities."

In the light

of the observations of this Court in the cases of Faqir E

Chand (supra) and Curewell (supra) the relevant provisions may be

examined.

Section I 4(1) of the Act gives protection to the tenants from being

evicted from the premises let out to them. Clauses (a) to (I) of the proviso F

to Section 14 (I) of the Act contain the grounds on which recovery of

possession of the premises can be ordered by the controller. Where the

premises are used

in a manner contrary to any condition imposed on the

landlord by the Government or the Delhi Development Authority

or

Municipal Corporation of Delhi, then the landlord would be entitled to

recovery

of possession under

Section I4(1)(k) of the Act. Sub-section G

( 11) of Section I 4, however gives an option to the Controller to pass an

order whereby recovery

of possession may not be directed. The alternative

to an order

for recovery of possession under

Section I 4( I )(k) is to pass an

order under sub-section (I I)

of

Section I 4 of the Act whereby the tenant

is directed to comply with the conditions imposed on the landlord by the

authorities referred to

in clause (k) namely to stop the misuser of the H

526

SUPREMECOURTREPORTS [1996) SUPP. 8 S.C.R.

A premises in question. Sub-section (I I) of Section 14 also uses the words

"pays to that authority such amount byway of compensation as the Controller

may direct". Keeping in view the fact that clause (k) of the proviso to

subsection (I) has been inserted in order that the unauthorised use of the

leased premises should come to an end, and also bearing

in mind that the

continued unauthorised

use would give the principal lessor the right of re-

B entry after cancellation of the deed, the aforesaid words occurring in sub­

section

(I

I) of Section 14 cannot be regarded as giving an option to the

Controller to direct payment

of compensation and to pennit

the tenant to

continue to

use the premises in an unauthorised manner. The principal

lessor may,

in a given case, be satisfied, in cases of breach of lease to get

compensation only and may waive its right

of re-entry or cancellation of

C lease. In such a case the Controller may, instead of ordering eviction under

Section

14(1 )(k) of the Act, direct payment of compensation as demanded

by the authorities mentioned

in clause (k). Where, however, as in the

present case compensation

is demanded in respect of condoning/removal

the earlier breach, but the authority insists that the mis-user must cease

then the Controller has no authority

to pass an order under Section 14( 11)

D or Section 14 (l)(k) of the Act giving a license or liberty of continued

misuser.

Jn other words, sub-section (11) of Section 14 enables the

Controller to give an another opportunity to the tenant to avoid an order

of eviction. Where the authority concerned requires stoppage or misuser

then an order to

th.at effect has to be passed, but where the authority

merely demands compensation for misuser and does not require the stoppage

E of misuser then only in such a case would the Controller be justified in

passing an order for payment of compensation alone.

The observations

of this Court in

Punjab National Bank's case (supra)

to the effect that as long as the penalty continued to be paid, deviation to

user could be permitted, do not appear to be

in consonance with the decision

F of the larger Bench in Fakir Chand's case (supra). Continued wrongful

user cannot be permitted

by levying penalty but if the authorities do not

require the stoppage

of misuser, but merely ask for payment of penalty or

compensation, then in such a case, an order

of eviction or for stoppage of

premises need not be passed and it will be sufficient if compensation is

G required to be paid.

Coming to the facts

of the present case, the Additional Rent Controller

in order dated 13.9.1985, while issuing notice under Section 14(11) has

observed that the landlord has placed

on record a notice sent by the Land

and Development Office regarding misuser.

In the written statement filed

H on behalf of the Land and Development Office in response to the notice

K. MADANv. KRJSHNAWATI[KIRPAL,J.] 527

issued under Section 14(

11 ), it was stated that the question of regularisation/ A

condoning the breach permanently did not arise. The said reply

contemplates an undertaking being given by the Landlord for removal of

breach otherwise there is a threat of re-entry. The payment of misuse

charges would only amount to temporary regularisation

of the earlier misuser

and the Land and Development

Office clearly insisted on the stoppage of

the misuser. This being so, the question of the Controller requiring payment B

of penalty or compensation and permitting continued misuser would not

be

in accordance with law.

For the aforesaid reasons, while upholding the orders

of the court

below,

we grant the appellant two months time to comply with the order

dated 19.4.1994

of the Additional Rent Controller, Delhi. There will be C

no order as to costs.

R.D. Appeal disposed of.